As we approach the end of the financial year, let’s look at how schools procure products and services.
Transparency is key. Procurement decisions are bound by regulatory requirements, as you’d hope and expect: it’s your tax or, in the case of the independent schools, your school fees they’re spending. The purchasing process must be fair, open to inside and outside scrutiny and offer good value for money. Non-compliance can lead to time-consuming legal challenges from suppliers, financial penalties, cancelled contracts and reputational damage. Such challenges are rare, however.
It’s worth mentioning that many state schools across the country remain locked into PFI contracts which could go on into the 2040s.
The Department for Education
Let’s start with the government’s online advice. To protect both suppliers and schools, the DfE publishes clear and comprehensive guidelines on procurement, covering everything from buying books, IT and educational resources to cleaning and catering services or gas and electricity. ‘Value for money’ and the current need to ‘comply with EU procurement law’ are guiding principles.
The system is under review, however. The Department for Education is looking to finetune school purchasing processes, after concerns over what they see as ‘inefficiency’ and ‘market failure’. Its ‘Schools Buying Strategy’ aims to help schools shave £1 billion off their current £10 billion spend on non-staff costs. It explains:
“Developing a digital service to help schools save money on standard catalogue purchases could be a critical enabler for work under this strategy, and act as a catalyst for behavioural change in schools to encourage better resource management.”
Schools and academies are tightening belts. More and more anecdotal evidence tells of parents being asked to contribute to essentials such as textbooks, stationery and lab equipment. Pressure on school funding is increasingly front-page news.
The Schools Financial Benchmarking website and the School Business Professional Networks Directory
A system is in place which enables all English maintained schools to compare charts outlining their income and expenditure profiles with those of similar schools. If they’re paying too much for books and stationery or gas and electricity, it will be immediately apparent.
Schools also use the School Business Professional Networks Directory, where they can get peer-to-peer support for school business tasks such as procurement. Local contact leads and groups offer a mine of information.
Approved supplier lists
For further peace of mind, many schools refer to a list of approved suppliers drawn up by local associations, local authorities, and category specialists. Its advantages include a stringent vetting process which ensures suppliers offer quality, value, reliable delivery, and excellent customer care, along with relevant insurance cover and industry-specific accreditations.
For suppliers, all this means higher costs and barriers to entry, but greater visibility and authority in the market, and pole position in the school buyer’s journey.
Capital expenditure costs
Capital expenditure and other big costs face greater scrutiny. Different rules apply depending on the value of the purchase.
If a school is looking to buy machinery for the Design and Technology department or build a new swimming pool, it makes sense to put it out to tender, and get several quotations from a range of companies, so as to ensure the best deal. Not to do so could prove costly. Furthermore, ignoring competitive tendering policies leaves individuals and institutions open to accusations of nepotism and legal disputes.
Economies of scale and collaboration
Other means of saving money include collaborative purchasing, where schools join forces to increase their purchasing power.
Kevan Walsh, retired Managing Director of school energy broker Zenergi, explains: “It is vital that suppliers make it as easy as possible for schools to collaborate on the buying of high quality, good value goods and services.”
Schools also do their best to get the most out of existing contractors. On the other side of the fence, suppliers know that it’s easier to retain customers than win new ones. Time is better spent bending over backwards for current clients than chasing prospective ones – the age-old bird-in-the-bush philosophy of marketing.
Just how centralised are purchasing decisions?
The Multi Academy Trust model brings with it economies of scale and collective purchasing power. Furthermore, central administrative services free headteachers and their staff of the burden of dealing with payroll, budgeting, and contract negotiations. That said, Headteachers, Heads of Department, Key Stage or Faculty Heads, as well as Bursars, School Business Managers or Finance Managers, all have their say.
And much is delegated to support staff, who oil the wheels of schools and academies across the land. It may well be the Lab Technician or Head of Reprographics who spends their time chasing the best deals in terms of price and service. These invaluable members of personnel are often ex-industry, and highly experienced and knowledgeable. They have chosen to see out their careers in an environment where they can work fewer hours and make a difference. Armed with an enviable list of contacts, inside and outside education, they’re the ones who save the pennies on units to save pounds in the long run. These are the people to know if you’re keen to pitch to schools.
Individuals buy not institutions
We’d conclude with these sentiments. Remember that you’re selling to people not schools. Though guided by policies and procedures, it’s ‘Lab tech Jen’ or ‘Mike in IT’ who do the wheeling and dealing, as we explore at greater length in our next blog: ‘What schools look for in a supplier’.