Will England’s ‘free schools’, the first of which have just opened, be run for profit? No, says deputy prime minister Nick Clegg. Not yet, says education minister Michael Gove. Absolutely definitely and ASAP is a more reliable answer if the characters gathering around English schools are anything to go by.

Lord Harris: ex-Tory treasurer, Harris Foundation chairman

Take Lord Harris of Peckham, major sponsor and chairman of his eponymous Harris Federation, which hopes to grow its chain of primary and secondary Academies from its current 13 to 25 or more.

Lord (Phil) Harris, a long-time Conservative donor and former party treasurer, built his £285m personal fortune on carpets. His House of Lords biography notes his shareholdings in ailing Carpetright, his directorship at Arsenal FC, his Scottish woodlands and his philanthropy. (No mention that the Harris Queensway company he sold in 1988 crashed two years later with £200m debts, putting 4,000 people out of work.)

Lord Fink: Tory treasurer, ARK trustee

Another hugely wealth, Tory-funding philanthropist who has got his teeth into the £35 billion English schools pie is Stanley Fink. Dubbed the ‘Godfather’ of the hedge fund industry, he’s the Tory party’s co-treasurer who has reportedly given £1.9 million to his party.

Elevated to the Lords this past January — sponsored by Lord Harris — Lord Fink is on the board of ARK Schools Limited, formerly known as ARK Academies and currently celebrating “a fifth year of improved GCSE performances”.

In an article subtitled, “There is little difference between an academies group and a local authority apart from a lack of accountability”, the Guardian’s Fiona Millar noted: “the Ark brand is less about individual school autonomy than a strong corporate vision”.

ARK, which operates in sub-Saharan Africa, the US, India and Eastern Europe, as well as English schools, boasts that it has raised more than £150 million and leveraged more than £250 million in government funding since it was founded by philanthropic hedge fund managers in 2002.

According to his House of Lords register of interests Lord Fink is a trustee and director of the “Global Board” for Absolute Return For Kids (ARK), a director of ARK Masters Advisers (stockbrokers), and ARK UK Programme Limited and ARK Academies Project Limited.

Other directors of ARK enterprises are Labour peer Lord Myners, City of London hedge fund managers, investment bankers, a fund-of-funds manager and ex-employees of Goldman Sachs, JP Morgan and insurance giant AIG.

ARK Schools managing director Lucy Heller, who has just this month opened two ‘free schools’, hails from Rupert Murdoch’s empire where she was managing director of News International subsidiary TSL Education. (Murdoch, by the way, is preparing to expand his education business, and the minister who has had breakfast, lunch and dinner with Rupert Murdoch more frequently than any other is . . . Michael Gove, a former News International employee).

A quick study of ARK Schools’ 2010 accounts shows they spent nothing on staff development across eight schools but £285,000 in ‘educational consultant’ fees and that the schools’ budget was underspent by 7.5% - resulting in an operational surplus of £1.8 million (in 2009 the operational surplus was £3.6 million).

Lord Fink and other ARK Schools Directors have a policy to invest any surplus cash. ARK holds up to 60 per cent of its funds in the Cayman Islands (managed by a Cayman Islands ARK company AMML – which is advised by ARK Masters Advisers UK Ltd ) and, if ARK Schools becomes insolvent, parent member ARK has to pay only £10 towards liabilities and debts.

Another longstanding ARK board member, Nat Wei, rewarded with a peerage within days of the coalition being formed, stood down from ARK to become David Cameron’s ‘Big Society’ policy tsar, as this would have posed an obvious conflict of interest.

Lord Wei left ARK to become Cameron's Big Society tsar

At the same time Lord Wei stepped down from the board of the Shaftesbury Partnership that was not only planning to bid to win contracts for Cameron’s summer camps for kids but also had plans to gain control of another large slice of David Cameron’s education pie.

Using the ‘New Schools Fund’ brand, the Shaftesbury partnership aims to open two free schools next year, with ambitions to control the funding that goes with tens of thousands of school places.

The board of Lord Wei’s Shaftesbury partnership includes alumni of Goldman Sachs, McKinsey & Co and a global investments manager. (Two Conservative Party policy writers have recently moved on).

Another peer who has jumped on the new education train, Labour Lord Bhatia – resigned from the board of E-Act (formerly known as EduTrust) after being accused of financial mismanagement of £70,000 of the education funds under E-Act’s control.

E-Act is ploughing on regardless with ambitions to run 250 E-Act branded schools within the next five years.

Controlling the new E-Act brand is a board filled with people whose first love would appear to be something other than education — a director of Harvey Nash (global recruitment and IT), a vice president of Visa Europe (25 million transactions processed today) and a former consultant at ‘Big Four’ accountant Ernst & Young.

E-Act director Sheila Scales helped established the National Curriculum and school performance tables. Free schools are exempt from all that stuff.

At CfBT Education Trust (turnover £100m-plus) the trustees are people less readily associated with education than with Mammon — including former employees of KPMG, Citibank, a Vice President of Pitney Bowes and various management consultants.

CfBT Education Trust’s 2010 accounts state that they spent £61 million on consultancy services – over 30 per cent more than the £45.8 million they spent on teaching.

The Department of Education’s ‘non-executive board’ (part of David Cameron’s ‘drive to improve governance across Whitehall’) comprises one head teacher and three men of Mammon: executive vice-chairman of Rothschild, Anthony Salz, who helped Rupert Murdoch form BSkyB, Theodore Agnew, non-executive director of Jubilee Managing Agency Ltd, who donated more than £134,000 in less than two years to the Conservative party (according to the Electoral Commission), and John Nash, non-executive partner of Sovereign Capital, the man who helped bankroll, Conservative Health Minister, Andrew Lansley’s election campaign. John Nash’s private Care UK makes 96 per cent of its money from the NHS.

The reforms permit the new education pioneers to underspend on education every year and invest the proceeds offshore.

Many of those engaged in transforming the way that education is ‘delivered’ portray themselves as philanthropists, but it’s a strange sort of philanthropy that takes public money to promote the interests and ideology of big corporations and multi-millionaires.

When David Cameron’s flagship education reforms are combined the result is: financial players on the board of the Department of Education that awards funding to financial players on the boards of new education enterprises — with support in the boardroom from members of the House of Lords.

Is this:

Or:

b) ‘conflict of interest’ and ‘privatisation by stealth’?

Discuss.