At colleges, increases were posted over last year in the number of institutions that outsourced bookstore operations, HVAC maintenance, instructional-equipment repair, laundry, payroll preparation, printing, security of academic and residential buildings, and transportation. Much like their school district counterparts, fewer colleges contracted out custodial and maintenance services of both academic and residential buildings.

CHART 4
Top 5 reasons why school districts do not use privatized services:

Would threaten jobs of loyal employees

35.50%

Union contracts make it too difficult

17.00%

“If they can make a profit, we ought to be able to do it for less”

16.30%

Public opposition

13.20%

Too expensive

10.40%

What the Future Holds

Both school districts and colleges expect to further increase their use of privatized services over the next few years, and for a number of reasons. More than 42% of school districts report they will turn to outsourcing select non-educational services (compared to 31% last year); approximately 54% of colleges expect their use of contract services to increase in the near future (compared to 52.5% last year).

CHART 5
Percentage of school districts using selected contract (privatized)services, 1997:

Administrative

3.50%

Computer servicing

19.30%

Custodial

3.50%

Food service

21.10%

Grounds maintenance

8.80%

HVAC maintenance

19.30%

Instructional-equipment repair

7.00%

Laundry

7.00%

Maintenance

1.80%

Payroll preparation

5.30%

Printing

15.80%

Security

10.50%

Transportation (busing)

40.40%

Vending

14.00%

The primary reasons why educational institutions expect to increase the use of privatized services over the next few years are fairly similar at both the school and university level—except for the most important reason. School districts will primarily turn to privatized services to save dollars, followed by an attempt to improve operations. Colleges, on the other hand, will turn to outside contractors to improve operations, followed by the quest to save dollars.

Other reasons institutions are investigating privatization of non-educational services include (in order of importance) a contractor’s ability to do a better job, save management time, provide greater accountability and the ability of a contractor to provide professional management.

School districts, more than colleges, are turning to contract services in an attempt to balance shrinking operating budgets and burgeoning enrollments, searching for alternative ways to provide necessary services. Colleges are seeing an increase in specialized services and equipment as the driving force behind their desire to outsource. At both levels, institutions comment that privatization on non-educational services allows them to focus more on their core mission—to educate students.

The principal reason school districts and colleges reject contract services is because it would threaten the jobs of loyal employees; another is because it costs too much. Just as many institutions turn to privatization in an attempt to save money, a number have discovered that it often proves to be more expensive. Other reasons educational institutions reject contract services include the problems that are created with union contracts and quality of service issues.

This article is excerpted with permission from the September 1997 issue of American School & University magazine