The Privatisation of Education

A summary of endogenous and exogenous privatisation in England and Wales since the 1988 Education Act, and evaluations.

Education in England and Wales has become increasingly privatised since the 1980s. The 1988 Education Act introduced endogenous privatisation through marketisation and New Labour, the Coalition and the Tories since 2015 have pursued exogenous privatisation through setting up academies and getting more private companies involved with running educational services.

This post covers the following:

  • what is privisation?
  • State and private education in the U.K.
  • Increasing privatisation
  • Exogenous and Endogenous education
  • Arguments for the privatisation of education
  • Arguments against the privatisation of education.

What is Privatisation?

Privatisation is where services which were once owned and provided by the state are transferred to private companies, such as the transfer of educational assets and management to private companies, charities or religious institutions.

The UK government spends approximately £90 billion a year on education, which includes to costs of teacher’s salaries, support workers, educational resources, building and maintaining school buildings, and the cost of writing curriculums, examinations and inspections (OFSTED), which means there is plenty of stuff which could potentially be privatised.

Most aspects of education in the UK have traditionally been run by the state, and funded directly by the government with taxpayer’s money, managed by Local Education Authorities (local councils). However, with the increasing influence of Neoliberal and New Right ideas on education, there has been a trend towards the privatisation of important aspects of education, both in the UK and globally. In other words, increasing amounts of taxpayer’s money goes straight to private companies who provided educational services, rather than to Local Education Authorities.

Private and State Education in the UK

The U.K. has always had private schools, also known as independent schools. These are fee paying schools which are entirely funded by the parents (or other wealthy benefactors) who pay annual fees to send their children to them.

Only the very wealthiest of parents (7%) can afford to send their children to independent schools and most parents (93%) rely on state funded education, which is funded tax payers, which has been the case since the Foster Act introduced free education for all children from the age of 10 in 1870.

Successive education acts gradually expanded the scope of state education throughout the late 19th and early to mid 20th centuries and by the 1970s Britain had one of the most broad ranging comprehensive education systems in the world, delivering free education to every 5-16 year old entirely funded and delivered by the state and managed by Local Education (government) authorities.

During this time Independent schools continued to exist and wealthy parents were free to send their children to them if they could afford the fees, so we’ve always had a ‘purely private’ education system, just only available to the minority.

The Privatisation of State Education

When the New Right conservative government came to power in 1979 they looked at State education, thought it was inefficient and sub-standard compared to the quality of education being delivered by independent schools.

They started a process of privatising state education and this process continued under New Labour (1997-2010) and the Coalition Government (2010 – 2015) and has been carried on to the present day under the current New Right Conservative government.

Endogenous and Exogenous Privatisation

Ball and Youdell (2007) distinguish between endogenous privatisation (privatisation from outside) and exogenous privatisation (privatisation within the education system)

Endogenous privatisation involves the establishment of a market in education – giving parents the right to choose which schools to send their children to and making schools compete for pupils in a similar way to which companies compete for consumers.

Exogenous Privatisation involves both British and international companies taking over different aspects of the UK education system, so the government gives money to private companies to run services related to education rather than the state running these services directly.

Endogenous Privatisation

Endogenous privatisation refers to ‘privatisation within the education system’ – it involves the introduction of free-market principles into the day to day running of schools. This is basically marketization and includes the following:

  • Making schools compete for pupils so they become like businesses
  • Giving parents choice so they become consumers (open enrolment)
  • Linking school funding to success rates (formula funding)
  • Introducing performance related pay for teachers
  • Allowing successful schools to take over and manage failing schools.

Broadly speaking endogenous privatisation was achieved through the 1988 Education Act, and was just tweaked to run more efficiently in following decades (for example by allowing successful academies to take over failing schools and by tweaking league tables so that schools couldn’t ‘game’ them).

Refer to the post on the 1988 Education act for the strengths and limitations of this type of privatisation!

Exogenous Privatisation

Exogenous privatisation is where private companies take over the running of aspects of educational services from the state.

Exogenous privatisation is what we’ve seen a lot more of since the New Labour government came to power in 1997 and introduced academies and then went on to outsource a lot of education services to private companies, a process which has been continued since and to the present day.

Examples of exogenous privatisation include…

  • The setting up of Academies. Since New Labour, the establishment of Academies has meant greater involvement of the private sector in running schools. Academies are allowed to seek 10% of their funding from businesses or charities, which increases the influence of private interests over the running of the school, and some recent academy chains such as the Academies Enterprise Trust are run by private companies, and managed by people with a background in business, rather than people with a background in teaching.
  • The Building and maintaining school buildings – Under New Labour A programme of new buildings for schools was financed through the Private Finance Initiative (PFI). Private companies did the building, but in return were given contracts to repay the investment and provided maintenance for 25-35 years. The colleges, schools or local education authorities had to pay the ongoing costs.
  • Running examination systems – The UK’s largest examinations body Edexcel is run by the Global Corporation Pearsons. Pearsons runs the exam boards in over 70 countries, meaning it sets the exams, it pays the examiners, it runs the training courses which teachers need to attend to understand the assessment criteria, and increasingly it writes the text books.
  • The Expansion of the Education Services Industry more generally. This is related to the above point – There are more International Corporations involved in education than ever before – two obvious examples include Google and Apple, both of which are well poised to play an increasing role in providing educational services for a profit.

Arguments for Privatisation

The main perspectives which argue for privatising education are Neoliberalism and The New Right.

The Neoliberal/ New Right argument is that state-run education is inefficient. They argue that the state’s involvement leads to ‘bureaucratic self-interest’, the stifling of initiative and low-standards. To overcome these problems the education system must be privatised, and New Right Policies have led to greater internal and external privatisation.

The main argument for endogenous privatisation is that the introduction of Marketisation within education has increased competition between schools and driven up standards.

The main argument for exogenous privatisation is that private companies are used to keeping costs down and will run certain aspects of the education system more efficiently than Local Education Authorities, even if they make a profit. Thus it’s a win-win situation for the public and the companies.

Arguments against the Privatisation of Education

If private companies have an increasing role in running the education system this may change the type of knowledge which pupils are taught – with more of an emphasis on maths and less of an emphasis on critical humanities subjects which aren’t as profitable. Thus a narrowing of the curriculum might be the result

Stephan Ball has also referred to what he sees as the cola-isation of schools – The private sector also increasingly penetrates schools through vending machines and the development of brand loyalty through logos and sponsorships.

There might be an increasing inequality of educational provision as private companies cherry pick the best schools to take over and leave the worst schools under Local Education Authority Control.

If we want universal education for all in our current very unequal society, the state probably has to be involved in some way. If we abandoned state education altogether and moved to a purely independent school system based on fees then millions of children would get no education at all because millions of parents lack the means to pay fees because they are too poor.

Simon et al (2022) (1) compared for profit early years providers with not for profit early years providers in England and Wales during the period of 2014-2018. They found that private providers were far more likely to have high levels of debt, poor accounting and spent less on wages proportionate to the funding they received from government.

They theorised that for profit nursery chains were deliberately putting nurseries at risk of bankruptcy in order to extract government money to parent companies. (Presumably if the nurseries did go bankrupt the government would just have to bail them out!).

The main perspective which criticises the privatisation of education is Marxism.


For more links to my posts on the sociology of education please see this page, which follows the AQA A-level specification.

To return to the homepage –