US firm in line to run schools for profit

AN AMERICAN company which runs schools for profit is holding discussions with the Government about taking over failing schools in Britain.

Leaders of the Edison Project have also held exploratory talks with officials at the Department for Education about how a profit-making company might run schools in education action zones which will aim to raise standards in poor areas.

David Blunkett, the Secretary of State for Education, has said that no company will be able to run an action zone for profit but he hopes businesses will be involved.

Benno C Schmidt, Edison's chairman and a former Yale president, in London last night to deliver a lecture at the Institute of Economic Affairs, described the attitude of officials to the idea as "on the whole, pragmatic".

He said: "The Government has asked us about the sort of profits we would want to make. I have been clear that we have no problem with the idea that we should not make excessive and unreasonable profit.

"We would be very happy to take part in a system where there were ceilings and caps on levels of profitability but we can't be locked into an inflexible budget. They have not said that making a profit would rule us out."

He pointed out that his company had provided much- needed investment in the 25 schools which it runs in eight American states, on contract to school districts, the equivalent of local education authorities.

Standards were rising and the project expected a commercial return by using public money more efficiently, he added. Fifteen more schools will be set up from the autumn.

Edison has had half a dozen meetings with government officials and more are scheduled. It has expressed interest in two bids for action zones from Tameside and Surrey.

Mr Schmidt said the Government had also raised the prospect of Edison taking over failing schools. "Officials have suggested this might well be legal, possibly working with local education authorities."

They wanted to be sure, he added, that the interests of children would not be sacrificed.

Doug McAvoy, general secretary of the National Union of Teachers, said: "I hope that officials at the Department for Education have kept their ministers informed. We have a clear commitment from the Secretary of State that organisations will not be allowed to run schools for profit in this country.

"If taxpayers' cash has been set aside for the education of children it should not be made available for commercial profit."

A Department for Education and Employment spokesman said: "No commitments have been made to any organisation. But we are always interested in new ideas from public and private sector organisations."