http://news.bbc.co.uk/1/hi/uk/7615539.stm (Interesting article that gives some of the pros and cons)
http://news.bbc.co.uk/1/hi/england/london/7118069.stmhttp://news.bbc.co.uk/1/hi/education/543512.stmhttp://news.bbc.co.uk/1/hi/education/4686077.stmThis is part of the system that we've had since the 1944 Education Act, of 'voluntary aided schools', whereby certain schools are predominantly (typically 90%) funded by the state, and are subject to state regulations concerning the curriculum, but a religious body also influences the management of the school and can and typically does give preference in admissions policy to children of families from that religion..
Most such schools are Church of England; a fair number are Catholic; a smaller number are Jewish; a few are Muslim.
The Church of England and Catholic schools that I know personally are quite tolerant and well-run places, with quite a lot of ethnic and religious diversity among both staff and pupils, and little or no attempt to convert or discriminate against pupils of other faiths. However, this is obviously not always the case, and there are concerns that in some areas faith schools may contribute to de facto segregation of communities: particularly in areas where there is already a problem, e.g. where an immigrant group is voluntarily or otherwise set apart from the majority community, or most of all in Northern Ireland where there is a big divide between Protestants and Catholics, which at many times in the past amounted to virtual civil war.
Moreover, there are concerns about discrimination against non-members of the faith at admission (you may wonder why parents wish to send their children to a school of a faith that they don't hold, but in fact many faith schools achieve good exam results in the curriculum as a whole, and religious indoctrination is not always a strong feature). Such concerns are of course most commonly raised by secularists, but interestingly the Bishop of Oxford has expressed some such concerns:
http://www.bbc.co.uk/news/education-13158380 The 'free schools' movement is a product of the present government, and has aroused concerns for reasons that mostly have nothing to do with religion; in fact most of these schools would be run by businesses or by groups of parents, and only a minority by religious institutions. But many people worry that, especially in these times of cuts, this is just a way to divert state education funding from the most disadvantaged groups of pupils to businesses which may have their own agenda, and groups of upper middle class families, who have the resources to start a school, but are far less in need of government help than those that will lose out