Company faces £400,000 fine for missing targets

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The first private company to have taken over the running of an entire education authority's schools is facing a hefty fine – after presiding over the biggest drop in primary standards in the country.

Cambridge Education Associates (CEA), which has been managing schools in Islington, north London, for a year, is to be fined a total of £400,000 for failing to reach targets for test and exam results. Primary performance tables published today show Islington's aggregate score for maths, English and science tests for 11-year-olds has slumped by eight points – the biggest drop in the country.

As a result, it faces its second fine in the last three months after losing £300,000 of its management fee earlier this summer for disappointing GCSE results. The combined £400,000 fine is understood to represent about half of its management fee.

Vincent McDonnell, director of school services in Islington for CEA, said: "This is a temporary setback. Islington schools are working very hard to raise standards of achievement for all pupils and we are confident that 2002 will see significant changes."

One of the reasons for this year's slide in standards is that one school, Hanover primary, had its test results declared null and void after allegations of cheating. The head has since resigned.

James Kempson, the Liberal Democrat chairman of Islington's education committee, said: "What happened at Hanover was an issue when you look at the results. There were many children there who historically would have reached the standard and made an impact on the figures but nobody is trying to look at that as an excuse.

"The targets were set by the old [Labour-controlled] and failing administration before we took over and it just shows another of the things they couldn't do was set targets."

Some private companies decided against bidding for the Islington contract because they thought the targets were too demanding.

Doug McAvoy, general secretary of the National Union of Teachers, said: "It just shows that bringing in private companies and setting targets is not in itself an answer."

The schools will be better funded as a result of the fines. The money will be spent on booster classes for GCSE pupils, laptops for teachers and schools will get new whiteboards linked to the internet.

CEA had signed up to targets of raising the percentage of pupils gaining at least five A* to C grade passes at GCSE from 26.5 per cent to 35 per cent. The figure only went up to 27.7 per cent.

Islington's overall aggregate score for the 11-year-old tests – calculated by adding together the percentage of pupils reaching the required standards in maths, English and science – went down from 216.9 to 208.8.

Meanwhile, the Government announced yesterday that spending per pupil in state schools in England would increase next year. Estelle Morris, the Secretary of State for Education and Skills, said it would go up by £130 per child after inflation as a result of a £1.3bn increase in the funds being given to local education authorities next year.