Private Investment in State Places by James Leggett, Research Director

Private Investment in State Places by James Leggett, Research Director featured image
11 October 2016

Yesterday I was invited to speak on a panel at the Education Investor forum on Property in Education. My panel session focused on the trials and tribulations of planning and building. The final panel session however was on ‘Tackling the state school capacity crisis’, although Mike Green, Director of Capital at the EFA preferred to call it a state school capacity opportunity.

Throughout the session the emphasis was on the primary school sector, with a note towards the secondary sector, but one thought crossed my mind. The birth rate has now peaked therefore, the current projections we hold suggest the number of 3-10 year olds are more likely to decline rather than increase, so why are we still focused on increasing the number of primary school places? Shouldn’t we be focusing our efforts on the secondary sector? I would suggest there is a case for ‘outsourcing’ the now short term challenge of primary places to allow for a concerted effort on secondary places.

As both Mike Green and Mike Coleman, Strategic Head of Education Property for the Borough of Hackney stated, it takes a significant amount of time for the public sector to do anything. The time scales involved with buying or building real estate and developing a school are typically beyond 3-5 years, by which time the problem will have passed. However, within this time scale the capacity crisis will start to hit the secondary sector. The private sector is typically able to turn projects of this nature around in a significantly shorter timescale, not-withstanding the challenges of building on a school site, but is there not an argument for asking the private sector to absorb the extra spaces?

This is all easy to say, but there is unlikely to be a return to funded places with this in mind as we have heard in the news recently. Similarly, opening more Grammar Schools is unlikely to significantly increase capacity as most will be comprehensive/academy converters. The real problem is two-fold:

  1. Government does not control academies and free schools. They therefore cannot ask them to offer more capacity without supporting their growth through funding initiatives. As many are operated by private consortiums, this means funding the private sector.
  2. The term of parliament is 5 years. In 4 years time, the ‘capacity opportunity’ might not be Mrs May’s problem.

The ‘Free School’ initiative was designed to boost secondary school places, but this has not been adopted as rapidly as was hoped primarily due to the challenges of finding real estate, which is ironically the same problem that councils face. However, private providers (independent fee-charging schools) are often able to increase their capacity at a far greater rate. Is there not now, more than ever, an opportunity to support them in picking up the pieces?

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