This article explores the ways in which the neo-liberal impetus toward the privatization of state schooling signalled in the Education Reform Act 1988 (ERA) has become embedded in the English school system. Four main points are made. First, that ERA itself was of huge strategic rather than substantive importance as far as privatization is concerned. Second, by tracing the lineage of privatization from ERA onwards a "ratchet" effect of small and incremental policy moves can be identified, which have disseminated, embedded and naturalized privatization within public sector provision. Third, that while privatization has been taken up and taken much further by New Labour than it had been by the Conservatives there are differences between the two sets of governments in the role of privatization in education policy and the role of the state. Fourth, the participation of private providers in the planning and delivery of state services has put the private sector at the very heart of policy. At points the article draws upon interviews conducted with private sector providers. (Contains 1 figure and 1 note.)