Philip Booth: The Conservatives must give their proposed Swedish-style "free schools" a lot more freedom

Professor Philip Booth is Editorial and Programme Director at the Institute of Economic Affairs.

The Conservatives’ plans for “free schools” are, arguably, their flagship policy. It is vital that there is no compromise when they are implemented. Schools are a good place to start a free-market agenda. Education reform is politically quite easy – unlike NHS reform – and left wing governments in the rest of the EU accept the premise that the “parent should be sovereign”. In Sweden, left wingers even accept profit-making schools.

Competition will raise standards and the efficiency with which resources are used across the sector, but the potential benefits of education reform to the less well off are perhaps the most important gain. We know from the US – where the data are especially good and well researched – that voucher systems benefit the poor and those with special needs more than any other groups.

Our current system, on the other hand, particularly benefits the middle classes who can use their resourcefulness to get the best out of the system: if Freddie’s school is not doing well then Freddie can be helped at home, the parents can articulate their needs to the school or, in the extreme, Freddie can move house and change school. But, if the parents are not articulate, Freddie sinks.

In a competitive school system, two things change. Firstly, even if Freddie’s parents were completely unable to distinguish good schools from the rest, choosing a school at random will lead to a far better outcome than the current dismal state-school offerings in many areas of the country. Secondly, most parents do, in fact, recognise a good school if they see one. They are able to choose schools effectively. Choosing a good school is a far easier way for a family to improve their child’s education than exercising “voice” or moving house as is necessary in the current model.

Professor Philip Booth is Editorial and Programme Director at the Institute of Economic Affairs.

Professor Philip Booth is Editorial and Programme Director at the Institute of Economic Affairs.

There must be no restraint on the development of free schools. Contrary to their current position, a future Conservative government must allow profit-making schools to receive government funding in the free-schools model; if profit-making schools are not allowed there will be a shortage of capital to start new schools. My view is that the decision to exclude profit-making schools will simply have to be reversed. If it is not, we will simply find that schools develop complex capital structures so that “profits” are classed as “interest on borrowing” – a situation resonant of practice in the private equity industry.

The Conservatives are in danger of making two other mistakes. If free schools are to succeed, they need to be free of government central planning and they need to be free to have their own admissions policies so that they can develop their own characters and niches. At the moment, Conservative policy on admissions policies is opaque. It is clear, though, that schools will not be allowed to specialise by academic aptitude. This, in turn, prevents teachers from specialising according to their ability to teach children with different levels of academic potential, something which is a great loss in the current comprehensive system.

Whether the Conservatives will allow free-schools to have faith-based admissions policies has not been clarified. Freedom for schools to determine their admissions policy is important. The more schools can specialise the more children will be valued for their individual talents and character rather than being treated as identical small cogs in a large homogeneous system. If there is concern that schools will discriminate against the least academic children, this problem is best solved using the “pupil premium” financing mechanism whereby funding is increased for children who start with particular disadvantages.

This week’s announcement that a Conservative government will pull a few central planning levers in the hope of turning teaching into an elite profession is also worrying. Why does the government think it knows best when it comes to the recruitment of teachers? This proposed measure will reduce the power of headteachers yet further. Huge sums will be paid to teachers (we are talking about tens of thousands of pounds) with particular qualifications – 2:1 degrees or better from particular universities; and those with 2:2’s will be favourably treated from a financial perspective in the teacher training process.

Why not give the whole education budget to the schools (directed through the parents) and let the schools decide which teachers they want to recruit, how they train them and the financial packages they give them. Why should central government assume that somebody with a 2:1 from Hull University in (say) bio-chemistry is more valuable than somebody with a 2:2 from York in economics who had a very bad performance in his second year due to serious illness? As F. A. Hayek would have put it, the knowledge about who to recruit in a given school, about what qualifications they should have, and about how they should be trained cannot be centralised. Schools must take these decisions for themselves.

If schools make decisions about inputs, they can then be judged by their outputs – that is by their success in educating children. And it is parents who should be making these judgements. It seems that the educational establishment, even in the Conservative Party, cannot rid itself of the desire to control the way schools operate, focusing on the central planning of inputs. The Conservatives are in danger of holing their own flagship.