Turning Private Schools in Cooperative? Better Turning Them in Social Enterprises

The Ministry of Education is planning to reign in the infamous commercialization of private education in the country.

A bill is being drafted in order to force all private education institutions to become cooperatives and currently discussions are on-going between the Ministry and representatives of PABSON, the umbrella organization for private schools.

It is certainly positive that the Government of Nepal wants to do something to fix the working modalities of private education, putting an end to a status of semi-anarchy but at the same time we need to also be fair to those private learning institutions who have always been playing according to the rules, paying taxes and allocating the scholarships quota as per national policy.

Certainly there are many private schools that have been taken undue advantage of the current transitional phase faced by the country characterized by a lack of policy implementation and oversight.

While it is positive that the doors are open for dialogue with PABSON, it is also important not to hurry up with forceful impositions that might negatively impact the national education system of which private schools are key constituents

Probably this is the core matter that generates different positions and understanding about the role of private schools: these are still considered as “outsiders” despite the fact that a huge number of students, especially in  urban areas, are enrolled there. There is an overall lack of policy coordination between what is wrongly perceived as public and private sector schools.

There is also a vast potential for private schools to discover and meet essential social obligations inherent to their mission.

No doubt, private players are also part of broader non state actors group but, understandably enough, there has always been a rigid division between for profit and not for profit, the later identified only with civil society organizations.

Nowadays it does not make any sense to continue with this silos approach:  there is much more than white or black choices.

It is high time to change perceptions and consider the private for profit and private not for profit as part of a continuum.

Private schools should better adjust to the current national scenario, be ready to get a cut in their profits in order to make their institutions “public” in the sense of being accessible also to those less well off. The fee structures could also be diversified in order to reach potential new students from less affluent families.

Private schools could be made more inclusive by offering special packages to deserving children from low income families who could avail of low interest loans or special payment arrangements. Here commercial banks could smell some business opportunities by meeting the needs of those at the bottom of the pyramid.

The current provisions related to scholarships should not only be enforced but expanded to reach more students and also to cover out of  pocket expenses like uniforms, school books and other fees.

Moreover their tie-ups with local communities could be greatly enhanced with joint outreach and community initiatives.

In terms of legal status the Government, rather than pushing for a forced solution of the problem, should put on the negotiation table an array of options for private schools.

After all who would guarantee that, once all private schools are turned into cooperatives, they won’t follow the example of their financial “sisters”, cooperatives only in  name?

Instead private schools could be persuaded to become public interest companies, a new legal form that offers much more flexibility to the entrepreneur than the classic NGO. You keep creating economic value while ensuring a stronger social dimension.

It is all about acknowledging the social dimension of private sector. It is often called social economy. You play and thrive by the rules of the market economy but you are driven by a strong social mission.

Incentives might nudge private schools towards change: for example a better taxation regime could induce more private schools to assume  more social dimensions.

The owners of private schools should be ensured about continuing to enjoy a profit out of the overall revenue.

An adequate timeframe for private schools to “sign into” the new system should be granted for those schools ready to change.

Private schools willing to stick with the current legal status will be allowed to operate by paying higher taxes, including a mandatory provision to allocate an amount proportional to the revenue generated for CSR activities.

In short the state, in strategic human development areas like education and health, should acknowledge and facilitate social businesses rather than ordinary profit making ventures.

There is much scope to improve and broaden the legal provisions of the public interest company in  Nepal and unlock the untapped potential of a social economy.

In the UK social businesses are thriving thanks to huge social entrepreneurship made by individuals who look at their profit while also delivering products and services for the society at large. The government is making it easier for this new generation of entrepreneurs to step in and work at the community level.

Private schools, together with other private economic agents could work with the government to make the social economy ecosystem stronger, easier to navigate and more attractive.

Imagine children from disadvantages families able to enjoy the same learning standards of middle and upper classes families.

It is hard to find a better return on investment. It is going to be more and possibly better learning opportunities for disadvantaged children. The society at large will benefit from a new generation of citizens rising up together, not divided by caste or wealth but united by their learning.