Contracts register – is there value in having one?

Andrew Blench, school business management consultant and coach, on the benefits of contracts registers

There are lots of reasons for schools to create and maintain a non-staffing contract register. For Local Authority (LA) maintained schools this is an expectation that schools will have contracts register and that this will be reviewed regularly by the school governing body. This guidance is found within the School Financial Value Standards (SFVS). LA schools are required to complete an assurance checklist for approval at governing body level and submission to the local authority by 31^st March each year.

Q21. Is the governing body given the opportunity to challenge the school’s plans for replacing contracts for goods and services that are due to expire shortly?

It is good practice for a school to maintain a contract register, which should include:

• the contract start and end date
• the current value of the contract
• the lead in time for procurement
• information on early termination, for example, any dates or penalties incurred for early termination
• any potential for extension of the contract and
• an indication of exit strategies or re-procurement plans

The register should be shared with the governing body regularly to make them aware of any upcoming milestones in the contract register timetable and provide them an opportunity to challenge procurement plans. Question 21 SFVS Checklist Guidance.

Checklist guidance – GOV.UK (www.gov.uk)

The equivalent requirement for academy trust schools is the School Resource Management Self-Assessment Checklist. Unlike the SFVS there is a requirement for academy trusts to hold contracts register.

School Resource Management Self-Assessment Checklist guidance notes state – 

A trust must maintain a contract register, which should include:

• the contract start and end date 

• the current value of the contract 

• the lead-in time for procurement 

• information on early termination – for example, any dates or penalties incurred for early termination 

• any potential for extension of the contract, if already in the terms of the contract

 • an indication of exit strategies or re-procurement plans The register should be shared with trust boards or local governing bodies, depending on the scheme of delegation, regularly to make them aware of any upcoming milestones in the contract register timetable and provide them an opportunity to challenge procurement plans. P27 School Resource Management Self Assessment Check List – Support Notes 2022 23

School resource management self-assessment checklist – GOV.UK (www.gov.uk)

Budgeting

A good contracts register assists with budget planning and enables schools to ensure that their budget allocation for non-staffing contracts is up to date and accurate.

Contract value 

The register should contain the complete contract value as well as the termly, monthly or annual invoice value. So for example a grounds maintenance contract which costs £20,000 per year and has a contract length of 3 years, will have contract value of £60,000. Holding this information will help you to determine what kind of tendering process you might need to run when it expires. 

Contract renewal

It enables schools to be pro-active and to anticipate when contracts will be coming to an end. Thus being able to make plans to seek quotes of run a tendering exercise. In Multi Academy Trusts there may be legacy contracts inherited by the trust from member schools with widely different expiry dates. If school has all of this information to hand it can combine individual contracts into one over arching trust wide contract and make significant savings.

Some of the less scrupulous or organised contractors will rely upon schools not having contracts register. Or at least not noticing that a contract is due for renewal. It can be in the interests of a contractor to allow a contract to expire and roll forward on the terms and conditions which were agreed at the start of the contract. If the contract was agreed 3 years ago, it is possible that better deals can be negotiated. 

Academy conversion

For local authority-maintained schools joining multi academy trusts your legal company will ask you for a current contract register. This will be included in the Commercial Transfer Agreement as an appendix, which is one of the legal documents required to facilitate the transfer of the school to the MAT. The CTA details the assets and contracts transferring from the LA to the academy trust.

Setting one up

There are various templates that can be downloaded from The School Bus TheSchoolBus | TheSchoolBus (hub4leaders.co.uk) or The Key for School Leaders The Key Leaders (thekeysupport.com), for example. There are also commercial providers who offer more sophisticated software with in built reminders and links directly into your school budget planning and accounts systems.

Alternatively, you may wish to set up your own simple excel spreadsheet.

Whatever option you chose this needs to be one person’s responsibility. In most schools this will fall to the school business professional. If you are starting from scratch with your contracts register this can take some time to collate all of the information, but it will save lots of time and money further down the line.