Hidden privatisation in public education

published 1 February 2016 updated 8 February 2016
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Schools being business-like or like-businesses: ‘endogenous’ privatisation

The ‘market form’ is the key device of hidden privatisation in education. The development of what are often known in the critical literature as quasi-markets rests primarily upon the introduction into the state education system of forms of school choice – the right of parents to choose between schools.

Choice is facilitated by moves to diversify local education provision alongside the removal or weakening of bureaucratic controls over school recruitment, school funding tied to this recruitment, and support for and encouragement for choice and of movement around the system. An outcome that policy makers seek from these moves is the production of competition between schools, competition that is expected to have the effect of raising standards across the system; either through the closing down of ‘poor’ schools which fail to attract sufficient parental choices or by raising the performance of these ‘poor’ schools as a result of the competition for choices.

Education markets are not in any simple sense ‘free markets’, rather they are subject to considerable regulation, direction and involvement by the state. In these circumstances the state acts to set system targets and benchmarks, monitor and record performance and write and award services contracts rather than deliver education services.

Key features of hidden privatisation in making the public school system more business- like are the rise of New Public Management (NPM) and the role of the school manager. The manager is a new actor on the stage of public sector organisations and is the central figure in the reform of the public sector and the introduction of quasi-markets. The term ‘educational management’ began to be used in the 1970s, and brought with it a set of methods, ideals and concepts (objectives planning, human resources, performance monitoring, and accountability) from the private sector. The manager is a key agent of organisational change and a cipher for privatisation policies. Significant education policy shifts from the 1980s on gave managers devolved powers to control their organisational budgets, their workforce (pay and recruitment) and internal decision-making in innovative and creative ways to achieve the goals and purposes of education reform. The purpose of such devolution, as the OECD put it, 'is to encourage managers to focus on results by providing them with flexibility and autonomy in the use of both financial and human resources' (1995, p. 8). NPM has been the primary means through which the structure and culture of public services are recast in order to introduce and entrench the mechanisms of the market form and forms of privatisation. In doing so it affects how and where social policy choices are made and systematically side-lines and disempowers educational practitioners. It also increasingly subjects them to new forms of control through performance management techniques.

Accountability and performance management mechanisms, sometimes including performance-related pay, are again techniques of reform which were transferred into the public sector from business but these origins are now no longer acknowledged. These techniques are intended to ensure that educational processes are made more transparent but can also have powerful effects in re-orienting the work of schools and teachers and changing the values and priorities of school and classroom activities.

In some instances forms of privatisation are pursued explicitly as effective solutions to the perceived inadequacies of public service education. However, in many cases the stated goals of policy are articulated in terms of  ‘choice’, ‘accountability’, ‘school improvement’, ‘devolution’, ‘contestability’ or ‘effectiveness’.  Such policies often are not articulated in terms of privatisation but nonetheless draw on techniques and values from the private sector, introduce private sector participation and have the effect of making public education more like a business.

It is not simply education and education services that are subject to forms of privatisation: education policy itself – through advice, consultation, research, evaluations and forms of influence – are being privatised. Private sector organisations and NGOs are increasingly involved in both policy formation and policy implementation.

Privatisation can be understood as being comprised of two key types:

  1. Privatisation in Public Education or ‘endogenous’ privatisation These forms of privatisation involve the importing of ideas, techniques and practices from the private sector in order to make the public sector more like businesses and more business-like.
  2. Privatisation of Public Education or ‘exogenous’ privatisation These forms or privatisation involve the opening up of public education services to private sector participation on a for-profit basis and using the private sector to design, manage or deliver aspects of public education.

The first form of privatisation, where the public sector is asked to behave more like the private sector, is widespread and well established. The second form of privatisation, where the private sector moves into public education, is a newer but rapidly growing form of privatisation. These forms of privatisation are not mutually-exclusive and are often inter-related, indeed, exogenous privatisation is often made possible by prior endogenous forms.

Both privatisation in public education and privatisation of public education often remain hidden and are not subjected to public debate – in the first case techniques and practices are not named as privatisation, in the second case privatisation is not publicly known about or properly understood.

These various forms of privatisation change the way in which education is organised, managed and delivered; how the curriculum is decided and taught; how students’ performance is assessed; and how students, teachers, schools and communities are judged. These forms touch every part of what shapes the education system. They are at the centre of the shift from education being seen as a public good that serves the whole community, to education being seen as a positional or private good that serves the interest of the educated individual, the employer and the economy.

