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This is the message being sent by the government to schools: if you don't improve, then you must close.
This is a tough issue, because there are a large number of factors well outside the control of schools that affect their achievements. There's also a problem with what the government values from a school — concentrating on 5 "good" GSCEs is to focus too narrowly on what schools do for their pupils and the communities to which they (pupils and schools) belong.
Notwithstanding all of these points, I have argued here before (1, 2) that choice should be a fundamental part of the education system. With choice comes exit, i.e. parents choosing to send their children to a different school. And with exit inevitably comes poor schools. Although the government should be more sophisticated in the measures it uses to determine success or otherwise, in some cases it will be right that schools which don't attract pupils should "close": this is a consequence of choice in the education system, and will go some way to ensuring schools that exist are of a standard that can meet the expectations of pupils, parents, the school staff, and the government.