The Art of the Deal

You know the story – costs go up, budgets get pinched, projects get shelved. But there are ways that schools and trusts can negotiate better prices. Explore our digital version of Clare Skinner’s recent article

An extended version of this article was originally published in our January issue of Education Executive

Budgets are tough and, although most of our expense comes from our human resources, SBPS are often challenged to squeeze as much out of the remaining expense lines as possible. So how do you maximise what those non-staffing expenditure lines can get you?

Understanding How You Measure Up

Benchmarking is a helpful activity to understand where your setting can start to spend money better. Look at similarly profiled schools and trusts in your area using the DfE Financial Benchmarking and Insights tool (FBIT) to help you to identify where to focus your efforts. It will enable you to see where other settings are spending considerably less than you are. Now this is always contextual, but there is no reason for you not to pick up the phone and speak to those schools, especially if they are part of your local network, to understand if that context can be applied to you as well. They may introduce you to new prospective suppliers that could have a huge impact on your outgoings, recommendations are often a route to getting a great deal.

Review and Analysis

We spend a lot of time looking forward and worrying about increasing costs, but do we spend time really digging into what has happened in the past? Can you identify areas of repeated or duplicated spending that can be addressed through better service level agreements and contract consolidation. Look at what each cost centre has spent money on and who that money has been spent with so that you have the knowledge (and therefore power!) to be able to move to the next step.

Harness Relationships

Who are your top 20 suppliers and when you last review them against the competition? When did you last ask then for a discount? This doesn’t have to be a threat to withdraw your custom, merely a statement of how much money you spend with them each year and questions around how that loyalty can be rewarded. Schools can often be seen as cash cows which long term suppliers will just slap an above inflation price increase on – stop allowing that and get into a conversation on at least maintaining costs, if not driving them down.

Plan your Purchases

Having a robust contract register in place will mean that you can plan truly effective procurement and build in the amount of time that is needed to secure the best value provision possible. It will mean that you can make great use of consortia and frameworks or engage professional procurement support for those more complex contracts. Use this opportunity to consider the benefit of securing a multi-year (or if in a Trust, a multi-school) deal as it can bring significant discounts or stabilise costs.

Add Value

Once you have the best price then you need to consider what else can you get from this deal? It could be free bolt-on services, upgrades to the next service level or additional training time to really ramp up the value offer. If it is not part of the core service of what you are buying, then could it be your supplier joining a careers panel to talking to students about their business and their experiences in the workplace. Could they offer work experience placements or come into your school to coach and mentor young people looking to join their sector? What does the business do in relation to their social and corporate responsibility – could their contribution to the local community involve volunteering to support school projects with time and manpower, for example could your catering provider run free cookery classes for your post 16 students about to leave home or to your disadvantaged families on a tight budget?

Clare’s Final Thoughts

My approach to buying is that if you don’t ask then you won’t get and sometimes that can take a few calls to a few different people in the same business, but it can be really worth it. You can always mention to suppliers that you are using their tax-payers money and trying to make it go as far as possible for the children, that often does the trick to get a deal done!