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PROCUREMENT:Smarter

A PRACTICAL GUIDE TO IMPROVING VALUE AND EFFICIENCY

EDUCATIONEXECUTIVE

IN PARTNERSHIP WITH

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PROCUREMENT:Smarter

A PRACTICAL GUIDE TO IMPROVING VALUE AND EFFICIENCY

£CONTENTS

1. FOREWARD

2. EXECUTIVE SUMMARY

3. SECTION ONE: INTRODUCTION Current state of the sector

Focus on funding Where do we go from here?

Research methodology

7. SECTION TWO: FINDINGS Introduction Key findings

12. SECTION THREE: RECOMMENDATIONS Introduction

Key recommendations

18. CONCLUSION

19. REFERENCES

20. ABOUT

EDUCATIONEXECUTIVE

IN PARTNERSHIP WITH

EDUCATIONEXECUTIVE

This report – a joint venture between Education Executive, the publication which supports business and financial excellence in schools and academies, and GLS Educational Supplies - lifts the lid on procurement in schools and academies across England and Wales, documenting the changing face of the purchasing process and the impact funding has had on how schools operate and are managed, before identifying the challenges school business managers face on a daily basis and examining how they can overcome these to streamline their procurement process and reclaim some time. GLS Educational Supplies has long worked with schools and their SBMs, supporting them and ensuring that they have the best goods at the best price. We like to think that we understand the procurement role of the SBM; we have worked hard to do so – asking the right people (you) the right questions (what do you need?) so that we can tailor our offer to their needs. We take a great interest in the issues addressed in this report – in particular, the challenges faced in the procurement process and what SBMs need to be able to overcome them. We hope that by laying this process bare – the highs and the lows – we can encourage SBMs to push back and get what they want and need, not just what’s on offer from the suppliers they work with. We are working closely with frontline SBMs to do our part to ease the burden of procurement on a day-to-day basis. This piece of research provides important evidence in support of our approach, and also gives us some ‘food for thought’; we will continue to research, to explore and to ask how we can improve our offer so that our hard-working SBMs have one more ally in the good procurement fight.

Chris MahadyManaging directorGLS Educational Supplies

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FOREWARD

Vicki BalochManaging director

Publisher

EDUCATIONEXECUTIVE

The government wants schools and academies to ‘get the best value for every pound spent’ and to make savings on the sector’s current £10 billion non-staffing costs. However, many schools have already pared their spend back to the bone, so where can additional savings be made? This is not just about cost savings; it’s about winning back time on the procurement process that can be spent elsewhere.

Schools, and those who manage them, find themselves between a rock and a hard place – trying to do more with less. To survive, the modus operandi must change. When it comes to procurement, research and debate have predominantly focused on the larger scale tenders; however, SBMs accustomed to buying on a budget and seeking to claw back time need innovation at ground level – day-to-day buying.

What are the areas that SBMs find most challenging in relation to procurement? How can this function be streamlined to improve efficiency, reduce costs and save time for schools and those who work in them?

This report seeks to answer these questions by examining the ‘pinch points’ that SBMs face, identifying how the procurement function can be streamlined to improve efficiency, reduce costs and give them back some precious time.

In addition to drawing on existing sector research, we carried out a smarter procurement survey. It focused on the challenges SBMs face when procuring, where (and whether) savings could be made, sources of support, streamlining the procurement process and who it involves. The survey garnered 216 responses, representing the range of school settings and the breadth of the SBM role.

These findings establish a need for smarter procurement - which not only means a strategic and streamlined process but one which also includes the whole school.

Based on these findings, this report defines a procurement process which is fit-for-purpose – a smarter procurement process – and makes some key recommendations in the following areas:

■ professional development■ purchasing audit■ procurement process■ value-for-money.

Over the course of the research conducted for this paper, and the findings from our reader survey, it has become evident that the funding challenges faced by schools are changing how they operate and are managed. Procurement, always essential, has become pivotal, and the challenges faced by SBMs in this arena are more than technical; in addition to budget constraints, a lack of time to focus on purchasing is hampering the process. For these reasons, it seems it is time that we defined and delivered a smarter approach to procurement.

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EXECUTIVE SUMMARY

EDUCATIONEXECUTIVE

It’s essential that those tasked with the allocation of funds take a strategic approach to procurement to achieve best value-for-money in the long-term

While schools spend, on average, three-quarters of their budget on staff1, collectively they spend approximately £10 billion2 on non-staff costs including back office, classroom resources, facilities management, IT and catering. Demand on schools’ resources is increasing, and additional pressure is being placed on budgets already bitten by increasing staff and operational costs. In addition to doing more with less in real terms, schools are under pressure to make billions in savings.

In the context of the school budget, then, efficiency is king. It’s essential that those tasked with the allocation of funds take a strategic approach to procurement to achieve best value-for-money in the long-term. This most often falls to school business managers (SBMs) – an additional job to juggle. However, procurement can be a complex and time-consuming process, and SBMs often lack the appropriate experience or support.

So, what are the areas that SBMs find most challenging in relation to procurement? How can this function be streamlined to improve efficiency, reduce costs and save time for schools and those who work in them?

