A contentious term implying that providers of a service within public institutions such as schools are able to organize their work to suit the desires of the providers rather than the needs of the recipients of the service.
Keven Donnelly includes a description (see https://books.google.ca/books?id=7oOfAgAAQBAJ&pg=PT139&lpg=PT139&dq=education+provider+capture&source=bl&ots=FXa09emIo1&sig=5FHz__iVIUqreQczWSrDfLS231k&hl=en&sa=X&ei=dZNpVdK9AoueyQSpzoOwCQ&ved=0CDQQ6AEwAw#v=onepage&q=education%20provider%20capture&f=false) in his 2014 e-book, Dumbing Down, Outcomes-bases and politically correct - the impact of the Culture Wars on our Schools.
For a flavour of the opposing perspectives, see Jeremy Agar at http://www.converge.org.nz/watchdog/15/09.htm (accessed 30 May 2015), who says:
“Provider capture” is a theological tenet of neo-liberalism, a dogma that insists that responsibility for making policy should be taken from those who know what they’re talking about and handed to economists. Teachers are biased, says the theory and will feather their own nests, whereas economists are uniquely dispassionate and concerned with the good of the nation. You have to hand it to the neo-libs. They’ve spread their doctrine far and wide. They’ve created hospital chaos by keeping doctors and nurses away from health policy. They sidetracked proposals to provide a national retirement income or to fund university education by the claim that the basic principle of universality was really “middle class capture”. Sinister sounding, isn't it?