Published Online: June 28, 2007

Phila. to Keep Outside School Managers One More Year

The Philadelphia school district will allow six outside groups to continue operating some of the city’s lowest-performing schools for one more year, a decision that was immediately questioned in light of studies showing that the five-year, $107 million investment has not delivered overall academic results any better than the district’s own efforts.

The June 27 decision by Philadelphia’s School Reform Commission reverberated in the city, where critics said it was driven by politics and money, as well as elsewhere in the nation, where experts who have been closely monitoring Philadelphia’s experiment with outside management were divided on exactly what lessons it is yielding for educators.

The commission, an appointed panel that has been running the 173,000-student district since a 2001 state takeover, decided to offer one-year contract extensions to the providers—Edison Schools and Victory Schools, two New York City-based private companies; Temple University and the University of Pennsylvania, both in Philadelphia; and two community groups, Universal Companies and Foundations Inc. Their five-year contracts expire on June 30, and a decision had to be made about the 38 schools they would run in 2007-08.

The extensions require all the providers to offer their services for $500 more per student than what regular Philadelphia schools receive. That means a cut in pay for the four non-university providers, which had been paid $750 extra per child, and an increase for the two universities, which had been receiving $450 extra per student. Whether all six would accept new contracts on those terms was an open question.

“How do we do more with less? That is the biggest issue,” said J. Roberto Gutierrez, a spokesman for Edison Schools Inc., which is the largest outside provider, with 20 Philadelphia campuses.

Margaret Harrington, the chief operating officer of Victory Schools, said her company would accept the one-year contract. “We want to maintain our presence in Philadelphia,” she said.

Larger Strategy

The School Reform Commission rejected one commissioner’s proposal to keep under outside management 24 schools that have shown academic progress, and return the others to district management.

The panel also announced it would issue a request for proposals to groups interested in turning around 60-plus schools—including 17 now under outside management—that are in “corrective action two.” That stage, defined by the federal No Child Left Behind Act, makes them subject to tough measures such as reconstitution, conversion to charter status, or outside management because they have failed to make sufficient progress for five years.

Commission President James E. Nevels said the coming school year represents an opportunity to forge an academic-improvement plan that will involve many more struggling schools than those now under private management.

“A historic thing happened for children today,” he said in an interview after the panel’s June 27 meeting. “There was a determination by the commission that we would have the will to address the most serious problem in urban education: the historically underperforming schools in a district … and not just in a piecemeal manner, [but] looking at it over a year and addressing it in a uniform way.”

Greg Wade, the president of the Home & School Council, which represents parent groups at most of the district’s schools, said the commission’s decision reflects more about politics and money than it does about sound educational choices. He pointed to the district’s money troubles, which forced millions of dollars in cuts from its 2007-08 budget, and reminders by state legislators that $25 million in state aid is contingent on retaining the multiple-provider model.

“I don’t know where he is coming from that this is a great day for children,” said Mr. Wade. “This is strictly political.”

The district should allow the outside groups to keep running the schools that are progressing well, he said, and take back those that are languishing.

Ignoring Research?

Some who opposed the contract extensions expressed frustration that the decision seemed to fly in the face of several recent studies. Those reports found that while some schools managed by outside groups had made good academic strides, overall they had progressed at no better than the district’s average rate of improvement, and in fact lagged behind a subset of district-run schools that received intensive support. One study that analyzed state test scores found that schools under outside management performed better than district-run schools, however. ("Panel: Phila. District Should Question Private Management," March 1, 2007, and "Study Finds Outside Managers Raised State Scores in Phila.," April 18, 2007.)

Jolley Bruce Christman, the founder of Research For Action, which co-wrote one of the studies with the RAND Corp., said she was surprised the district chose to keep all the schools under outside management when research suggested that only some had benefited from that approach, and when it had been successful helping struggling schools on its own.

“I think the commission weighed the research in light of political and funding considerations,” she said.

The reaction to the commission’s contract extensions renewed debate about how to interpret the results of the Philadephia story so far.

Jeanne Allen, the president of the Washington-based Center for Education Reform, which advocates more choice in the school marketplace, said the district’s overall improvement in recent years owes much to the multiple-provider model.

“It’s critical that these providers, all the different kinds, stay involved,” she said. “They’ve had everything to do with making all the Philadelphia schools better. All the boats rose, and that’s exactly what you see from competition.”

But Frederick M. Hess, the director of education policy studies at the American Enterprise Institute, a Washington-based think tank that also favors market-based policy, questioned whether Philadelphia’s work with outside providers offers a true glimpse of how competition can work. Because the providers’ contracts imposed set payment schedules and limits on their incentives for doing well, he said, no true assessment can be made about whether the multiple-provider model works. And extending that arrangement for one year, he said, won’t clarify that question.

A truer test, he said, would have been to take away from the providers schools that are not improving, and award them to providers whose schools are doing well. That would weed out the weaker managers by depleting their portfolios, Mr. Hess said, and bolster the stronger ones by rewarding good performance.

Henry M. Levin, the director of the National Center for the Study of Privatization in Education at Teachers College, Columbia University, said Philadelphia’s experience builds on his growing conviction, from watching such experiments nationally, that using outside groups to manage schools isn’t likely to deliver strong overall results.

“They haven’t yet shown that they can produce revolutionary changes,” he said. “I’m disappointed. I’m an economist. I thought, ‘Gee, you get profit-making firms in there; they want to generate growth; you can create incentives—they are going to deliver something.’ But that is just not what happened.”

Given what he’s seen, Mr. Levin said, he would consider using an outside management group to solve “a persistent problem with a particular school,” but not with large groups of schools. “They have been successful in taking a few chaotic schools and getting them to function,” he said of such organizations. But that can pose a problem for a profit-making company, since districts tend to take over again once the school is stabilized, he said.

The debate about the role outside providers can play in district improvement might never be resolved by analyzing money spent and test scores delivered, said Michael J. Petrilli, the vice president for national programs and policy at the Thomas B. Fordham Foundation, a Washington-based think tank that supports charter schools and choice.

“It comes down to, do you believe in a system that has this mixed model, where you bring in resources and capacity from the outside? I don’t know if you are ever going to prove with definitive evidence that one model is better than another model,” he said. “But the fact that achievement is going up in Philadelphia is a good thing. Something is going right in Philly.”

Vol. 26

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