Bringing the Private Sector into Schools: ‘exogenous’ privatisation

The participation of the private sector in the delivery of public education is growing internationally. The private sector and NGOs have long been involved in the delivery of education in parts of the developing world where full state-funded education has not been established. These providers have also long delivered elite, religious and other alternative forms of education in western industrialised nations. Yet the possibility of the public education sector as a site for significant profit-making has emerged only recently, often as an offshoot from or development of the sorts of often hidden forms of privatisation in public education detailed in the previous section.

This private sector participation ranges from multi-million dollar building projects (Public Private Partnerships) and national contracts for systems management and testing to involvement in the small-scale, everyday activities of schools and with teachers. For example, the recent introduction of a system of National Testing in Japan was contracted out to two companies NTT Data and Benesse (Japan’s largest private provider of after-school and child care services) – eight companies submitted bids for the tender which involved the printing, delivery, marking, statistical analysis of the tests and provision of results to local authorities. In the USA many school districts now contract-out their assessment and student testing, data management, remedial services and subject –specific curriculum development work. Whiteboards are increasingly common in classrooms around the work and bring with them the use of commercial teaching software and training provided by the board companies.

In the education sector, governments have historically made considerable use of contracting for ‘non-core’ educational services. However, there are now a number of examples of governments in countries as diverse as the United States, the Philippines, Colombia, New Zealand and the United Kingdom contracting directly with the private sector for the delivery of ‘core’ education services. In many countries this practice is now so normal that it provokes little or no public comment. Not only contracting out services but contracting out schools have become part of this exogenous privatization. Individual state schools or groups of schools have been handed over to private companies to run under contract on a ‘for profit’ basis.  Here private providers are regarded as being able to provide a better quality of education service than municipal schools, although this is not always the case in practice.

Public Private Partnerships (PPP) involve the use of private providers to design, build, operate and manage and state education facilities on a lease-back basis. This transfers capital costs and some risk to the private sector. It also commits governments or local authorities to long- term lease repayments. This practice is advocated by the World Bank. There is now a thriving secondary market in PPP contracts. There are varying levels of public awareness and understanding of these partnerships and their implications.


The tendencies outlined and more are not just technical changes in the way in which education is delivered. They provide a new language, a new set of incentives and disciplines and a new set of roles, positions and identities within which what it means to be a teacher, student/learner, parent etc. are all changed.

Privatization in both forms, endogenous and exogenous, has profound implications for the future of teachers’ careers, pay and status, and the nature of their work and their degree of control over the educational process. Privatisation challenges the capacities of teachers’ Trade Unions to bargain collectively on behalf of their members, secure favourable, single agreements with employers and more generally participate in the education policy landscape. It also changes the work of teachers in many areas: how teachers are prepared; the nature of and access to ongoing professional development; the terms and conditions of teachers’ contracts and pay; the nature of teachers’ day-to-day activities and the way they experience their working lives. The ‘flexibilisation’ of teachers work is a key component of most versions of privatisation and this threatens to alter both the perception of teachers within society and the quality of students’ experience in schools.

Privatisation in and of public education has its roots in the sorts of ‘small state-free market’ approaches to public services, what is sometimes called ‘neo-liberalism’, that have been evident in a wide variety of national contexts since the 1980s and which are now widespread internationally. In many developing nations privatisation tendencies are most prominent in newly established, often World Bank or Aid funded, special education projects.

Privatisation works as a policy tool in a number of ways, with a variety of ends and purposes. It is not a giving up by the state of capacity to manage social problems and respond to social needs but a new modality of state action. The privatisation of education and social welfare involves a shift in the role of the state from that of delivering education services directly, to that of contractor, monitor and evaluator of services delivered by a range of providers.

Market forms, competition, choice and a focus on performance management all carry with them ethical dangers and many examples of opportunistic and tactical behaviours are already apparent in schools and among parents within such systems. For the teacher competitive relations often produce ethical dilemmas between the interests of the institution and those of students. All of this is indicative of a general moral pauperisation of the moral sphere. These market forms can also have a significant impact on equity in education, not just in widening gaps between the privileged and the disadvantaged, but also in changing how equity and social justice in education are understood.

Policy and practice at country-level are changing extremely rapidly which means that accounts of the policy situation cannot be definitive but rather must be understood as snapshots at particular moments and responses to policy must be able to take account of this rapidly changing terrain.


OECD (1995). Governance in Transition: Public Management Reforms in OECD Countries. Paris, Organisation for Economic Co-operation and Development.