This white paper seeks to answer these questions by examining the ‘pinch points’ that SBMs face, identifying how the procurement function can be streamlined to improve efficiency, reduce costs and give them back some precious time.

CURRENT STATE OF THE SECTORIn Financial sustainability in schools3, a 2016 report published by the National Audit Office (NAO), Amyas Morse, head of the NAO, advised that mainstream schools would need to make £3 billion in ‘efficiency savings’ by 2019-20 – this against a backdrop of increasing pupil numbers, real-terms reductions in per pupil funding and increasing on-costs. The report added that it expected efficiency savings to the tune of £1.7 billion should be made by managing staff more efficiently, and that a further £1.3 billion should be saved through better procurement.

Morse observed that, while the Department for Education (DfE) expected schools to ‘finance high standards by making savings and operating more efficiently’, it had ‘not yet completed its work to help schools secure crucial procurement and workforce savings’.

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SECTION ONE: INTRODUCTION

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As schools and academies grappled with this increased autonomy and a more austere financial climate, the business management function became more important

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Meanwhile, the education landscape was undergoing rapid diversification, the result of a raft of new policies that have led to the development of new school structures and increased autonomy as responsibility shifts away from local authorities (LAs) to schools – a shift that started in 2010 with the change in government4. Schools found themselves with ‘the freedom and the power to take control of their own destiny’; if they converted to academy status they gained operational autonomy – including over curriculum design, budgets, staffing issues and the shape of the academic year. However, with increased autonomy comes increased responsibility.

As schools and academies grappled with this increased autonomy and a more austere financial climate, the business management function became more important. These developments saw SBMs become ‘key-players’ in the school ecosystem, leading the charge in terms of business management and leadership5.

FOCUS ON FUNDINGAccording to the Institute for Fiscal Studies (IFS), total school spending per pupil has fallen by eight per cent since 2016. The National Education Union (NEU) adds to this financial picture noting that, although school funding was maintained in real terms per pupil funding under the coalition government, additional funding was provided as pupil premium – a supposedly ring-fenced budget – and distributed unevenly7.

What does this look like in numbers? Analysis of government school funding figures by the School Cuts coalition found a shortfall of £5.4 billion over the past three years, with 91% of schools in England affected8. The Association of School and College Leaders (ASCL) suggests that, in order to remedy the current funding shortfall, school funding needs to be increased by a substantial £5.7 billion in order to provide every child with the education that ‘society expects and children deserve’9.

Of course, things have moved on since the NAO’s 2016 report. The government has sought to even out the playing field and began introducing a new national funding formula (NFF)10 for schools in England – yet to be fully implemented. Although less ambitious than originally planned, it’s the start of a much-needed reform process that promises similar LAs will receive similar levels of funding per pupil. However, some feel that the NFF marks the removal of local decision-making on financial allocations, resulting in tighter control by Whitehall which could adversely impact accountability, transparency and local democratic control of education funding.

In April this year Tom Goldman, deputy director for the DfE’s funding policy unit, told the Schools and Academies Show in London that budgets for 2019-20 will leave schools ‘with real pressures to face’, as he acknowledged some schools would face ‘tighter’ finances under the new NFF.11

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To counter this, schools have been innovating, looking at alternative ways of bolstering budgets, making them go further and raising the additional funds required to properly resource requirements. Traditional fundraising methods are being executed at greater scale. Just as grants are being applied for (and sometimes depended upon), voluntary action - volunteers in schools - is increasingly being relied on to support core school activities and offset declining budgets, rather than simply to enhance existing provision. This trend was investigated in an academic report by the University of Kent called A bridge too far?12. In addition, an investigation by The Guardian found that schools across the country are turning to online fundraising, reporting that 700 schools have crowdsourced donations through websites such as JustGiving and Crowdfunder, and a further 300 are using Amazon Wish Lists13.

Schools continue to build and exercise business acumen, identifying how they can augment budgets with additional funding. SBMs are sweating the assets, collaborating and achieving economies of scale, managing and outsourcing their resources; they are procuring those resources as effectively and efficiently as possible – all the while juggling the education, health and safety and wellbeing of students.

WHERE DO WE GO FROM HERE?Schools, and those who manage them, find themselves between a rock and a hard place – trying to do more with less. To survive, the modus operandi must change. When it comes to procurement, research and debate have predominantly focused on the larger scale tenders; however, SBMs accustomed to buying on a budget, and seeking to claw back time, need innovation at ground level – day-to-day buying.

Limited attention has been given to the impact of procurement pressures on school business professionals who manage and lead this function. This research paper engages with SBMs, and others with purchasing responsibilities, to identify the procurement practices that are helping schools to navigate this turbulent financial period by improving value and efficiency and to provide practical solutions.

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In addition to delving into the existing body of research, we have undertaken a reader survey to gather the experience of SBMs on the ground, adding to existing research and refining it so that it’s more relevant to the SBM community and the contemporary challenges it faces – ultimately, providing a valuable guide.

