Hackney council stripped of right to run schools

A troubled London borough was stripped of the power to run its schools yesterday when they were handed to a trust created by the Government.

Labour-controlled Hackney has agreed to hand its education services to a non-profit-making, independent education trust, the first body of its kind, Stephen Timms, the School Standards minister, announced. The National Union of Teachers (NUT) described the decision as a "body blow" to the commercial sector, because Nord Anglia, the profit-making company that has run some Hackney school services since 1999, will not have its contract renewed next July.

The decision was based on the recommendations of a team commissioned by the council and the Department for Education and Skills in August to examine the future of schooling in Hackney. Its report said the decision had been determined by "one overriding issue: the fundamental financial weakness of Hackney council".

Private contractors would have been considered if the council had been better able to manage its finances, the report said. Hackney could be confronted by a £21m deficit by the end of the financial year, making it theoretically bankrupt, according to a recent Audit Commission report that uncovered "deep-rooted" problems in the council's ability to run itself.

Chris Woodhead, the former chief inspector of schools, condemned Hackney as the "worst education authority" in Britain just before his departure last year. He called on the Government to "rescue the education of some of Britain's most deprived children" from its "malign influence".

The new body, Hackney Education Trust, will be responsible for all education services in the borough under a five-year contract with the council that will start next August. The creation of the trust was recommended by a team led by Anthea Millett, the former chief executive of the Teacher Training Agency, which examined the future of the borough's schools.

The team concluded that the current "partial solution", which saw Nord Anglia take over school improvement and ethnic-minority services in 1999 while leaving the remaining education provision under Hackney's control, had "weakened attempts to get a coherent and cohesive strategic direction across education services as a whole".

Complete privatisation of the education service – as in Islington – was dismissed as inappropriate for Hackney because of doubts that the borough was capable of managing the contract.

A recent Ofsted report on Nord Anglia's involvement in Hackney included sharp criticisms. But the company has also had notable successes, including setting up the team led by headteacher Dame Marie Stubbs that turned round St George's Roman Catholic Comprehensive in Maida Vale, west London, the school where the headteacher, Philip Lawrence, was stabbed to death.

The Department for Education and Skills denied that the decision to hand control to a trust was a snub to Nord Anglia. Mr Timms said: "There is a considerable amount of work required in a very short timescale to establish the trust, but we are confident that Hackney are committed to developing a high-quality education service and will do all that is necessary to implement the arrangements."

Doug McAvoy, general secretary of the NUT, welcomed the move. "Schools in Hackney have been left without adequate back-up as a result of the poor management of services by the authority.

"I hope this announcement marks the end of the Government's flirtation with profit- making companies."