Business in education: a reassessment of the contribution of outsourcing to LEA performance

Abstract

New Labour promised to introduce dramatic reforms to the education system when it came to power in 1997 and one of the key strategies it employed in the pursuit of educational improvement was the utilisation of the methods of the private sector. Arguably its most controversial policy was its effective privatisation of the functions of ‘failing’ Local Education Authorities (LEAs). Although criticisms of this policy were widespread, the potency of the arguments against private sector involvement in education waned somewhat following the publication of a comprehensive investigation into outsourcing by the Confederation of British Industry (CBI) in 2005. This report, entitled The Business of Education Improvement claimed, on the basis of its analysis of Department for Education and Skills (DfES) data, that the outsourced authorities were comprehensively outperforming those that remained in the state sector. However, the conclusions of the CBI’s report were, in many instances, highly misleading. This paper provides a brief background to Labour’s privatisation programme, followed by a reassessment of the performance of the outsourced LEAs. Contrary to the conclusions reached in the CBI’s report, the analysis here finds no evidence to suggest that the outsourced LEAs performed better than those that remained in the public sector. If anything, on the rather narrow assessment of performance offered by the CBI, LEAs appear to perform better under public sector management.