MPs say big firms are not the answer for failing schools

Ministers would be "naive" to expect big business to pay for a string of new inner-city academies and they should not regard private companies as a panacea for raising school standards, MPs warned yesterday.

Ministers would be "naive" to expect big business to pay for a string of new inner-city academies and they should not regard private companies as a panacea for raising school standards, MPs warned yesterday.

The influential Education Select Committee fired a warning shot urging the Government not to rely too heavily on contractors to turn round troubled local authorities.

A report from the committee called on ministers to "reconsider seriously their funding options for city academies". Under plans for the inner-city colleges proposed by David Blunkett, the Secretary of State for Education, it is recommended that businesses, churches and voluntary groups be invited to make substantial investments and to help run the institutions in partnership with the Government.

But the MPs warned that the Conservatives' experience of setting up city technology colleges showed private companies would not foot the bill.

They also called on ministers to produce a flying squad of high-quality education officials from the public sector who could step in to help under-performing local authorities.

Barry Sheerman, the Labour MP for Huddersfield and the chairman of the select committee, said: "Some of the evidence we picked up is that it's very easy to believe there's an enormous private sector out there just waiting - champing at the bit - to put tens of millions of pounds into the education system."

He added: "There are parts of this country where there are very few large manufacturers with the capacity to do that. We are moving to a country where there are small and medium-sized industries and the big ICIs or BP Amocos are employing fewer people in fewer parts of the country.

"You can be a little bit naive if you think there are vast amounts of private capital out there ready to flow in. The experience of the previous administration was a cautionary tale."

The report follows a major investigation into the potential role of private contractors in helping the state system.

The inquiry was sparked by the high-profile takeover of education services in the London boroughs of Hackney and Islington, and the decision by Surrey County Council to put out to tender the running of King's Manor School in Guildford.

Private consultants were later sent into 10 other local authorities, which led to education services in Leeds being put out to tender.

MPs yesterday welcomed the Government's pragmatic approach to using private contractors to raise standards. But they warned that the ultimate responsibility for local services had to remain in the hands of elected councillors.

The report urged ministers to "twin" under-performing local councils with more successful authorities and warned that present tendering regulations prevented successful authorities from intervening to help their neighbours.

The Department for Education and Employment defended its plans for the city academies. A spokesman insisted that organisations were already preparing expressions of interest.

Estelle Morris, the School Standards minister, welcomed the select committee's report, and insisted local education authorities still had overall responsibility.

She said: "We have not lost sight of the need for local accountability where outsourcing occurs - LEAs retain responsibility for the monitoring of both the contract and delivery of service to schools."