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In 2017 Tooley announced plans to open a low cost private primary school in Durham, England. The school opened in 2018. An Ofsted report in 2019 rated the school as "Good".

Tooley's work has also explored the role of government in education from philosophical and other theoretical perspectives. This has resulted in academic articles challenging the work of philosophers Harry Brighouse and Adam Swift, and in the major book E. G. West: economic liberalism and the role of government in education (Continuum Library of Educational Thought, 2008).

Tooley is best known for his work on low cost private education. He began this work in 2000, having discovered for himself the existence of low cost private schools in the slums of Hyderabad while doing consultancy for the International Finance Corporation. A major research programme was subsequently undertaken between 2003 and 2005, funded by the John Templeton Foundation, exploring the nature and existence of private schools for the poor in India, Ghana, Nigeria, Kenya and China, and comparing public and private provision for the poor. This research is reported in a range of books and publications, including The Beautiful Tree: a personal journey into how the world's poorest people are educating themselves (Penguin, New Delhi, and Cato Institute, 2009). His work has also been profiled in documentaries for the BBC and PBS: for the latter it was featured alongside the work of Nobel Laureate Muhammad Yunus and Hernando de Soto Polar.

Tooley holds a PhD from the Institute of Education, University of London, an MSc from the Science Policy Research Unit, University of Sussex, and first class BSc honours in Logic and Mathematics, also from the University of Sussex. He began his career as a mathematics teacher in Zimbabwe (1993 to 1996), before moving to the National Foundation for Educational Research in England in 1998. He held short-term appointments at Simon Fraser University, Canada, and the University of the Western Cape, South Africa, while completing his PhD. His first post-doctoral position was with the University of Oxford's Department of Educational Studies, under Professor Richard Pring. From Oxford he moved to the University of Manchester in 1995; at the same time he also created the Education and Training Unit at the Institute of Economic Affairs in London. He took up his current chair at Newcastle University in July 1998. He is a member of the academic advisory councils for several think-tanks, including Reform, Civitas, Institute of Economic Affairs, Taxpayers' Alliance and Globalisation Institute. He is an Adjunct Scholar at the Cato Institute, and a thought-leader for Schoolventures.

Tooley's family moved to Bristol where he was educated at Kingsfield School, Kingswood, under the tutelage of William Haxworth, and where he was also a contemporary of Richard Scudamore, presently Chief Executive of the Premier League. In fact they both appeared in the 1977 School production of Joe Orton's The Erpingham Camp. The school was burnt to the ground during his time there.

James Nicholas Tooley (born July 1959, in Southampton, England) is a professor of educational entrepreneurship and of education policy at the University of Buckingham. Before that, he was professor at the University of Newcastle upon Tyne, where he directed the E. G. West Centre. For his research on private education for the poor in India, China and Africa, Tooley was awarded the gold prize in the first International Finance Corporation/Financial Times Private Sector Development Competition in September 2006. From 2007 to 2009, he was founding President of the Education Fund, Orient Global, and lived in Hyderabad, India. He is currently chairman of education companies in Ghana (Omega Schools Franchise Ltd) and India (Empathy Learning Systems Pvt Ltd) creating low cost chains of low cost private schools. He also holds an appointment as an Adjunct Scholar at the Cato Institute and serves on the Advisory Council of the Institute of Economic Affairs as well as on the Academic Advisory Council of Civitas: The Institute for the Study of Civil Society. He also serves on the Board of Visitors of Ralston College, a start-up liberal arts college in Savannah.