For the purpose of this brief thought experiment, a comprehensive school will be defined as one which is non-selective and caters for a variety of children (aged 11–16) from the local area, irrespective of their ability or background. I am also going to assume that the UK government has recently introduced a system of education vouchers, redirecting public funds from schools to parents. Therefore, each parent now receives a voucher for £5,000 per annum per child, to be spent at their school of choice. Schools can be public or private and additional parental contributions are encouraged.

The traditional state school will continue to cost £5,000 per annum and so no additional fees are required.  However entrepreneurs are quick to recognise that there is increasing pupil and parental dissatisfaction with these schools and market research suggests that dissatisfied parents will be prepared to pay more to guarantee a better quality of education.  Chains of private schools charging £7,000 p.a per child therefore emerge to cater for this growing market, with parents required to make an additional contribution of £2,000.

Following the development of these schools, entrepreneurs soon identify another emerging gap in the market.  Building upon the increasing popularity of ‘compassionate consumerism’ and the ongoing success of ‘FairTrade’ products, a chain of for profit ‘FairEducation’ schools are established.  These schools charge £7,500 with parents required to make an additional contribution of £2,500 p.a.  However, while £2,000 is used to cover the costs of educating the parent’s child, the additional £500 is used to help subsidise a free school place for a local child from a low income family.  If a free school place costs an additional £2,000, then for every four children whose parents are paying full fees, one child from a low income family will receive a free school place.  Therefore in a school of 500 children, there will be 100 children whose parents pay no additional fees.  This new chain of ‘FairEducation’ schools can therefore market themselves as combining ‘Excellence in Education with Social Justice in the Community’, guaranteeing that 20% of its intake will be from low income families from the local area.  This will be its competitive advantage.

Apart from generating income through school fees, the ‘FairEducation’ school will also look to attract income from its former pupils.  The relationship between pupil and school will not be expected to end on the day the pupil graduates.  Instead, the strategic focus will be on developing a long term relationship (hopefully lifelong) with each individual pupil.  Former pupils will then be encouraged to give something back to the school, by way of annual subscriptions, special donations or by teaching at the school to help share their knowledge and experience.

As soon as the school begins to view each pupil as a potential source of future revenue, then this will help to focus the school on delivering an Extraordinary Educational Experience (EEE), which the pupil will hopefully never forget.  The school may therefore decide to introduce nursery, primary and post 16 classes to enable the school to have a much greater chance of providing this life changing experience.  Of course, it will not only be the former pupils themselves who may want to give something back to the school.  Their parents may also provide another potential source of future revenue.  Again, this will only become a possibility if the school not only meets, but exceeds parental expectations.

The ‘FairEducation’ school may also decide to purchase (or develop a strategic alliance) with a recruitment company, thereby guaranteeing employment for each pupil when their schooling is completed.  To assist in this process ‘FairEducation’ schools will look to develop strategic partnerships with ‘FairTrade’ companies who will be invited to assist with work experience and employment opportunities and extra-curricula activities (in the future FairTrade companies may decide only to work with FairEducation schools).

Recognising that not all of its pupils will be inclined towards academic success, the ‘FairEducation’ school will also develop a variety of capabilities to ensure that its non-academic pupils are also satisfied with their schooling experience.  The ‘FairEducation’ school will therefore also aim to excel in competitive sports, the arts and entrepreneurship.

This brief experiment highlights two important points.  First, whatever method is used to finance education (through taxation or schools fees), the majority of parents will pay for it (either indirectly or directly), and there will always be a minority who receive education for free.  Second, it also shows how wealthy parents, through the payment of school fees, can enable children from low income families to gain access to much better educational opportunities than those currently on offer.   At the local state school, children from low income families receive ‘free’ education, of poor quality, valued at £5,000.  However, at the for-profit ‘FairEducation’ school, the same pupils now receive ‘free’ education, of an excellent quality, valued at £7,000!

An edited version of this article was originally published in Economic Affairs, March 2007