Businesses shun education zones

EDUCATION ACTION zones, to be backed by the Prime Minister today as "testbeds of radical ideas", have raised less than a third of the pounds 19m they need from private companies.

Tony Blair will announce the creation of another 15 zones, despite zone leaders' insistence that only a handful of the first 25 zones have succeeded in raising the private funds required. Each has received pounds 750,000 from the taxpayer but must raise pounds 250,000 from business. A central pool of private funds on which hard-pressed zones could draw, promised in April, has not materialised.

So far the zones have raised just pounds 5m, most of it "in kind" - as the rules allow - rather than in cash.

The Education Department said last night that it had only expected them to raise pounds 6m this school year, which ends in the summer. "So we're ahead of the game," a spokeswoman said.

But ministers have recognised the difficulties some zones are experiencing by appointing Sir Cyril Taylor, architect of the last government's city technology colleges, to help them raise private investment.

Ian Harrison, director of education at Newham and secretary of the local education authorities' action zone network, said although Newham had secured plenty of private funding, only about half a dozen of the first 25 zones had strong backing from the private sector. "In some cases it isn't obvious why large firms should invest in zones. The private sector interest suggests there may not be enough private money to sustain more. The Government should be looking at a more diverse model," Mr Harrison said.

Mark Pattison, director of education at Blackburn and the network's chairman, said: "Most zones are able to raise private support `in kind'. Cash support is not essential but it makes a great deal of difference if you have some money you can use for any purpose. Some of the `in-kind' support is a bit peripheral." He said some zones were receiving commitments for one year only.

Yet the zones appear to be enthusiastic and optimistic. David Bell, director of education in Newcastle, said his zone had about pounds 200,000, almost all of it "in kind", for the first year. "We remain pretty upbeat but the fund-raising has been harder than we thought. We have a very good education business partnership here and companies are already putting a lot of time and effort into education," he said.

Nottingham zone, which started this month, has private funding for the first three months of this year.

Barnsley, which began in September, has both cash and equipment but is still trying to raise money from potential supporters.

Mr Blair is expected to announce today that he wants to make it easier for parents, teachers and community groups to run zones, in response to criticism that the existing 25 are dominated by local authorities and are "not radical enough".

Margaret Murray, head of the learning and skills group at the Confederation of British Industry, said: "Businesses shouldn't be asked for cash for the technology block or the basics of education, which should be funded by the taxpayer. They should be backing imaginative schemes, like summer schools, with measurable objectives."