The Multiple Privatisations of Education

- Liz Gordon

The Tomorrow’s Schools reforms of 1989, and associated changes in the early childhood and tertiary sectors, were intended, in part, to meet New Right goals of privatisation of education. Privatisation should be considered in this context not as a single act, but as a number of elements that together vest control, resources and/or ownership in the private sector. It has been most successful in the early childhood sector, which, outside the kindergartens, is largely privatised, with Government subsidies going to a wide range of providers. In many cases, this privatisation in fact vests control in trusts and community organisations. The main attempt to turn early childhood into a transnational for-profit business came from one company, as its Wikipedia entry notes:

ABC Learning is an Australian company that was the world's largest provider of Early Childhood Education services. It is listed on the Australian Securities Exchange with its market capitalisation reaching $A2.5 billion in March 2006.The company is now in administrative receivership after fallout from the subprime mortgage crisis caused debt repayments to overwhelm the company and the auditors failed to sign off on the financial reports citing the need to recast previous year's reported profits. ABC Learning is now operated by the not-for-profit syndicate GoodStart Childcare Limited”.

In the tertiary sector, there are around 700 private tertiary enterprises (PTEs), ranging from small-scale community-led ventures, often offering second chance or trades courses for young people who failed at school. There are also some larger organisations, as well as a large number of English Language schools offering courses to international students, mainly from a range of Asian countries. As far as I know, most PTEs are New Zealand owned. There is no chance that the universities and polytechnics will be privatised wholesale, although there are plenty of examples of internal privatisation within them. Such examples include the following:

  • Contracting out of services that used to be supplied internally
  • Fee rises that increase the proportion of private funding
  • International students who pay full fees
  • Commercialisation of services and intellectual property
  • Joint ventures and general “venturing”
  • Public-private partnerships (PPPs) e.g. for new buildings

There are only around 35 public tertiary organisations, and while they are the source of significant opportunities for privatisation, in practice the pickings are relatively lean. But consider the schooling system. The picture is quite different there. There are around 2,600 State schools in New Zealand, and we have the smallest private school sector of any comparable country, at around 3-4%. For the past 20 years, school privatisation has, internationally, been a potential new frontier of capitalism. In general, it takes five main forms, and I will consider each in turn.

1. Funding Paid From Public Funds To Private Schools.

The 1900-99 National government put in place a subsidy to private schools, and the current Government increased the amount. The main argument used by those governments is that such subsidies constitute a cost-saving for the State, as it is cheaper than funding additional places at State schools. However, in most cases (I am aware there are exceptions) this funding is simply a subsidy to wealthy people who want their children schooled in exclusive schools. As a result, the average amount that private schools receive per place is at least double what is provided to State schools.

2. Funding Places In Private Schools For State Students

The current and past National governments have also exhibited a distressing penchant for funding a small number of scholarships for moderate income students to attend private schools. Under the current regime these are called “Aspire” scholarships. The underlying assumption is that there are some students who are too good to attend State schools, and who will benefit by attending the “better” private schools. Interestingly, while private schools are better funded, there is no research that demonstrates that, all else being equal, private schools provide a better education. On the contrary, there is research which shows that private school students tend to do worse then their State counterparts in the first year of university.

3. Using Private Funds To Build Schools, Or PPPs

The idea of public private partnerships to build State infrastructure refuses to go away, despite evidence, wherever it has been tried, that PPPs are more costly and less effective that other modes of funding. When the National government announced in 2010 that it was considering such partnerships to build schools, the New Zealand Council for Infrastructure Development ( said: "Experience in both the United Kingdom and Australia shows that the partnership approach, when properly implemented, gives rise to better educational outcomes". Such lies, and in the media too!

4. Handing The Management Of Schools Over To Private Sector Firms

To date, there has been no formal proposal to hand the running of “failing” schools over to private educational management organisations (EMOs), such as Edison from the US. New Zealand is probably quite safe from such proposals, as outcomes of such schemes, and especially the large Edison Schools franchise, have been equivocal, to say the least. However, changes to the Education Act in 2010 allows a “named body corporate” to be appointed as a statutory manager of a school (it used to be that only an individual could be appointed), which the Quality Public Education Coalition saw as opening the door for external management of State schools. Thus the potential exists.

5. Disrupting The Provision Of State Funding To State Schools To Set The Scene For Later Privatisation

Through the 1990s, National fought an epic struggle to “bulk fund” teacher salaries which make up the majority of State school funding. Had it succeeded the link between the provisions of the national collective agreements for school staff on the one hand, and the amount of funding provided to schools, would have been irrevocably broken. This would have put enormous pressure on the existence of the national contracts, and would inevitably have led to “bulk-underfunding”, as the Post-Primary Teachers’ Association put it at the time.

The further that the State can place the schools from direct control and funding, the easier it is to privatise individual school management or control. For example, the charter schools in the USA and similar schools in the UK are essentially bulk funded schools. Many in the US are anti-union or have particular religious approaches. There is, fortunately for NZ, no evidence that such schools have succeeded in raising the educational achievement of students. No such policy is currently mooted here.

In summary, there are numerous ways that schools in New Zealand can be privatised, and numerous groups, national and international, interested in helping this happen. Whether building schools, running them, charging fees or shifting funds away from the public sector, there are many people ready to help! A free, public education system has been guaranteed under the Education Act ever since 1877, but for the past 20 years this has been under threat, as policies of privatisation have nibbled away at the edges. Vigilance is required to maintain our schooling system for and by the people of New Zealand, not those wishing to profit at our expense.

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Foreign Control Watchdog, P O Box 2258, Christchurch, New Zealand/Aotearoa. August 2008.


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