Improving School Procurement and Efficiency

NASBM Conference 6 October 2015

Steve Archer

Schools Commercial Team

Commercial Division

Changes in the schools landscape

• Growing numbers of academies, Multi Academy Trusts, and changes at Local Authorities with some stopping back office services

• Future pressures on schools spending include; non-pay inflation pay costs employer pension contribution

increases from September 2015 national insurance employer

contribution increases from April 2016

DfE review of efficiency in the schools system

Full report June 2013https://www.gov.uk/government/publications/review-of-efficiency-in-the-schools-system

Evidenced success factors

Deploy the workforce effectively, with a focus on developing high quality teachers

Make use of evidence to determine the right mix of teaching and education support staff

Employ or have access to a skilled school business manager (SBM) who takes on a leadership role

Make good use of financial benchmarking information to inform the school’s own spending decisions

Make use of school clusters, sharing expertise, experience and data, as well as accessing economies of scale when making shared purchases

Manage down back office and running costs

Have in place a strong governing body and leadership team that challenges the school’s spending

save money get better value for money

be accountable for what you

spend

follow the law

How can procurement help you….

When spending public money ensure:

fair and open competition

compliance with the EC Treaty

Public Contracts Regulations compliance

spending public money means you are accountable to UK Courts and European Commission

For all Schools current thresholds are:- £172,514 Goods & Services £4,322,012 Works

Regulations do not apply in full when the estimated value of the contract is below threshold

But Treaty principles do

Public Sector Procurement – what does it mean for schools

Revised directives agreed by EC June 2013 are now UK law

since February 2015

Core changes include: Most Economically Advantageous Tender (MEAT) standard

award criteria. Innovation partnerships: to allow discussion and co-

operation between public and private sector. New regulations no longer differentiate between Part A and

Part B services. UK negotiated exemption for Education and Social

Services. Enables UK including schools to use a “light touch” regime

for services under £650,000.

New EC Procurement Directives

Importance of efficiency and financial management

All schools working to makesavings to maximise resources in teaching and learning

Focus on efficiency, undertakestrategic financial management andprocurement to deliver savings to re- invest back into the school

Front line staff in schools make the biggest contribution to children’s experience and what they can achieve 

Staff costs are a high percentage of schools expenditure (80-85%)

Variation in back office spending

Save money - time for a health

check?

Twenty three schools – 3 secondary and twenty primary, all within a 15 mile radius, with a total non pay spend of approximately £5m per year.

• Number of suppliers used? • % of spend with top twenty suppliers?• Number of suppliers used with a transaction value

of less than £500?• Number of suppliers used with an average

transaction value of less than £100?

Spend analysis

What does this tell you?

Analyse expenditure

Review your contracts

Identify opportunities for rationalisation

Deliver admin savings

Collaborate across key strategic spend areas

Benchmark and compare

What can you do?

Why collaborate?

Become an intelligent customer

Achieve procurement efficiencies

Meet deadlines by sharing tasks

Get better services by knowing

what works for your schools

SBM Primary Cluster Grant 2014-15

The DfE SBM PC grant funded the employment of a cluster

business manager (CBM) in 68 clusters. Initial survey headlines:

Overall projected savings £2.2million across all clusters

Positive SBM impact on wider educational attainment

Impact was particularly evident in procurement activities and

contract management.

Majority of respondents said the CBM role was likely to

continue beyond 2015.

We’ve taken the work out of finding good deals in key spend areas…

Public sector buying organisations (PSBOs) Some of the organisations we work with:

• Crown Commercial Service (CCS)

• Eastern Shires Purchasing Organisation (ESPO)

• North Eastern Purchasing Organisation (NEPO)

• Yorkshire Purchasing Organisation (YPO)

• Central Buying Consortium (CBC)

• Crescent Purchasing Consortium (CPC)

Ensuring the frameworks are fit for schools

We are reviewing the framework offer for each category of

schools’ spend, to ensure they meet schools’ needs: Understand what schools’ specific needs are for the category

Obtain school data so that we understand what schools currently buy,

who from and at what price.

Engage with the market to seek ideas and highlight challenges.

Establish school user groups to inform and shape agreements.

Ensure the agreement language is school friendly making it easier for

schools to use.

Work with agreement owner and supply chain to ensure they are

ready for schools.

Monitor and review uptake to address any issues and look at ways to

further improve the offer.

