Funding struggle: Can Liberia's controversial privately run schools pilot continue?

WASHINGTON — Three weeks before Liberia’s general election, the future of a controversial pilot outsourcing more than 200 public schools to private operators appears uncertain as the country’s president steps up fundraising efforts to secure the $4.6 million needed to keep the program running.

Some funders are also said to be questioning the program after an independent evaluation released earlier this month showed mixed results for the public-private partnership’s first year. While researchers of the randomized control trial reported impressive learning gains among students, they also raised concerns about the program’s cost-effectiveness and its potential to negatively impact non-participating schools in the country.

Liberia’s outgoing President Ellen Johnson Sirleaf delivered her final address to world leaders during the United Nations General Assembly last week, during which she described the country as “a post-conflict success story.” While referencing ongoing work to “transform” the country’s education system, she made no mention of her government’s most talked about and controversial project: the Partnership Schools for Liberia, or PSL.

Under the PSL, a selection of primary schools in Liberia have been contracted out to eight private education providers — including for-profit companies and NGOs — to see if they can improve standards in an education system crippled by civil war. The PPP has just entered its second year and has doubled in size, but views on the program remain polarized. Experimenting with privatizing education provision has provoked fierce opposition from teachers’ unions and civil society organizations around the world, turning it into a touchstone in the global debate over education reform.

This month, Sirleaf and her Education Minister George Werner have been busy fundraising for year two of the program, including in New York, Washington, D.C., and California. But education experts are raising eyebrows at the fact that fundraising efforts are taking place so late, with the school year already under way.

Now, Devex has uncovered doubts about whether Liberia’s government is able to raise the funds needed to keep the program running.

An ambitious experiment

Launched in September 2016 with political backing from Sirleaf and Werner — and financial support from philanthropists — the PSL was presented as a bold experiment intended to transform Liberia’s education system, which had been left decimated by years of civil war, followed by the outbreak of Ebola.

Under the program, an initial cohort of 93 primary schools were contracted out to eight private providers — two Liberian, and six international, varying in size and resources — most of whom were selected through a public procurement process. The schools remain free to attend.

PSL schools receive $50 per pupil from the government — the same amount spent on all public schools — the majority of which is spent on teachers who stay on the government’s payroll. In the first year, a pooled donor fund of $1.2 million, provided mainly by UBS Optimus Foundation, dispensed an additional $50 per student to six of the PSL providers. Some providers also supplemented the funds from their own resources.

Earlier this year, Werner announced that the program was being scaled up to include an additional 100 or so schools, increasing the costs for the second year to $4.6 million.

While the program’s supporters say the minister should be applauded for daring to try something radical in the face of a broken education system, as American journalist Nicholas Kristof wrote in The New York Times in July, critics including teachers’ unions in Liberia and abroad, and a former U.N. special rapporteur on education, have opposed it, in large part because of concerns about the privatization of education in developing countries.

The independent evaluation of PSL released this month, led by the Center for Global Development, did little to settle the debate. It found that the first year of the program had achieved significant improvements in student learning, teacher attendance, and parent and student satisfaction, but raised concerns about the program’s cost-effectiveness and its potential to negatively impact non-participating schools in the country, as Devex reported at the time.

Is there enough money to continue the program?

The Liberian president and education minister are now looking to raise the $4.6 million needed to fund the second year of the program.

Although the school year has already started, operators are yet to receive any money, and the Ministry of Education has said it is still trying to raise the funds. A spokesperson told Devex by email that: “We are currently in conversation with a number of donors … We have received a number of commitments thus far.”

President Sirleaf and Minister Werner have been actively fundraising for the PSL in the United States, including attending an education funders breakfast organized by Forbes in New York last week.

But it is late, given Werner’s previous comments that he hoped to “understand by early June whether it is feasible to secure the necessary funding to implement this plan for Year 2.”

Paul Skidmore, head of Rising Academies — a for-profit private school chain in Sierra Leone, which is running 29 schools in year two of the PSL — confirmed to Devex that his organization has been told not to expect payment until October under the new contract. He added that he has not been actively involved in fundraising discussions, and so is “not sure whether the money is there or not.”

However, Skidmore also said that such funding uncertainty is not unusual in an “experimental program” like PSL, which he described as trying to move faster than typical development programs, and within a risky country context. “It’s fair to say that anybody who wants to be involved in PSL needs to have a fairly high risk appetite,” he said, adding that he is “confident” the funding will be forthcoming.

However, a number of other education experts with ties to the program, who asked to remain anonymous for professional reasons, have said the Ministry of Education — and Social Finance, a U.K. nonprofit hired to help facilitate with financing the PSL — are having a hard time raising the money. Donors have become disillusioned with the project partly due to the enduring controversy it has attracted from both national and international media, they said.

Uncertainty about the outcome of the upcoming election — taking place on October 10 — is also likely to be giving donors pause for thought, although several education experts told Devex that any incoming government would probably continue the PSL under pressure from foreign donors who support the project and from its largest operators.

But they also said that an underfunded PSL would risk driving out smaller and local operators and this would in turn raise questions about the equity and sustainability of education PPPs such as the PSL. “We could see an eat what you can kill model,” in which if an operator can raise the money then they can run the schools, according to Justin Sandefur, who is leading the RCT evaluation for the Center for Global Development.  It would also undermine Werner’s commitment to ensuring that no single operator could get “monopoly rights” over the country’s primary schools, as outlined in a January blog post.

