F rom the outside, Turin Grove, in a rundown area of Enfield, north London, looks much like any other city comprehensive in England. But as you walk the corridors, you see the notices pinned to the walls. Be there. in time for your next lesson. Walk and talk sensibly. Hold the door open. Be helpful! And each notice carries a logo: EdisonLearning.

Edison, a profit-making US company that was set up in 1992 and opened in the UK a decade later, is nearing the end of a three-year, 1m contract to turn round Turin Grove. With more than 40% of its pupils eligible for free meals and 62% not speaking English as their first language, the school has long faced problems. In 2003 (when it was called Salisbury school), Ofsted found serious weaknesses. Though inspectors two years later found significant improvement, they noted the continuation of very low literacy and numeracy standards. Martin Cocks, chair of the governors, feared the vulnerable and fragile school would slip back.

We needed somebody very experienced and capable to take it over, he says. With agreement from Enfield council, he put the management of the school out for tender, and Edison won. The company would appoint and pay the salaries of a head and two deputies, and it promised to improve exam results, cut truancy and improve behaviour.

Cocks, a retired BT manager, is cautiously optimistic about the outcomes. The proportion of pupils achieving five A-C grades at GCSE (including English and maths) rose from 13%, before Edison took over, to 27% last summer, but that is still below the 30% the government wants all schools to achieve. We shan’t really know how successful it’s been until we get exam results at the end of this school year, says Cocks. But the school has moved forward.

Edison is a very rare example of a profit-making company taking day-to-day charge of a school. Even in the independent fee-charging sector, most schools are run by charitable trusts, as are academies in the state sector.

But nobody should be under any illusions. Private corporations are already closely involved with state schools, and often make big profits from them. Several openly aspire to run their own schools and talk eagerly of economies of scale if they can take charge of dozens, even hundreds. It’s already happening in the US and Sweden, and there isn’t much to stop it happening here.

There’s no need for new legislation, says Stephen Ball, a professor at London University’s Institute of Education and author of Education Plc, a study of school privatisation. Everything is in place. Turin Grove illustrates the point: though the law prohibits corporations taking charge, there is nothing to stop governors inviting them to operate state schools.

Privatisation is about to take a giant step forward. The coalition government has announced plans – first proposed in opposition by the Conservatives, but apparently accepted in their entirety by the Liberal Democrats – for academies and free schools, started by parents, teachers and voluntary groups and receiving, for each pupil recruited, what would be spent on that child in a state school. The vision the Conservatives sold to the public during the election campaign was of parents and public-spirited individuals running schools as they run baby and toddler groups, Scout groups and Rotary clubs. But it won’t be like that. DIY schools will need expert management help, and private companies are the obvious candidates to provide it.

Running a school is quite complicated, says Anders Hultin, chief executive of Global Management Education Systems (Gems), a company based in the United Arab Emirates that already runs 12 UK private schools, and aspires to run state-financed schools. It can’t just be handed over to amateurs. We are exploring opportunities right now, supporting groups of parents. That’s a natural starting point.

Gems is not alone. Edison, the largest provider of state-funded private schools in the US, envisages running several academies. Kunskapsskolan, which runs 30 state-funded schools in Sweden, plans to sponsor two new academies, in Richmond, south London, and Suffolk. The latter company is new to the British market but others are, as Ball puts it, embedded in the heart and sinews of state education. In a market worth close to 2bn, they provide a host of services to schools such as personnel and financial management, and computer support. They often provide similar services to other parts of the public sector. They also carry out school inspections, provide careers advice for school leavers, supply teachers who cover for staff illness, and run government projects such as the National Literacy Strategy and the National Centre for Excellence in the Teaching of Mathematics. Though profit-making companies are barred from being trustees of state-funded schools such as academies, several are exploring the option of forming not-for-profit trusts, allowing them to run schools directly, and then to make money by selling services to the trusts.

Over the past decade, several companies have progressed to running the education arms of local authorities on contract. For example, Serco – the company that runs London’s traffic signals and the Docklands Light Railway – operates educational services in Bradford, Walsall and, to a more limited extent, Stoke-on-Trent.

VT Group – which started as a defence contractor, building and operating ships for the Royal Navy – runs education in Surrey and the London borough of Waltham Forest. Would we want to run schools? Only where the local community wants us to, and where it could work, but emphatically, yes, says Marcus Watson, a former British Aerospace manager who is now VT’s managing director. We work with more than 50 local authorities, so running schools is just an extension of what we do. But we’d be the delivery arm; we can’t set the vision and direction. That has to come from local people.