Slide 6

• Risk Protection Arrangement

• Energy efficiency

• Energy supply

• MFD’s

• ICT services

• Facilities Management

• Merchant Acquiring Services

Key spend areas…

Risk Protection Arrangement (RPA) EFA letter 14 February 2014 outlining the RPA as an

alternative to insurance

RPA is NOT insurance

Government managing risk in line with HM Treasury policy

as set out in ‘Managing Public Money’

£25 per pupil fixed until August 2016, not expected to

increase

Available for all academy trusts and multi academy trusts

to opt in as an alternative to insurance

1182 academies have opted in as of June 2015 and are

under cover

94 members who have opted in will go live later in 2015

Pros and Cons of joining RPA Pros

- cost effective (VfM)- wide cover- integrated Risk Management- professional Claims Handling service- reduced administrative burden for academies - no renewal process, just opt in - no material fact disclosure

Cons- not insurance, lease and other agreements may need to be amended- certain risks excluded (motor, engineering, fine arts, overseas travel)

Gallagher Bassett – Claims Handling Gallagher Bassett appointed as Third Party Administrator

Dedicated portal for claim notification, claims can also be

submitted via post, email or telephone

24 hour emergency helpline in the event of a catastrophic

event

Appointed loss adjusters and legal advisers ready to

assist in the event of a claim

Rehabilitation facilities

Process for managing sensitive claims

Interim payments available for catastrophic property

losses

Provision for arbitration in the event of a dispute

More information

You can find out more about the Risk Protection Arrangement,

including information about the claims management and risk

management approach on the Gov.UK website here:

https://www.gov.uk/academies-risk-protection-arrangement-rpa

The RPA Membership Rules set out the full scope of the RPA and

can be found here:

https://www.gov.uk/government/publications/risk-protection-arrangement-rpa-for-academy-trusts-membership-rules

Cover helpdesk and advice line is available

to all academy schools

RPAAdvice@willis.com

Schools energy efficiency

What are the aims:

To increased energy

efficiency within schools

Reduced £500 million

annual spend across the

English schools estate

Improved learning

environment for pupils

and staff

Reduced carbon emissions

Lower maintenance costs

Reduced need for equipment upgrades

Reduced maintenance backlog

Other benefits

Working with our key delivery partners DECC, Salix Finance, Local Partnerships and the GLAs RE:FIT team:• Invested £32 million of capital through the Salix Energy Efficiency

Loans scheme• Provided over 670 schools and academies with interest free loans

for energy efficiency projects with projected lifetime savings of £63 million

• Further funding through the EFA Conditions Improvement Fund (CIF)

• Maintained funding through Salix Finance• Established a schools page on the Salix website

www.salixfinance.co.uk/schools

What have we achieved so far?

Exemplar Case Studies

Alfred Street Junior School used a £16,870 Salix loan to replace their old lighting with new T5 lamps, insulate internal pipework and improve burner management on their boilers.These projects will be repaid from the savings in 5.5 years.

Developing a work programme with Crown Commercial

Service (CCS) to support school procurement and

efficiency including:

Energy supply

Multi Function Devices

ICT services

Facilities Management

Merchant Acquiring Services

Crown Commercial Service

DfE and CCS worked collaboratively with an academy stakeholder group to understand the energy market challenges faced by the schools sector. This informed work to simplify the customer engagement process and increased awareness of the transparency and scrutiny of the current arrangements.  

The aim is to help schools and academies achieve greater value for money when buying their energy and we have seen increased enquiries from schools since launching the campaign.

Energy for Schools https://www.gov.uk/government/publications/energy-for-schools

Energy facts. . .

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1,000+ customers

Savings £110m+ p.a.

17.6TWh

11TWh

110,000+ meters

70%+ of public sector energy spend

Category Spend £2.4bn + p.a.

Data Analysis

Corona Energy Manager

By understanding a sites core business, hours, areas of use and basic demand we

can identify where there is waste and ensure this is kept to a minimum, if not cut

completely

Unlike other energy saving schemes, rather than replacing or installing

equipment, we focus on maximising efficiency

Primary School ‘A’ – December 2014

Primary School ‘B’ – December 2014

Photocopiers/Printers (“MFDs”)

6

3,130+ Customers To DateEducation All Lots

50%Average Price Savings Education Lot 1

£43.5 millionSpend To DateEducationAll Lots

“This deal delivers big savings and peace of mind – certainly best value. I’ve recommended it to other business managers

and they’re seeing great results.”

