In the UK, there has been increasing pressure on head teachers in primary and secondary schools to turn their schools into "academies". The idea is that schools are currently bound by too many regulations and red tape, lacking the competitive independence that they need to bring out the best in their students. Education for students would be improved if schools had more resources to improve local conditions where seen fit.
There are incentives to join in. For one, there is strong ministerial backing very keen to make education reform a big success of the coalition government. For another, schools have access to better funding with fewer strings attached: schools can use this to improve local pay or make upgrades.
But all things come at a cost. Where is the money coming from? Well, the money is meant to replace money that would otherwise go to local councils to provide x number of services for schools. Instead of funding a council so it could provide a set number of services to its local schools, this funding is being cut from councils and redirected to schools. Some critics have said it is like robbing Peter to pay Paul. So there is no new funding, but redirecting funding from one body to the other.
The attractions are several. It is supported by the coalition government, but an idea originally introduced by Labour - so there has been cross-party support. Plus, everyone likes slogans such as "more responsibility to schools" and "greater autonomy" etc.
There are several problems - and I believe these problems outweigh the initial attractions. Academies are bad economics. Consider the fact a school will require insurance, legal advice, etc. These services have a cost - call it x. A school would receive services up to cost x from a council. A school that turns into an academy receives the same amount - x - to pay for the same services. The first impression is that academy funding is a sleight of hand: the school receives x to cover services whether or not it is an academy.
The argument for becoming an academy is a combination of greater control and greater resources. The school still receives x, but not the school receives this funding directly. (Previously, the cost of services was paid directly to a local council so a school received this funding indirectly.) So a school may think it is earning more because last year it received y but post-academy status it receives y + x -- however, the direct payment of x merely covers the cost of support formerly paid to its council for the same support. Whether or not a particular school spending x (rather than the council spending x) will get services for less than before is the big claim of the government. But it's difficult to see how this would work.
If we each individually purchase some service it will cost more than if we were to join forces and combine resources and/or buy in bulk. Coming together can lead to greater efficiencies in the distribution of labour and improved services. Academies turn this on its head. Each school no longer benefits from a council's shared support team, but now must pay for services individually perhaps through the private sector. Working individually, academies are more likely to have to pay more for the same services than before.
There are further issues. An academy lacks the full cover of resources and support a council might offer. What if there is a legal or insurance-related problem at school? What if schools go into debt? Previously, a council could offer support and assistance, but not anymore. Not only might academy status lead to schools paying more for the services they currently enjoy, but academy status may even then make it more likely we will see schools close. Progress? Hardly.
So why would government push for these reforms? One idea is that they want to break the unions. Academies will be able to offer local pay conditions and so erode national bargaining. Teachers will find it more difficult to go on strike. Paradoxically, the government's argument for academies (e.g., greater responsibility) includes the fact that academics may be more easily controlled.
The push for academies is driven by ideology, not economics. It is about creating an ideological vision about education that runs counter to the goals of self-sufficiency, competition, and good economics. Time will tell.
UPDATE: I'm delighted to see that this post has been picked up by The Guardian's cribsheet.