Are you getting it right?

Caroline Wright, director, British Educational Suppliers Association (BESA) refers to its annual ‘Procurement in authority schools and academies’ which gives schools an insight into how other schools, both academies and non-academies, are managing their spending

With no formal training on negotiating, contract management, accounting and generally managing budgets the senior management teams in schools still feel they are in a trial phase; not knowing if they are getting it quite right.
The first thing our research investigated was whether schools set a formal Consistent Financial Reporting (CFR) budget at the beginning of the financial year for learning resources and ICT.

95 per cent of schools stated that they set a formal budget and a similarly high proportion set a CFR E19 learning resources budget which are the same findings as in the 2012 research.
Across all product categories, 85 per cent of primary schools and 60 per cent of secondary schools set their budgets. However, for print and digital resources only 68 per cent of secondary schools and 49 per cent of primary schools set budgets.
In terms of patterns of procurement, non‑academy schools continue to close their financial year in March and therefore tend to restrict purchasing from March, while for academies, July is the most likely time for restricting purchasing.
Collaborate on procurement
Back in the late 1990s schools joined up to form Education Action Zones (EAZs). EAZs were set up partly to form bids for products and services from groups of schools. An EAZ was a partnerships formed between the schools, their LEA and other local organisations.
One of the advantages of a local authority purchasing products and services on behalf of the schools was the power of economies of scale. Placing an order for 200 licences for a learning resource or 2,000 laptops for example, enabled the local authority to negotiate reduced pricing on many items.

Since schools have moved away from local authority control and are making their own purchasing decisions many are potentially missing out on the discounts negotiated by the authority. As a result we are starting to see schools cluster to achieve the same benefits. We expect an increase in clusters over time. Clusters can be of any size however, clearly the larger the cluster the greater the negotiating power.

29 per cent of academy schools and 32 per cent of non-academies purchase in a chain or cluster. When considering ICT products, 25 per cent of all schools at least sometimes collaborate in procurement, up from 11 per cent in 2012. However, buying in clusters is still not a common practice. Secondary academies are the most likely to collaborate on purchasing furniture (26 per cent) and ICT (26 per cent).
It is interesting to note that fewer academies collaborate on procurement than schools. Because academies are generally run by a private and charitable organisation such as ARK Schools, Academies Enterprise Trust, or Harris Federation we could suggest this is due to the fact that they are already in clusters and are therefore less likely to have a need to partner with other schools.
Whether or not schools are taking advantage of economies of scale, by collaborating in purchasing consortia, they are always looking to get value for money on all investments.

Different priorities
In primary education academies see the ‘lowest cost’ of the product of key importance or very important (81 per cent), while in secondary academies rapid and easy ordering and delivery is the key or very important factor (77 per cent). In authority-controlled primary schools rapid and easy ordering and delivery is the key or very important factor (90 per cent) and in secondary schools, being a current and trusted supplier is of key or high importance (88 per cent).
16 per cent of schools always search or react to special offers to ensure value for money while 30 per cent state that it is of key importance to select their own brand of resources which is an increase on the findings from the 2012 research (26 per cent).

95 per cent of schools stated that it is important to select their own supplier of resources, based on a trust in the level of customer service offered.
With the additional freedoms given to academies it is not surprising to see that 86 per cent of academies always or sometimes move their purchasing away from local authority control to pursue value for money. With slightly less freedom, this practice is not so common in authority controlled schools, where working through a purchasing consortia (74 per cent) and aggregating internal requirements (76 per cent) are the most common routes to pursuing value for money.
With the significant policy changes over recent years, passing the management of the school to the senior management team in schools, it is interesting to see whether schools leave procurement decisions to the head teacher.

Staff decision-making on suppliers
In previous years our research has shown that head teachers were more likely to have been involved in selecting the supplier of classroom ICT than classroom teachers. More recently there has been a shift towards subject leaders being involved in primary school purchasing, while the resource manager is most likely to be involved in procurement decisions in secondary schools.

In the research schools were asked to identify the single person effectively responsible for choosing the supplier of any product requested by a teacher.

The research revealed that clearly one size does not fit all. No one person holds responsibility for purchasing decisions of all products.
In primary schools subject leaders or heads of department are most likely (31 per cent) to take responsibility for choosing the supplier. In secondary schools the subject leader or head of department is most likely to make this decision (68 per cent).
In two-thirds of cases (and rising), either the classroom teachers, subject leaders or heads of department decide on the supplier to use for teaching materials and equipment. In contrast, only six per cent of head teachers are involved in primary schools and effectively none in secondary schools. Eight per cent of head teachers are involved in choosing the supplier of printed resources and digital content, down from 12 per cent in 2012. 20 per cent of head teachers actively choose the supplier of classroom ICT which is a reduction on 2012 findings which revealed that 23 per cent chose the supplier.
Primary academies in particular are less likely to disseminate all of their teaching materials and equipment budget to teachers than non‑academies. Furniture and storage budgets are more likely to remain centralised than classroom ICT. The overall change in 2012/13 was a shift to re-centralise budgets. 49 per cent of schools indicate that 90 per cent or more of specific product resource budgets are de-centralised.

The most marked change since the 2012 report was that there has been a sharp increase in the number of primary academies that indicate the classroom teachers and subject leaders as the people effectively responsible for choosing the supplier of teaching materials. Previously, most responsibility was directed to resource managers and bursars.

Order channels
And finally, it was interesting to see how things are changing in terms of how orders are placed. 16 per cent of all orders in schools are made via commercial supplier websites, while a third continue to be made via catalogue order forms (which are then posted or faxed).

Approximately 12 per cent of orders also continue to be made by telephone or email. Electronic procurement solutions (e.g. SIMS) make up 30 per cent of orders. The shift over the last year has been towards commercial websites, with 16 per cent of orders being made using these, an increase from 14 per cent in 2011/12.
Hopefully you will have gained comfort from knowing how other schools are managing their procurement. There doesn’t appear to be any one ‘right’ way of investing in products and services it is about doing what is right for you and your school’s specific requirements. L

Further information

About the author
Caroline Wright took up her position on the 14 May 2012, replacing Ray Barker who retired from BESA after twelve years.

Wright brings her own wealth of sector experience to BESA having spent much of the last 15 years working in senior positions within Government and the public sector.
From an early career in journalism Wright moved on to public sector PR and communications roles at The Post Office, The Department of Trade and Industry and the Cabinet Office. An interest in education resulted in her spending more than 10 years leading education communications at Ofsted, Partnerships for Schools and, as Director of Communications and executive board member at the Department for Education.
In March 2011 Wright left the Civil Service to run her own communications consultancy specialising in the youth and social care sectors. She is also an NHS non‑executive director at the country’s largest acute NHS hospital trust, Barking, Havering and Redbridge NHS University Trust.