One of the largest free school operators in Sweden is to shut down, raising further doubts about government hopes of letting private equity companies run UK schools for profit.
Three of the schools run by JB Education in Sweden are to close and the other 19 are to be sold after private equity group Axcel, the parent company which bought them in 2008, decided too many losses were being recorded.
Education Secretary Michael Gove has previously indicated that he would like to see private companies allowed to run schools for profit and the Conservatives are considering including such an option in their 2015 manifesto.
However, teaching unions said the Swedish experience demonstrated how inappropriate it is to allow schools to be run for profit.
Christine Blowers, General Secretary of the National Union of Teachers, said: “A private company’s first loyalty is to shareholders, not to pupils or parents. Inevitably, if they decide a school isn’t profitable it will either cut corners or, in the worst case scenario, close it down. This is absolutely not the right way to be running state education.”
Chris Keates, General Secretary of the NASUWT, was equally vocal: “No one should be surprised or shocked at equity providers pulling the plug on free schools in Sweden.
“This is not the first time this has happened and won't be the last. The education system in the US is littered with similar examples. This is the inevitable consequence of handing over schools and assets to private providers and leaving them to the mercy of the market.
”What should be causing concern is not the selling off of schools in Sweden, but the fact that despite the evidence of the high risks and the absence of any evidence of educational benefit, this Coalition Government has embarked on the same reckless experiment with schools in England, gambling with the future of children and young people and taxpayers' money.“
Mr Gove would like to see hundreds of free schools set up but only a handful have opened so far. Some sections of the Conservative Party believe that allowing businesses to make a profit out of state schools will give the initiative the impetus it needs.
Earlier this year Bright Blue, a modernising Conservative pressure group, published a book urging market forces to be introduced to school and cited the Swedish experience as one that should be followed.