In search of new funders

The increased funding envelope for year two is the result of a larger number of schools, higher per pupil subsidies for some schools, the introduction of a school feeding program, and other administrative costs, a Ministry of Education spokesperson told Devex.

Most of the money for the first year was raised by PSL’s then fund manager, Ark — a U.K.-based education charity — which secured the majority of the funds from UBS Optimus Foundation. However, Ark’s role has now been taken over by Social Finance. Sources say the decision was made after Ark staff publicly aired their concerns about Minister Werner’s plans to scale up the pilot before the RCT results had been published. Susannah Hares, international director at Ark, told Devex the organization is still playing an advisory role and maintains a good relationship with the minister.

UBS Optimus Foundation told Devex it could not comment on whether it will continue to support the program “for confidentiality reasons.” 

A number of Sirleaf and Werner’s current fundraising efforts in the U.S. are being conducted in collaboration with the PSL’s biggest and best connected operator, Bridge International Academies, which has an impressive list of foundations and philanthropists already on its books, including Mark Zuckerberg, Bill Gates, Mulago Foundation, Vitol Foundation, and Omidyar Network. However, it is also the most controversial of the operators, having been embroiled in disputes with teachers’ unions and governments over its schools in Kenya and Uganda.

Unsurprisingly, Liberia’s Ministry of Education is trying to tap the Bridge network for funds and will be joined by some of the operator’s supporters on a number of fundraising visits in California this week. The Vitol Foundation, a Bridge supporter, already appears interested: a spokesperson for the Dutch oil company’s foundation told Devex they are “exploring a grant with Social Finance for a pooled fund to support all operators in Year 2.”

But Bridge’s funders have themselves faced criticism for supporting the company and some critics are questioning the wisdom of the ministry in aligning itself so closely with it.

“I would have thought that the government would want to avoid such a continued close association with Bridge,” said David Archer, head of programme development at ActionAid — which has been a vocal critic of the PSL — pointing to criticisms of Bridge in the RCT evaluation, to which it has responded.

Both Bridge and the Ministry of Education pointed out that other PSL operators are also involved in fundraising. A Bridge spokesperson said that: “As with all PSL partners, we are now in the process of fundraising for year two of Partnership Schools for Liberia.”

Tighter rules and more oversight

As Social Finance, the PSL’s new fund manager, struggles to attract new donors, its Development Director Toby Eccles told Devex it is working to implement a number of reforms that could help address some of the issues raised by PSL’s critics, and make the project more attractive to funders.

The organization had been brought in to “put in place the robust frameworks, structures, and processes” needed to enable support from larger-scale donors, Eccles said. That means making sure that all operators have the same contract, whereas in year one, two operators — Bridge and Stella Maris — had separate MOUs with the government; ensuring that all correspondence between the government and providers is available to funders for inspection; and that all funding is channeled through the PSL program rather than through individual providers, Eccles said.

These measures will help “reduce the risk, perceived or otherwise, of private capture, particularly following the political transition post election,” he said.

The recent decision by the Ministry of Education not to extend the RCT evaluation to the 100 new schools brought into the program this year could also be putting off would-be donors. The decision has raised eyebrows considering one of the main objectives of the PSL was to “conduct a rigorous external evaluation to measure the performance,” according to ministry documents. Werner has frequently touted the value of the RCT, even as recently as last week.

Sandefur said the ministry’s decision was “disappointing,” and could compromise its ability to monitor and keep the operators in check.

“In a public-private partnership like PSL, it's vital for a ministry contracting out education provision to private firms to conduct some independent oversight of what those firms are doing on the ground,” he said.

But Sandefur conceded that “there are other ways to do monitoring and evaluation,” and a Ministry of Education spokesperson told Devex it would be “implementing additional learning assessments to supplement the insights from the RCT.”

Long-term prospects

Even if PSL survives its second year, all parties agree that the only way it will work in the long run is if it can scale up and operators can take advantage of economies of scale to drive down costs. The ministry has a plan for this scale-up and told Devex that it anticipates that funding from both “donors and aid agencies,” as well as impact investors, will support this process under a payment-by-results structure. The long-term vision is for the government of Liberia to take over the program and cover the $100 per pupil spent by 2020. In a recent article, Minister Werner said he believes the ministry and the PSL operators are on track to meet that goal.

The World Bank is an obvious choice as a potential scale-up partner. To date it has not directly funded the PSL, although its private sector arm — the International Finance Corporation — has invested $13.5 million in the program’s largest operator, Bridge.

Peter Darvas, the World Bank’s education technical team lead for Liberia, said he hoped scalable lessons could be drawn from the PSL pilot that could benefit the entire sector — but said he thought it unlikely the bank would fund the project.

“The World Bank focuses on systemic results and the best gains from the PSL will be to draw education lessons into the systemic reform and have an impact in that way,” he said.

“I see the PSL as a legitimate and credible effort … but at the same time I don’t see how the PSL could hope to achieve systemic results in two to three years time,” Darvas said, citing, in part, the high costs, small scale impact, and the fact that target schools, at least for year one, were not reaching the most marginalized children.

According to Alain Guy Tanefo, CEO of Omega Schools, one of the PSL operators, institutional donors including the European Union, UNICEF, World Bank, and USAID would like to fund PSL, but they are reluctant to get involved due to the controversy surrounding it.

“I’m convinced they are all interested … but I don’t see how they will associate themselves with a project which is embedded in so much controversy,” he said.

Update, Sep. 28: This story was updated to include additional comments; to clarify the privately-run nature of PSL schools; and to note that the U.N. now has a new special rapporteur on education.

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