As schools walk the financial-tightrope, smarter procurement and supply can be the difference between a budget in the red or in the black. But what does smarter procurement look like? EdExec, in conjunction with our partners GLS Educational Supplies, is on a mission to find out
While schools spend, on average, three-quarters of their budgets on staff, collectively schools spend approximately £10 billion on other areas including back office, facilities management and catering. As additional pressure is placed on contracting school budgets, it’s essential that a strategic approach is taken to procurement in order to achieve best value-for-money in the long-term.
More for less
In Financial sustainability in schools, a 2017 report published by the National Audit Office (NAO), Amyas Morse, the NAO’s head, advised that mainstream schools would need to make £3bn in ‘efficiency savings’ by 2019-20 – this against a backdrop of increasing pupil numbers, real-terms reductions in per pupil funding and the issue of increasing on-costs. According to the Department for Education (DfE), on a per pupil basis, these pressures are estimated at around eight per cent by 2019-20.
The same report estimated that £1.7bn could be saved by managing staff more efficiently and a further £1.3 billion could be clawed back through better procurement.
At the time Morse also recognised that, while the DfE expected schools to ‘finance high standards by making savings, and operating more efficiently’, it had ‘not yet completed its work to help schools secure crucial procurement and workforce savings’.
Since then action has been taken. In April 2018 a new national funding formula for schools in England was introduced. Although less ambitious than originally intended, the funding reform seeks to ensure similar local authorities receive similar levels of funding per pupil. However, there are some who feel this is not the ‘fair’ formula promised, warning that some schools will be adversely affected.
In April this year Tom Goldman, deputy director for the DfE’s funding policy unit, told the Schools and Academies Show in London that budgets for 2019-20 will leave schools ‘with real pressures to face’, and he acknowledged some schools would face ‘tighter’ finances under the new national funding formula.
The government has also launched a schools’ buying strategy; this has the purpose of supporting schools to save over £1bn a year by 2019-20 on their non-staff spend.
While making savings is an admirable goal – and one that every school business manager and leader approaches the school budget with – there is also the reality of increasing costs, changing expectations and, in many schools, increasing pupil numbers. What becomes clear is that those managing the budgets are having to do more with less.
The case for efficiency
The government wants schools and academies to ‘get the best value for every pound spent’ and to save money on non-staffing costs. This means procuring goods and services in the most efficient and effective way possible – a task which tends to fall on SBMs in their many guises.
The case for efficiency is a simple one: effective schools make the best use of resources, which improves standards and ensures the maximum impact for schools. This requires planning educational improvement in tandem with finances, and it requires the whole-school body to be on board. However, it can be extremely time consuming – and time is a resource that is in short supply in the busy school environment.
How do schools make efficiency savings – of time and money – to help manage the challenges faced, while continuing to deliver and improve standards for their pupils? One focus is procurement; our focus is smarter procurement – how to help schools to, not only improve processes to save money, but also streamline them to save time.
This requires us to identify the pinch points for SBMs on a daily basis. For example, what does a streamlined process that can save you time look like? Would improved CPD help you to manage the procurement process? Would it help engage other members of the wider school community? Essentially, how can schools save time and procure at best-value. These are the tenets of smarter procurement.
Not about smart, but smarter
Smarter procurement secures financial savings that can be re-invested in your school and ensures that goods and services are fit-for-purpose – delivered, as agreed, by suppliers – while financial obligations are complied with. Despite changes in how schools are managed, procurement procedures can sometimes be undermined by habitual purchasing – whether that is adhering to ‘how it has always been done’, or ‘who it has always been done with’, rather than fully engaging with the process.
While SBMs have a deep understanding of the sector – no-one is more attuned to the state of funding in UK schools and academies, the importance of smarter procurement, or the nuances and regulations around procurement that can make it a difficult area to navigate – smarter procurement is a school-wide commitment. We want to crack it, define it and make it practical and practicable.
Although there is much written on procurement generally, EdExec has joined forces with GLS to examine the areas that SBMs find most challenging in relation to procurement – we want to identify how this function can be streamlined to improve efficiency, reduce costs and save time for schools and those who work in them.
EdExec and GLS are undertaking research into school procurement; our findings will be published in a white paper and shared with the sector. We need your help with this.
In addition to delving deep into the existing material on procurement, we are gathering the insights and experiences of those on the frontline who undertake, and engage with, the procurement process on a daily basis. We’re very keen to have your input via our short, online survey (it will take no more than a few minutes) to help us with our research.