catallaxy files

catallaxy in technical exile

For-profit vs not-for-profit private schools

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In NSW and Queensland, people have been fighting vigorously to prevent for-profit schools starting up. In NSW, as reported in the SMH yesterday, they are trying to stop a school that is simply linked with ABC Learning (though presumably ABC will make money out of it via inflated “management” fees or something like that). On the local council covering the proposed site of the school, there was an unsuccessful attempt to prevent the necessary rezoning process commmencing:

A Cessnock Greens councillor, James Ryan, said there had been growing opposition to the proposal to rezone public land.

“This school will have lavish facilities and charge mid-tier private school fees,” he said. “That is far more than average parents in Kurri and Weston can afford.”

Shock, horror! Lavish facilities for kids, when they should be grateful for the leaking, freezing-in-winter, boiling-in-summer 30-year old portable classrooms the public system gives them! And since when do Greens councillors care about nasty corporations misjudging their market?

We already know that the public school system is offering a product that, for about a third of parents, they can’t even give away. So clearly there are things the public system is not providing that parents are prepared to pay for. What’s interesting here, I think, is that there are entrepreneurs who think that they can take on the non-profit private school sector and come away with a profit. They must believe either or both of:

1) The non-profit privates are not offering are an education product parents may want. This is, in my view, possible. Most of the not-for-profit sector is at least nominally church-affiliated. But with a large minority of Australians having no religious affiliation there is probably a market for education that is entirely free of spiritual superstitions at least. For the teacher unions prejudiced against both religion and the profit motive this creates quite a dilemma. Which do they hate most??

2) The non-profit privates have inefficiencies or other organisational problems that create room for a for-profit school. The critics of for-profit schools (their various arguments are discussed by Ross Farrelly here (pdf)) tend to assume that the profit motive will displace a disinterested concern for the students. However, this is not correct. As has been argued many times in many countries, public systems have been captured by teacher unions, who have pressured governments to fund things such as smaller class sizes that reduce work for teachers but have little or no effect on education outcomes. In the not-for-profit private sector, things are more complex. The semi-charitable impulse of many such schools means that the school and their staff will go beyond what they strictly have to do in supporting students, and beyond what a for-profit is likely to do. I went to such a school, which would deliberately enrol high-maintenance students in the hope of “turning them around”. On the other hand, the school ethos could sometimes get in the way of good education (quite aside from wasting time on bible studies). When once my mother complained about a particular teacher, he was defended not in terms of his abilities as a teacher but his devoutness as a follower of the school’s religious beliefs. If nothing else, preferring teachers of a particular religious background greatly narrows the staff selection pool. A for-profit school would move more quickly to remove incompetent teachers from the classroom (and without the religious tie, parents would also be more likely to send their kids somewhere else).

In any case, I can’t see why we need to settle these issues before for-profit schools are established. If there is something wrong with for-profit schools, the market will deal with it quickly as the schools will not be able to find enough pupils and will fold. And that is a lot better situation than parents in the public school system are in, where bad schools can go on harming kids’ prospects for decades because they face only very blunt political accountability, and not the fine-tuned accountability of the market.

Written by Admin

June 25, 2006 at 11:09 am

Posted in Uncategorized

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