Neoliberalism and the Privatisation of Education

Last Updated on November 6, 2026 by Karl Thompson

Neoliberalism is the belief that free markets are the best way to organise almost everything, including public services such as education. It has been the dominant influence on education policy in Britain, and in many other countries, since the early 1980s.

Neoliberal ideas shaped education under the Conservative governments of 1979 to 1997, New Labour from 1997 to 2010, and the Coalition and Conservative governments from 2010 to 2024. That’s why the British education system now has competition between schools, parental choice, league tables, academies and a growing role for private companies. Labour’s Children’s Wellbeing and Schools Act 2026 has reversed some of these changes, but the basic market framework remains.

This post explains what neoliberalism is, the four key ideas of the neoliberal approach to education, Stephen Ball’s account of how neoliberal reform has worked, and how to evaluate it. The neoliberal perspective is part of the education module for AQA Paper 1 (7192/1).

What is neoliberalism?

Neoliberalism is an economic and political doctrine. Its starting point is that markets are more efficient than the state at providing goods and services, because competition forces providers to improve and keep costs down. Two of its most influential thinkers were the economists Friedrich Hayek, whose The Road to Serfdom (1944) attacked state planning, and Milton Friedman. In an essay called ‘The Role of Government in Education’ (1955), Friedman proposed giving parents vouchers to spend at the school of their choice, so that schools would have to compete for them.

Applied to education, neoliberals argue that:

• state-run education is inefficient, because schools that face no competition have no incentive to improve
• schools should compete for pupils, and their funding should depend on how many they attract
• parents should be treated as consumers, free to choose
• private companies can run many parts of education more efficiently than the state
• education’s main purpose is to make the country economically competitive

Neoliberalism and the New Right: what’s the difference?

Students often treat these as the same thing, and they do overlap a lot. But they aren’t identical, and showing that you know the difference is a sign of a top-band answer.

	Neoliberalism	The New Right
What it is	An economic doctrine: markets are the most efficient way to organise society	A political movement that combined neoliberal economics with conservative social values
Main concern in education	Efficiency, competition, choice, and education serving the economy	The same, plus tradition, shared national values and discipline
Role of the state	As small as possible, but needed to create and police markets	A strong state: national curriculum, testing, inspection
Who followed it	Every government since 1979, to different degrees, including New Labour	Mainly the Conservative governments of 1979 to 1997

So New Labour was influenced by neoliberalism, but it wasn’t New Right. See my posts on the New Right’s view of education and the New Right and neoliberalism: an introduction.

Four key ideas of the neoliberal approach to education

1. Competition between schools: endogenous privatisation

Endogenous privatisation is privatisation in public education: making state schools behave like businesses competing in a market, while they stay publicly owned. The main policy that introduced it was the 1988 Education Reform Act, passed by Margaret Thatcher’s government. It gave parents the right to choose (open enrolment) and made schools’ funding depend on how many pupils they attracted (formula funding). League tables, published from 1992, gave parents the information to compare schools.

The problem, critics found, was that competition led to cream-skimming and polarisation. The schools at the top of the league tables became oversubscribed and could pick the most able pupils, while the schools at the bottom took the pupils nobody else had chosen. Good schools got better and weak schools got worse. In the late 1980s and early 1990s, some schools also excluded pupils who might lower their results.

Later governments have had to adjust the market to limit these effects. League tables now measure the progress pupils make (Progress 8) as well as raw grades, and the pupil premium gives schools extra money for each disadvantaged pupil, so they have a financial reason to want them.

2. Private companies in education: exogenous privatisation

Exogenous privatisation is privatisation of public education: private companies being paid public money to run parts of the education system. It grew mainly under New Labour from 1997 and has continued since. Examples include:

• Exam boards and publishing. Pearson, a global education company, owns the Edexcel exam board and publishes textbooks for the courses it examines.
• Building schools. Under the Private Finance Initiative (PFI), private companies built and maintained schools, paid back over contracts lasting decades.
• Education services. Catering, cleaning, IT, supply teachers, school improvement consultancy and much more are now bought from private providers.
• Technology. Technology companies such as Google and Microsoft provide the platforms many schools now depend on.

Academies are a borderline case. Academy trusts are charities, not profit-making companies, so becoming an academy is mostly endogenous privatisation: business-style management inside a publicly funded school. But academies also buy many services from private firms, which is exogenous.

Exogenous privatisation isn’t a free market in the ordinary sense, because parents and pupils don’t pay these companies directly. The government takes taxpayers’ money and pays it to private companies, rather than employing people to do the work itself. The argument is that companies can do the job more efficiently.

For the full picture, see neoliberalism and the privatisation of education, which covers Ball and Youdell’s distinction in depth.