Business Manager Fitzjohn’s Primary School

“By using the new RM1599 framework the school is saving

90% on the new Xerox MFD agreement plus over 80% on

the service contract.”

Benthal Primary School By switching to our MFD framework, Jack Tizard

School are saving

39% on their colour printing,

That’s over £1,300

per year

“We’re saving £939 a year, that’s

54%”Victoria Infant & Nursery School

Technology

35

IMLS

EASSCSS

LASA

PSN G-Cloud

Digital Services

CBT TMT

Managed eMail

Technology Products

ICT Services for Education

ICT Services for Education

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• Specifically tailored to meet schools’ ICT requirements

• 4 year Framework running until April 2019

• 21 approved suppliers that have:- knowledge and experience of delivering

educational solutions been evaluated via an EU compliant

competition process have signed up to pre-determined

contractual t’s & c’s subjected to contract and performance

management

• Suitable for Maintained schools, Local Authorities, Free Schools and Academies.

Information Management & Learning Services (IMLS) Framework

37

• Awarded in March 2012 by CCS in close collaboration with DfE

• 4 year arrangement running until March 2016

• Lot 1 – School MIS solutions (9 x approved suppliers)

• Lot 2 – Learning Services solutions (15 x approved suppliers)

• Future services access via G-Cloud

Microsoft MoU for Schools

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• Covers full range of Microsoft Academic Software Licence programmes

• Negotiated by GPS and DfE during 2012 and launched on 1st January 2013 (for a 3 year term)

• Currently subject of re-negotiation (existing agreement expires Dec 2015) – details will follow

• Delivers savings of c. £10m per annum by way of discounts and preferential terms and conditions

• Make sure your re-seller offers the MoU discounts/concessions

• Compete your requirements with more than one supplier

Microsoft MoU for UK Schools

39

• Microsoft also offers several “free” products should you take out an enterprise subscription (OVS-ES) 5 free installations for students of either Office 365 ProPlus or

Office for Mac (can include smartphone/laptop/home computer) Office Mobile on iPhone and Android phones Check with your re-seller

• Google Apps for Education also have a comprehensive free offering

• Direction of travel is undoubtedly to the “cloud”

Cloud Software Services

40

• Major providers to schools (Google/Microsoft/Apple/Amazon/Oracle/Adobe etc) are all either “cloud”-based or heading that way fast

• Cloud offers savings opportunities but is not a cure-all

• DfE is pulling together some “best practice” guidance for schools wishing to migrate to the cloud

• DfE maintains some Cloud and Data Protection guidance where suppliers have responded - https://www.gov.uk/government/publications/cloud-software-services-and-the-data-protection-act.

Facilities Management

41

The new Facilities Management Contracting Model (FMCM) will provide an innovative and extensive contracting vehicle giving access to:

• Total facilities management• Hard FM • Soft FM services

The solution will also include the FM Dynamic Marketplace providing a quick and efficient route to market for low value contracts, allowing a large number of providers, from SMEs to multi-nationals to participate by following a basic pre-approved supplier approach.

The agreement will be the primary route for FM services to government and the wider public sector.

Merchant Acquiring Services

42

Many schools and colleges have moved to electronic “chip and pin” payments and electronic parent communication.

• Schools should benefit from the low volume related transaction fees like retailers and other corporate companies.

• Retendering CCS Merchant Acquiring Service Provider framework to include schools within scope.

• The aim is to reduce transactional costs for schools

Procurement Capability Project

DfE want to increase schools public procurement capability, reduce the risk of schools being legally challenged by suppliers and improve Vfm achieved for goods and services purchased. • The DfE are offering a train the trainer (TtT) approach to allow

SBMs and finance staff working in partnership to drive procurement capability across the sector;

• The DfE will develop resources to support bite size procurement sessions supported by webinars and video clips. We may consider the future development of applications for web anywhere learning solutions;

• Contact helen.lumb@education.gsi.gov.uk if you would like more information for your next SBM meeting or would be interested in leading a local group.

Useful procurement information

https://www.gov.uk/government/collections/buying-for-schools

 

Buying collaboratively  

For school leaders, school business managers, back office staff and governing bodies in all schools    November 2014

Effective Buying foryour school  

For school leaders, school business managers, back office staff and governing bodies in all schools   March 2014

Buying ICT foryour school  

For school leaders, school business managers, back office staff and governingbodies in all schools   November 2014  

stephen.archer@education.gsi.gov.uk