For-profit education is something that really doesn’t exist in Australia… yet. But in many other countries around the world it has become a normal part of education and there are now many companies providing a range of educational products.

One of these, for example, offers a “platinum-style” education costing up to $US100,000 or so, all the way down to a cheaper “basic model”. This company aims to cater for five million students by 2024 and may offer its shares to the public to fund further expansion.

The idea behind many of these companies is to fill a gap, providing cut price education relative to the established private schools in countries such as the United Kingdom. But these groups are also now considering heading our way.

Do we have for-profit education?

Currently the majority of Australian schools are not-for-profit. Being non-commercial is a pre-requisite for government funding, whether they are independent, Catholic or government. They are all required to put any profit they make back into the school.

So even the so-called “totemic schools” ultimately plough money back into the provision of extra facilities, services and scholarships for students. Certainly no single or group of individuals directly gains financial advantage from involvement in such schools.

The for-profit institutions that do exist in Australia do not operate in the primary or secondary school sectors. In Australia we have an expectation that government is primarily responsible for the core provision of school education. This is outlined in each state’s Education Act.

In addition to legislation, culturally we have an expectation that government will be the primary provider of school education.

Public culture

This expectation works, to a point, as our nation has the infrastructure to do this. Interestingly some countries where private providers have grown most rapidly have been in Eastern Europe, parts of Asia and Latin America – where suitable infrastructure often does not exist.

There are those who suggest that we, as a nation, should rethink the orthodoxy that certain services such as education must be delivered exclusively by the public sector or on a not-for-profit basis. This is a complex discussion and one that will need to consider cultural, educational, economic and even philosophical issues.

Are we talking about private, stand-alone institutions or are we talking about the government handing over the provision of public education to private providers? Perhaps it is timely that we examine again what we want in providing an education for our citizens.

Shift in thinking

If we see education as reflecting the societal goals of the host culture, then a certain schooling product is envisaged. If the goal is one of profit, where a subset of the citizenry is advantaged, then a different paradigm will exist.

At present, there is a move towards greater school and community partnerships, and indeed this is a federal government imperative. If the $5 billion dollar education funding boost estimated by the Gonski review is right and the government is unwilling or unable to provide this, then one response might be to outsource provision to private providers.

The recent Review of Funding for Schooling estimates $1.4 billion was provided to schools from private sources including donations in 2009. While education is still coming to terms with the involvement of not-for–profits in the delivery of education, we are challenged to ensure that schools and teachers remain at the heart of reform and innovation.

Profit from disadvantage

The involvement of for-profit organisations is that much more problematic. Even with the current system involving the not-for-profits, there is a tendency towards ad hoc, non-systemic roll-outs.

If this recent article in The Australian newspaper is anything to go by, we need no more evidence of the inefficiency of many non-systemic programs due to ineffective, non-sustainable and inappropriate processes, particularly in the area of Indigenous education and community support.

While lack of due diligence on the part of the grant providers regarding the applicants was cited as a reason for the outcomes in this case, if credentials are based purely on economic return, then some of the offshore providers may prove very attractive.

The thought that some might make money out of our most disadvantaged communities though, as has been suggested, seems particularly galling.

The best and the worst

Whether there is room here for increased involvement with profit-focused organisations raises a number of issues. One would have to ask why they are needed. What niche is there to fill in Australia? It is difficult to see here exactly for what problem “private, for-profit public (or independent) schools” are designed to be the answer.

Organisations that operate in the area of accreditation for schools around the world talk of for-profit schools being “some of the best and some of the worst”. Considering that the bulk of a school’s expenses in Australia arise from teacher salaries, one can only imagine that savings might come from cutting corners in this area. Certainly, experiences in South East Asia, where the for-profit schools are becoming more common, would suggest this is so.

Given that staff quality has been identified as the single most important factor over which schools have some control this may influence educational outcomes for children.

Similarly the regulation of crucial areas such as curriculum and assessment regimes can be problematic, if private operators favour certain approaches over national or local contexts.

What next?

The area of for-profit education requires careful consideration.

Families compelled by law to send their children to school would have every right to feel very wary of having them passed by government into the care of a contracted profit-making individual, corporation or community group not of the parents’ own choosing.

Either way, a discussion with full disclosure involving all stakeholder motives and a clear decision-making and quality regulation process is essential. When it is the lives of our young people at stake, we need to be that much more vigilant; else we may see another ABC childcare type debacle happening at other levels of education.

This is a discussion we need to have.