3. Choice and voice for parents and pupils

Parental choice is what makes the education market work: schools only compete if parents can choose between them. Neoliberals also argue that schools should listen to pupils and parents (‘voice’), as businesses listen to customers.

Two policies widened the range of schools to choose between. Academies, introduced by New Labour from 2002, brought new organisations into running schools; by January 2026, 83.9% of state secondary schools in England were academies. Free schools, introduced by the Coalition from 2011, let parents, teachers, charities and faith groups set up new state-funded schools. There were 425 by 2016.

Alongside choice came the personalisation of learning: individual learning plans, targets and progress reviews, so that each pupil is treated as an individual consumer of education. For more, see has education in the UK become more personalised?

The research on whether all parents can actually choose is covered in my post on unequal parental choice.

4. Top-down performance management and surveillance

The fourth idea is constant measurement. Many academy trusts are large organisations with a chief executive, sometimes called a ‘super head’, who monitors the performance of every school in the trust. Each headteacher monitors their own staff. If a school underperforms, its leadership can be replaced, possibly by someone from another school in the trust. The result is the continuous measurement of schools, teachers and pupils, so that those at the top can spot underperformance and intervene.

The sharpest version of this was taking schools out of local authority control. From 2010, underperforming schools were increasingly turned into sponsored academies run by existing trusts. The Education and Adoption Act 2016 made this a duty for schools judged to be failing. That duty was removed in June 2026, and is now a power ministers can choose to use.

Stephen Ball: four mechanisms of neoliberal reform

Stephen Ball is the sociologist most associated with the study of neoliberal education policy. In The Education Debate (2013), he analyses reform through four mechanisms. These come from the government’s own model of public service reform, set out in The UK Government’s Approach to Public Service Reform (2006), which applied to education, health and other services alike. In theory, the four together create a ‘self-improving system’.

1. Top-down performance management

Ball traces this back to James Callaghan’s Ruskin College speech of 1976, when a Labour prime minister questioned whether education was fit for purpose. Teachers came to be portrayed as resistant to change, or as too progressive. Ball argues that this began a long history of politicians and the media talking teachers down.

The 1988 Act’s national curriculum and testing, and the league tables published from 1992, made schools’ performance public. New Labour went further after 1997, with ‘standards’ as a watchword and national targets for the education system as a whole. Ball argues that setting national targets reflected a new way of seeing education: as a single system, and as part of national economic competitiveness.

Ball draws on Jenny Ozga’s description of this as ‘governing by numbers’: governing schools through audit, inspection, testing and the measurement and comparison of results, which together make surveillance possible. The Coalition kept this approach but changed the measures, for example introducing the English Baccalaureate (EBacc).

2. Competition and contestability

This mechanism is the market itself. The early Conservative reforms emphasised endogenous privatisation: making schools act like businesses by linking funding to recruitment, devolving budgets and publishing league tables. Ball notes that the system then had to be ‘tweaked’ to deal with cream-skimming and exclusions.

New Labour put much more emphasis on exogenous ‘contestability’: opening up public services to new providers, through outsourcing and contracts, so that if public provision didn’t work, private providers could take over. It also increased the diversity of schools: specialist schools, faith schools and academies, alongside criticism of what Labour called ‘bog-standard comprehensives’. The Coalition extended academies and added free schools.

A note on who coined the terms: the endogenous/exogenous distinction is usually credited to Ball and Youdell’s 2007 report for Education International, but Ball’s account in The Education Debate traces the terms to Hatcher (2000).

3. Choice and voice

This mechanism puts power in the hands of the people who use public services. Ball argues that it is part of a move from a producer culture, in which teachers and local authorities decide, to a consumer culture, in which parents and pupils are ‘citizen-consumers’ (a term he takes from Clarke and colleagues, 2007).

Supporters claim that choice drives up standards, promotes equality and allows learning to be personalised. Ball argues that all three claims are contestable, and that his own research and others’ show choice policies increasing inequality along class lines. He argues that New Labour expanded choice partly to appeal to middle-class voters, and that the Coalition’s free schools took it further.

4. Capability and capacity

The final mechanism is about remaking the people who run and work in schools. Ball identifies three parts:

• Leadership. Headteachers are recast as leaders and managers of performance rather than senior teachers, with training for a new kind of school leader and ideas borrowed from business management.
• Collaboration and partnership. Schools are expected to compete and to work together at the same time, for example in academy trusts and federations.
• Remodelling teachers. Teachers are managed more closely, with pay increasingly linked to performance. Academies and free schools were allowed to employ teachers without qualified teacher status, though the 2026 Act requires qualified teachers in academies from September 2027.

