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News - 2 June 2012

Profit making in schools

The shadow education secretary, Stephen Twigg, has accused the Education Secretary of introducing profit-making into state schools in England and risks attracting firms looking for a "quick buck."

Mr Twigg is to tell a conference on educational standards in London this week that
"It risks the abuse of public resources at a time when it is even more important that we ensure that every penny of taxpayers' money is spent wisely."

He bases his theory on a recent visit to Sweden, the model for free schools (state-funded schools set up by charities or community groups) where profit making is allowed. He adds:
"One of the biggest (concerns) is that it allows companies to run a free school for a period of time and then sell it on at a profit."

This is a direct attack on Michael Gove following his evidence at the Leveson Inquiry when asked about the prospect of free schools being run for profit. He said:
"There are some of my colleagues in the coalition who are very sceptical of the benefits of profit. I have an open mind."

Peter Ham, Chief Auditor and Head of Schools and Charities at ABDS says:
“At present, free schools cannot be run for profit - but the trusts that run them can buy management services from profit-making firms.”

A Department for Education spokeswoman said: "This government has no plans to allow free schools or academies to make profit.

"Any income earned by the charitable trust must be reinvested to improve and advance education for pupils."

If you need any help and advice on Schools and or Charities, contact ABDS to discuss how we can help.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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