Though politicians talk of a thousand educational flowers blooming, one or two schools won’t be enough for most private providers. With for-profit companies, you inevitably get consolidation, says Ball. More and more schools will be run by fewer and fewer companies. When school inspections were privatised by the Tories in the early 1990s, 120 providers entered the market. Now, Ofsted awards contracts to just three companies.

Several companies looking to run schools emphasise the importance of scale – Watson thinks VT running 1,000 schools is not unrealistic. Among the not-for-profit academy providers, chains are already emerging: the Harris Federation, started by Lord Harris of Peckham, has 20 schools, while the Ark charity, backed by City hedge fund entrepreneurs, has eight. There are obvious benefits in sharing back-office functions and, if they are close geographically, schools can share staff for specialist subjects such as languages.

But school chains are also likely to associate themselves with particular approaches to teaching and learning. Private companies can codify their experience and spread best practice, says Hultin. The American charter schools – one of the Tories’ models for their free school schemes – have had mixed results. The most comprehensive study, from Stanford University in California, concluded that pupils in only 17% of charter schools made more progress than their equivalents attending regular public schools, and in 37% they made less. But the advocates of private involvement in state education argue the failures mostly didn’t involve big organisations.

Where a school is part of a chain or group, says Paul Lincoln, Edison’s UK managing director, it does better because there is more system and scale involved.Edison already markets its own curriculum to primary schools, based not on conventional subjects but on thinking skills, speaking and listening, and personal and social competencies. In terms of curriculum, timetable and organisation, says Lincoln, a former chief education officer for Essex and a teacher for 20 years, schools follow a fairly standard model which hasn’t changed much over the years. I want to think through what a school would be like if student needs were really met.

Large chains with distinctive approaches also allow effective marketing. Companies envisage establishing strong brands so that families seek out a VT or Gems school in the same way as they look for a Tesco or Sainsbury’s.

A brand has value, says Watson. It helps people make an informed choice. If a school is supported by a robust brand, that’s a very positive thing for parents.

Ball, however, fears that privately run teaching and learning programmes will ultimately have a stultifying effect. Companies will want packages that are cheap and easy to teach, and require low skills in teachers. After all, teachers’ salaries are the biggest single cost in education and, to make profits, they will want to keep costs down. At the moment, you are getting interesting areas of innovation from the private sector. But it’s the loss-leader approach. They’re still building their brands and creating goodwill.

Hostility to the private sector remains deeply embedded among teachers and most education academics. Profit-making companies, critics say, will pollute teaching and learning – many privately sponsored academies have large numbers taking vocational subjects – and will run schools in the interests of shareholders, not children. Supporters of private provision reply that, in that case, companies won’t get the contracts, whether from local councils, academy trusts or parents’ groups. Private providers stand or fall by their capacity to get better results – usually specified in considerable detail in the contracts – for less money. We won’t make profits unless we offer value, says Watson.

But evidence from Sweden, another model for the Tories, is far from encouraging. Sweden has slipped down international league tables for pupil performance since state-funded free schools, which now total more than 1,000, were introduced by a centre-right government in the 1990s. The schools tend to keep out the more difficult children and have therefore increased social segregation. Though they record better test scores than state-controlled schools, their pupils don’t do better in post-compulsory education, suggesting, critics say, that free schools concentrate narrowly on measurable outcomes.

They aren’t newly built schools, Ball says. They are often in empty schools or disused factories. They often don’t have laboratories, playgrounds or sports facilities. It’s all very low cost. A lot of the teaching is done by IT software.

Nor does anybody have a clear answer to what happens if companies running schools go bankrupt. Politicians romanticise the market, says Ball. But it is messy. Crashes and failures are what it’s about.

VT’s Watson says: You can’t have schools ceasing to operate overnight. But you can reduce the risk of that happening if you bring in large companies. Small firms pose a much higher risk.

As several companies point out, there is nothing new in people making money from state education. Profit-making companies build schools, clean them and cook the pupils’ meals, while publishers achieve margins of up to 70% on providing textbooks and computer packages. Through the academies programme, the private sector has already taken a large stake in schools and, while profits aren’t allowed, there is no bar to high salaries and expenses.

Blurring the boundaries

Increasingly, the boundaries between state and private are blurred, not least because the people heading educational services companies are often, like Lincoln, former local authority officers or civil servants.

Once, a profit-making school was unthinkable, and one that received state funds even more so. But for private capital, it is a win-win situation: a guaranteed income stream from the government and the likelihood of state rescue if everything goes wrong. And the last 30 years suggest that what private capital wants, it usually gets in the end.

Ball describes privatisation as a ratchet process. With each new piece of legislation, each new regulation or procedure, each new category of school, new possibilities emerge. Things that were unthinkable become possible, and they then become obvious and necessary. I think we are about to see another ratchet up.