Ball’s conclusion

Ball argues that these four mechanisms together model schools on commercial businesses. Professional values are worn away and replaced by competitive, entrepreneurial ones. Education is increasingly subordinated to the needs of the economy and turned into a commodity. Parents are cast as consumers. Teachers, in his account, are caught between prescription from above and constant performance measurement, and are not trusted. And he asks whether the league tables at the centre of it all measure anything meaningful.

Ball on neoliberal education policy since 1979

The Conservatives, 1979 to 1997

Ball identifies six elements of the Conservatives’ framework for education, built mainly on the 1988 Education Reform Act:

• a national curriculum
• suspicion of teachers’ professionalism, and more accountability and control
• ‘teacher-proof’ testing, providing information for the market
• choice for parents
• budgets devolved from local authorities to schools
• a bigger role for governors and headteachers in running schools

Together these created the infrastructure for an education market: parental choice, per-pupil funding, diversity of provision, competition, league tables, and schools managed like businesses. The Technical and Vocational Education Initiative (TVEI) also tried to reorient schools towards the needs of employers.

New Labour, 1997 to 2010

Ball argues that New Labour continued and extended neoliberal policy, with three shifts: a stronger focus on the ‘knowledge economy’; the state as a ‘competition state’, a term from Bob Jessop (2002) for a state whose main aim is to make its economy competitive; and a new language of New Labour values. Its ‘Third Way’ used a more flexible range of state roles than market fundamentalism did, but its aim was to make the market work properly, not to replace it. Ball calls it ‘warmed-over neoliberalism’.

Ball also describes, drawing on Kenway (1990), a ‘discourse of derision’: comprehensive schools were stereotyped as failing (‘bog-standard’) to justify reforming them.

Since 2010

The Coalition and Conservative governments extended the market further, turning most secondary schools into academies and adding free schools. See my posts on Coalition education policy and Conservative education policy 2015–2024.

Since 2024, the direction has partly reversed. The Children’s Wellbeing and Schools Act 2026 requires academies to follow the national curriculum from 2028, employ qualified teachers from September 2027 and pay teachers at least national minimum rates, and restores councils’ power to open new schools. This is useful evaluation: it shows that neoliberal reform isn’t a one-way process, and that a government can take back powers it handed to the market.

Evaluating the neoliberal perspective on education

Arguments for

• Competition raises standards. Neoliberals, and Chubb and Moe (1990) in the USA, argue that schools facing competition have to improve. Exam results rose steadily after 1988, though grade inflation is the obvious counter-argument.
• Choice and diversity. Parents are no longer simply allocated the nearest school, and there is a much wider range of schools than before 1988.
• Efficiency. Supporters argue that private providers can deliver some services more cheaply.
• Durability. Every government since 1979 has kept the basic market framework, which suggests it has broad support.

Arguments against

• Choice increases class inequality. Ball and his colleagues found that middle-class parents are far better placed to use the market than working-class parents. See unequal parental choice.
• Cream-skimming and polarisation. Competition helps popular schools and hurts unpopular ones, widening the gap between them.
• Teaching to the test. Governing by numbers pushes schools to focus on what is measured. Gillborn and Youdell’s ‘educational triage’ is the classic example: see Gillborn and Youdell: Rationing Education.
• The contradiction. A doctrine that wants a smaller state has produced a highly centralised one, controlling the curriculum, testing and inspection.
• Marxists argue that neoliberalism hands public education to private capital and uses the language of choice to make inequality look fair.
• Social democrats argue that equality of opportunity needs state investment, not markets.

Neoliberalism in the exam

Neoliberalism and the New Right come up on Paper 1 as perspectives in 30-mark essays, and through the marketisation and privatisation questions. The real AQA marketisation questions so far are listed, with links to answers, in my post on [LINK NEEDED: Marketisation of Education].

Sociology of Education Revision Bundle

Signposting and Related Posts

This post is part of the education module for AQA A-level sociology. Related posts:

Sources

• Ball, S. J. (2013) The Education Debate, Policy Press.
• Ball, S. and Youdell, D. (2007) Hidden Privatisation in Public Education, Education International.
• Chubb, J. E. and Moe, T. M. (1990) Politics, Markets and America’s Schools, Brookings Institution Press.
• Children’s Wellbeing and Schools Act 2026.
• Department for Education (2026) Schools, pupils and their characteristics: 2025/26.
• Friedman, M. (1955) ‘The Role of Government in Education’.
• Hayek, F. A. (1944) The Road to Serfdom, Routledge.
• HM Government (2006) The UK Government’s Approach to Public Service Reform, Prime Minister’s Strategy Unit.