Schools granted right to profit by selling expertise

State schools will be allowed to make profits for the first time by turning themselves into companies and selling their teaching expertise.

State schools will be allowed to make profits for the first time by turning themselves into companies and selling their teaching expertise.

The scheme – part of Tony Blair's flagship legislation to transform secondary school standards, which will be announced today – will allow any state school to form itself into a company limited by guarantee.

Specialist and other successful schools would then be free to sell their expertise in areas such as languages, information technology, maths or any other area of the curriculum to neighbours who may be struggling with the subject. They could provide services to independent schools if asked.

The deal could involve lending teachers or selling teaching material produced at schools that are rated highly by Ofsted, the Government's education standards watchdog.

Profits made would be ploughed back into the school to buy more books and equipment or to hire more teaching staff.

Schools will also be able to form clusters with other schools to put in bids to buy books and equipment in bulk from educational suppliers, thereby lowering costs.

The scheme is based on a model already running at Thomas Telford School, a city technology college in the Midlands that last year became the first comprehensive school where all of the students taking GCSEs achieved five goodpasses.

It is marketing online maths and technology teaching packs to other schools – netting itself more than £1m in the process.

At present only the small number of city technology colleges are allowed by law to bid to provide services to other schools. Today's legislation will open the door to any other school to follow suit.

A senior aide in the Department for Education and Skills said yesterday: "We want to see best practice in good schools spread across other schools more effectively. This will be a very effective way of raising standards across all schools and encouraging more schools to develop partnerships."

Ministers are planning to ensure that every school has access to a bursar to help with the administrative side of turning itself into a company, which would involve the appointment of a board of directors. Becoming a company limited by guarantee will allow the schools to operate like charities and to avoid falling into debt.

Today's legislation follows a White Paper on education published in September, aimed at keeping the subject at the top of the Government's priorities for its second term. It is expected to confirm plans to allow more private-sector involvement in the running of schools, which will include allowing them to sponsor a network of city academies to be set up in deprived inner-city areas.

Controversial plans to allow an expansion in the number of faith-based schools will also proceed, although local school organisation committees will be told that proposals should be agreed only if the schools allow non-faith pupils to be admitted or develop class-based links with a school from another faith.

In addition, teaching assistants will be permitted to have extra responsibilities such as taking the register.

Estelle Morris, speaking at the Local Government Association education conference in Swindon yesterday, said that she wanted "legislation that will allow teachers to make sensible decisions about how to deploy staff".