Private Schools: Stricter Requirements but No Profit Ban

The Government is planning to tighten the terms for independent schools on several points. An ongoing investigation is now also to propose how state subsidies can be frozen for poorly managed independent schools and how unsuitable individuals can be prevented from owning or influencing an independent school.

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Private Schools: Stricter Requirements but No Profit Ban
Photo: Henrik Montgomery/TT

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The investigator Joakim Stymne was given the task last year to propose restrictions, but not a total ban, on profit distribution for private school owners. For example, profit distribution should not be allowed when there are quality deficiencies or when the private school receives state subsidies to improve quality.

Now the task is being expanded, or "the comprehensive renovation of the private school sector continues", as the government puts it. However, it is still not relevant to ban profit-driven private school owners.

"Lower surplus"

We're doing this because we see extensive deficiencies in schools today, and a lot that are extra large in private schools. It concerns not least when companies have acquired schools that were for sale for some reason. But in the end, you can't just focus on the form of operation if the business is of very high quality. If you can with good operations streamline and show a lower surplus, then we don't see that as a problem, says Education Minister Johan Pehrson (L).

The stricter requirement on private school owners is about the fact that today only the principal – for example, the subsidiary in a company responsible for school operations – is liable to follow the Education Act and other regulations and can be held accountable if deficiencies are discovered. But even an unsuitable parent company should be able to be stopped, according to the government.

"See the whole picture"

The investigation is also given the additional task of proposing that the School Inspectorate should be able to act against an entire private school company if the schools in one of the subsidiaries have recurring deficiencies.

The idea is that the School Inspectorate should be able to see the whole picture in a company to a much greater extent, and in that way be able to close down a company's all schools if they see that there are deficiencies in the management of all schools, says Education Minister Lotta Edholm.

Other issues the investigator will review include that private schools that do not meet the requirements should not only be denied profit distribution but also the right to state subsidies. This is something the School Inspectorate has previously called for.

The School Inspectorate has also pointed out that private schools can be bought up by companies that would not have been approved if they had applied to start a private school. This issue is also being raised in the investigation.

The investigation into profits in schools will, among other things, propose:

Profit stop in various situations, for example, if the principal is required to rectify deficiencies in school operations.

Extended owner and management review and stricter sanctions.

According to the additional directives, the investigation will also propose:

Stop for unsuitable owners, possibility to act against an entire company in case of deficiencies, requirement for new approval when operations change or move, and prohibition on state subsidies in case of mismanagement.

A partial report will be submitted in March and the final report in December 2025.

Source: Ministry of Education

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