Rethinking School - The Problem of Education as a Business

Week 2 – of our Rethinking School Series

Last week, we introduced the topic of Rethinking School and looked at where children have started to disappear from the system. From this week, we will start exploring some of the reasons why families choose to homeschool. Starting with how education has become a business, potentially being more concerned about customers than students.

Education was once an entity of its own. Before recent policy shifts and accountability measures, UK schools operated very differently from businesses. Their funding came directly from local authorities, based on the needs of the community, rather than competing for pupils to secure money. This meant headteachers focused almost entirely on teaching, learning, and the welfare of pupils, rather than marketing or managing performance data. Emphasis was placed more on providing a broad, balanced education. Schools were more closely connected to their local communities, often working in partnership with other schools rather than seeing them as rivals.

Decisions were generally made with long-term educational aims in mind, not short-term performance targets. The priority was to meet children’s developmental needs, rather than to “compete” for results or resources. In this sense, schools were public services first and foremost, with no profit motive and little resemblance to a commercial enterprise.

In recent decades, some aspects of UK education have shifted to resemble business practices. This is partly due to changes in an understanding of what education is and a change to a ‘Service’ mindset. Schools aim to meet the needs of pupils and parents, sometimes adopting a “customer service” approach to communication and facilitation. We see this through some very outward signs:

1.     Performance measures and league tables – Schools are compared based on exam results and progress data, much like businesses compare sales figures. This can create competition for attracting pupils.

2.     Funding pressures – Schools receive funding per pupil, so falling enrolment can mean less money. On a per-pupil basis the total funding to be allocated to schools for 5–16-year-olds, in 2025-26 is £8,210. This amount is increased if the child has SEN, or is in care of the local authority etc. This creates an incentive to promote the school’s strengths to attract families—similar to marketing in business.

3.     Management styles – School leaders often use strategic plans, targets, and performance reviews to improve outcomes, which mirrors business management methods.

This mindset has significantly impacted education, as maintaining the business has become the top priority. A business is where individuals collaborate to provide goods or services that cater to the needs of consumers. Other businesses, and business leaders in particular, have a say in what they want the future workforce’s skills to be, which further confuses the issue of who the true customer in education really is—whether it is the student, the parent, the state, or the future employer.

Whilst this business first approach contributes to the positive image of a school in the eyes of parents or Government, an unfortunate casualty are the students themselves. Especially those who fails to meet the standards or image that the school wishes to project. Leaving students and their parents feeling like a cog in a machine, and not feeling like the kind of ‘customer’ that is welcome.

The Purpose of Businesses

The primary objective of most business entities is to achieve profitability. This entails generating revenue from the sale of their goods or services exceeding the expenses incurred in their production or provision.

The primary objective of mainstream education is to equip learners with the knowledge, skills, and values necessary for leading productive, fulfilling, and “successful” lives, while simultaneously contributing positively to society at the most cost-effective per-head level.

A business usually follows these steps:

1)    Identify a Need or WantBusinesses look for something people need or would like to have. For example, the propaganda for the need for a formal education suggests that it leads to productive, fulfilled, “successful” lives and contributes positively to society.

2)    Produce Goods or ServicesThe business uses resources to create products or offer services.

• Natural resources: (land on which the school sites, play grounds and other infrastructure)

• Human resources (teachers, teaching assistants and other school staff)

• Capital resources (school buildings, classrooms, books, computers and other learning tools and materials used in schools)

3)    Selling to CustomersThe business establishes a price and sells goods or services to customers. In contrast, mainstream education sells to its customers by having UK schools graded by Ofsted and subsequently placed in league tables. 

How League Tables Sells School Places

League tables rank educational institutions based on quantifiable performance indicators such as examination outcomes, pupil attainment, attendance rates, and Ofsted ratings. These rankings offer a comprehensive snapshot of a school’s performance relative to its peers, making them an invaluable resource for parents in making informed decisions regarding the placement of their children. It is widely suggested that league tables contribute positively by providing:

• Clear Comparisons: League tables facilitate rapid comparisons of schools based on objective data.

  
  

• Accountability: They motivate schools to uphold high standards, as performance is publicly disclosed.

  
  

• Evidence-based Decision-making: For parents seeking robust academic outcomes, league tables serve as a valuable indicator.

However, it is crucial to acknowledge several significant limitations when considering league tables and the promotion of school places.

