The Interview: Learning to profit from a good education

Chris Woodhead, Chairman of Cognita

As a talent for making enemies, Chris Woodhead has few peers. The former chief inspector of schools became a hate figure for the teaching unions and was, and still is, vilified by the left.

As a talent for making enemies, Chris Woodhead has few peers. The former chief inspector of schools became a hate figure for the teaching unions and was, and still is, vilified by the left.

His relentless criticism of incompetent teaching, his traditionalist zeal for the importance of literacy and numeracy in primary schools and his continued advocacy of a voucher system for schools spending have left him with a reputation as the "wicked ogre" of state education, to use his own assessment.

Now the 58-year-old has transformed himself into the country's leading schools entrepreneur and his business ethos looks set to prove as controversial as his six years at Ofsted.

"I think that many parents are unhappy with the nature of state provision. The truth about state education is that if you live in the catchment area of a good school then you are going to get an excellent education for your kids. But the problem is that supply is not meeting demand and therefore parents, who quite understandably would prefer not to pay fees, have no option in their view but to go private. So the problem does lie with the state."

A problem for the state, however, is an opportunity for Mr Woodhead and his private equity backers. Just two months ago his new company, Cognita, a made-up name with obvious connotations with knowledge, made its first acquisition. It now owns 21 independent schools, catapulting it into pole position in the private sector.

Backed by Englefield Capital, a £500m private equity fund founded by Dominic Shorthouse, Mr Woodhead has spent more than £60m on buying schools. "We are ambitious. We haven't set a target but we would certainly expect to be north of 30 by the end of this year and we could go significantly beyond that."|

But can you really educate children properly and still make the rich returns demanded by private equity investors? Does the ruthless efficiency that these profit-hungry backers are famous for marry with the quality and care demanded of schools by anxious parents?

"It was the central question I asked myself, indeed asked the financial backers, when we began to discuss the possibility of working together two years ago. My own view is very clear, and I'm convinced it's the view of Englefield too, that the nature of the financial return depends absolutely on the quality of the education provision that is offered. If we get the education wrong, if we're judged by parents to be solely interested in financial returns, to be hiking up fees unrealistically or cutting back on resources and not investing in the fabric or accommodation of the schools, then we simply won't get the parents through the door.

"Now, you're absolutely right, private equity companies do want a return. But I have no problem with the profit motive because it's always seemed to me that the drive to make a profit concentrates attention in a way that no other arrangement does and what concentrates attention even more is the need to avoid making a loss. So for me it's a virtuous circle rather than a tension. I believe that schools have got to be run as businesses but if they are run solely as businesses they will fail. It's a conundrum but I think that does sum it up."

Proud to be called a traditionalist in his approach to education, Mr Woodhead's schools will be aimed firmly at the mid-market, with fees roughly in the £6,000 to £9,000 a year bracket. The product on offer will be grammar school-style education but the schools will not be academic hothouses trying to compete with the Winchesters and Westminsters of this world. "Parents are enthusiastic about the notion of a school that cuts through the educational twaddle that characterises so much of the current debate; that focuses on the teaching of literacy; that is dedicated to a broad and balanced curriculum and that gives a proper place to arts, sport and culture.

"The way we make money at the same time is intelligent investment in the schools. I mean resources and accommodation but even more importantly the quality of the teachers. Investing in the teachers is an investment that will produce the financial returns that my investors naturally want."

Mr Woodhead says he has spoken to teachers at three Cognita schools so far and that the staffs of these establishments have been reassured that his approach to teaching is what they want to hear as well.

But elsewhere in the education establishment, you can hear the knives being sharpened; any slip-up and Mr Woodhead will have a dozen daggers plunged into his back by gleeful enemies. Few people in their late fifties would lay their reputation on the line in this way and jump into a high-risk venture at the same time.

"I am 58. Readers of The Independent may not think I have much of a reputation to protect, but I think I do. I would not have put educational money where my mouth is, and my personal money, if I didn't think it was educationally and commercially the right thing to do. I don't get anxious about many things, I've been through quite a lot. My attitude to things is pretty fatalistic actually."

Mr Woodhead is himself a product of the state system and was the first in his family to go to university. A grammar school education in the 1960s helped cement his very definite views on teaching. "I have no embarrassment about the notion of tradition. I tend to agree with the Prince of Wales that you don't need to reinvent education for the 21st century."

Operationally, Mr Woodhead is planning to let the teachers, including the head, get on with teaching while much of the time consuming bureaucracy involved in running a school will be centralised across the group, keeping costs down.

There will be a Cognita curriculum but individual schools will not be expected to stick to it rigidly. Where a school has a particular expertise in teaching, say reading, the other Cognita schools will be encouraged to import the knowledge and techniques into their own classes, while parents will be given as much access as possible to teaching and administrative staff to air their views.

The Cognita business plan is not to weigh in and use its financial muscle to undercut its rivals on fees. Instead it envisages steadily raising fees in line with the schools' academic achievements but not to increase them as the first business proposition.

"That would be completely the wrong thing to do because the message it sends confirms every parental anxiety that every private equity firm is interested solely in screwing every possible penny out of the customer."

Mr Woodhead is a great believer in collective strength and the benefits to be drawn from being part of a strong organisation, something the state seems to be losing sight of, he believes.

"I think competition should encourage the state to raise its game. As I say, parents don't necessarily want to spend £5,000 to £10,000 a year if they can avoid it. The state has all the advantages in terms of what the consumer wants, so the state ought to be satisfying those desires. If it's not, it should be asking itself very hard why it's not."

School Report

Age: 58

Pay: Undisclosed, as yet

Education: Selsdon Primary in south London and Wallington grammar school, Surrey. Read English at Bristol University.

Career: Started out at as a teacher in three state schools then spent five years involved in teacher training at Oxford University. For nine years he worked for local education authorities in Shropshire, Devon and Cornwall as a chief inspector and deputy chief education officer. He became chief executive of the National Curriculum Council, the predecessor to the Qualification and Curriculum Authority, and then chief executive of the Schools Curriculum and Assessment Authority and then Chief Inspector of Schools in 1994 to 2000. "So there's a hell of a lot to answer for," he says.

Personal: Single and lives halfway up a mountain in Snowdonia.