• Narrow Focus: League tables primarily assess academic outcomes and may not adequately gauge pastoral care, extracurricular activities, or a school’s support for students with special needs.

• Contextual Factors: High scores may be influenced by selective admissions or local demographics and the use of tutors rather than solely reflecting the individuals schools teaching quality. Not all communities are getting a warm welcome by schools who want top grade students.

  
  

• Pressure and Competition: Oversubscribed high-ranking schools can be challenging to access, and the emphasis on league table performance may inadvertently encourage “teaching to the test.” Many children who lack academic prowess find themselves in a challenging situation after securing admission to a school solely based on their postcode, or their parents ability to work the system. This situation often leads to the necessity of additional lessons outside of regular class hours to maintain their academic progress and ensure their success in the curriculum.  This is not good for their mental health.

  
  

Another challenge faced by mainstream education is the limited choices available to parents. While league tables provide a ranking of schools, and private education offers the option to select a preferred institution, places are not always guaranteed. The majority of parents in mainstream education are constrained to their local area and have no direct control over their child’s school choice. The Local Education Authority (LEA) determines the school that each child attends, Parents may appear to have the option of choosing, but in reality, they only possess the right to express their preference.

An instance of the system’s ineffectiveness has recently come to light, as one of our parents has expressed their preference for schools that are within walking distance, as they do not own a car. Regrettably, they were only offered a place at a school situated three towns away. When they challenged this, they were offered an assisted school bus place. The time the bus would take to travel from the home town to the school added an extra hour, each way, to the teenager’s school day. Upon further investigation, we uncovered that the assisted school bus service was providing transportation for pupils from the town where the designated school was located to the schools for which this family had submitted applications. The local authority was providing assisted transportation both ways rather than simply placing local children in local schools. The reason behind these types of school place allocations remain unclear.  

The inherent conflict within the education sector, which operates as a business, lies in the fact that education is ostensibly compulsory. Customers lack the autonomy to select their destination and educational programme. The state assumes the responsibility of providing educational institutions to fulfil this compulsory obligation. However, if an individual is unable to conform to the mandatory school system they are left with homeschooling, which does not receive funding. So, we have the customer paying twice, once into compulsory education through tax and secondly funding homeschooling personally. It could be suggested that the business strategies being used by schools, rather than improvement on the previous educational modal, is actually just contributing to the choice to use alternative businesses, such as tutors or homeschooling companies. 

Earn Revenue Through the Business of Education

By providing education to its citizens, the country establishes a workforce that, upon being employed, contributes to the government’s revenue through taxation.

Pay Costs of the Business of Education

The tax levied is utilised to finance the education budget and cover expenses such as salaries, rent, materials, and energy bills. It is challenging to ascertain whether the government is generating sufficient revenue to cover the complete cost of education through clear and transparent revenue collection methods.  With statements like the government spent approximate 4.1% of the gross domestic product on education, in 2023/24. Approximately 10-15% of the council tax (depending on the council) goes toward schools, colleges, universities, and funding for student loans. This also includes early childhood education and programs to support teachers. Nevertheless, there is no unequivocal, definitive answer to the question: does the government generate sufficient revenue through taxation to cover the expenses associated with the “business” of education?

Make a Profit or Loss as the Business of Education

In the business world, profitability is relatively straightforward to determine. The following two fundamental rules apply:

1) If revenue exceeds costs, profit is generated.

2) If revenue falls short of costs, a loss is incurred.

It may be fairly self-evident that the business of state mainstream education is not generating a profit. However, it is may also be reasonable to assume that inflationary pressures on goods and services, the provision of special education needs, the cost of building maintenance, teacher and support staff pay awards, and other factors are contributing to the stringent punitive budgets. A recent survey by the National Education Union in October 2023 revealed that 92% of teachers believe current funding levels are not high enough to allow schools to employ enough teaching staff to support pupils’ learning. At the core all of theses blogs lies the question of whether main stream education genuinely contributes to a “successful life,” more than homeschooling can and we now ask if it does so when it is severely underfunded?

This week we have looked at how schools have become a business, how the service mindset of customers preference is not necessary a choice and whilst business theory may be making schools appear attractive on the surface, it is unclear who the real customer.  Larger numbers of children who pass through this “education as a business” system are in significant numbers choosing to leave rather than endure the ‘Service’ mindset. It is time to critically examine the “business” of education and its unintended consequences for individuals within the current education system.

Next week, we will be examining what the role of education might be in encouraging our families to home school.