RESEARCH METHODOLOGYIn addition to drawing on existing sector research from esteemed organisations such as the Institute of School Business Leadership (ISBL), The Key for School Leaders, the DfE’s Schools Commercial Team, which oversees the Schools’ Buying Strategy, and the Chartered Institute of Procurement and Supply (CIPS), we carried out a smarter procurement survey. This survey focused on the pinch points SBMs face when procuring, where (and whether) savings could be made, sources of support, streamlining the procurement process and who it involves. It garnered 216 responses, representing the range of school settings and the breadth of the SBM role.

■ School settingSurvey respondents represented a variety of settings – predominantly (LA) maintained schools and multi/single academy trusts, but also grammars and voluntary controlled schools – in both primary and secondary phases (with a greater number from primary schools). Geographically, respondents were drawn from north to south.

■ Respondent roleRespondents held a range of titles, the most common of which were ‘school business manager’ or ‘business manager’. Other titles included finance manager, finance officer, bursar, director of operations, administrator, and consultant.

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INTRODUCTIONThe following section examines the changing face of procurement and the resulting ‘pinch points’ experienced by SBMs – establishing a need for smarter procurement which does not only mean a more strategic and streamlined process but one that also includes the whole school.

A CRISIS OF FUNDING, A CATALYST FOR CHANGESchool funding and pupil premium 201914, published by the Sutton Trust, highlights the severity of the current fiscal squeeze; the organisation’s research found that 69% of secondary senior leaders have made cuts to teaching staff for financial reasons, 70% said they had made cuts to teaching assistants and 72% to support staff. Primary heads also reported cutting teaching assistants (72%). This corresponds with findings from our reader survey. When asked to identify the areas with the greatest potential to make savings, 47% of SBMs said staff spend.

The Sutton Trust’s report observed that growing numbers of secondary leaders had also cut spend on IT equipment (61%), school outings (41%) and sport (28%), while almost half reported cutting subject choices at GCSE (47%)15. Classroom materials and CPD for teachers were also subject to cuts, according to the report.

Analysis published by the Education Policy Institute (EPI) in January found school budgets in England to be in a precarious state and that funding remains a significant issue16. School revenue balances in England found that schools are being effective in their efforts to adjust their expenditure to match their incomes – as reflected in a decrease in the proportion of maintained primary, secondary and special schools spending more than their income.

■ ��A crisis of funding, a catalyst for change In addition to changes in policy and legislation, funding is impacting how schools operate and, thus, their management.

■ Cutting spend without cutting resources, a smarter revolution A crisis of funding means that difficult decisions must be made. Staff spend is one area for potential savings, but schools are looking for alternatives and, although many have pared spend back to a minimum, smarter procurement could provide a welcome further solution.

■ Challenges to procurement Time is a resource that needs to be reclaimed. Our findings highlight a number of challenges within the technical process of procurement. Time restraints are also a factor hindering SBMs; smarter procurement is one way that SBMs can reclaim some time.

■ A case for quality, a drive for efficiency While cost savings are essential to managing blighted budgets, SBMs are seeking value-for-money purchases – quality products at the right price.

■ ���Developing a school-wide understanding of purchasing needs and power. Not only is procurement a task that most often falls to a school’s SBM, their responsibilities are only vaguely understood by the wider school community.

KEY FINDINGS

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SECTION TWO: FINDINGS

When asked to identify the areas with the greatest potential to make savings, 47% of SBMs said staff spend

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Spending remains an issue; 48% of primary, 54% of secondary and 45% of special schools spent more than their income in the 2016-17 academic year17. Reflecting this finding, 70% of our survey respondents said that funding was the single greatest challenge faced by schools and 73% ‘strongly agreed’ that, year-on-year, their school is having to do more with less funding and fewer resources.

Funding has become a catalyst for change in how schools operate, are managed and thus how they procure, all of which has impacted the SBM role. As financial management in schools becomes more complex, it requires more time and greater skills and SBMs are bearing the brunt of this. In Leading School Business18, which looks at the evolving role of SBMs, Dr Fiona Creaby observes “...the breadth of their role [is] increasing as accountabilities at school-level grow and policy reforms bring new challenges”.

So, in addition to covering the strategic and operational management of finances, premises and facilities management, human resources, line management and the professional development of all non-teaching staff, marketing and communications, SMBs are responsible for procurement. Pulled in every direction and under pressure to tread the financial tightrope, it is essential that they engage in smarter procurement.

CUTTING SPEND WITHOUT CUTTING RESOURCES, A SMARTER REVOLUTION Staff redundancies are by no means the solution schools are looking for. While the majority of SBMs told us that they had identified staff spend as an area where savings could, potentially, be made, 22% identified collaborative procurement with other schools and 14% pointed to better

contract management. Also cited were [better] procurement of education/office essentials (4%), facilities management (3%) and inventory management (1%).

The others said they were either looking at several areas, or that they had nothing left to cut – spending having already been reduced to bare minimum. This suggests that schools are finding creative ways to drive down the cost of procuring goods and services, but that obstacles remain. The SBMs we asked agreed that smarter procurement is important in making cost savings (51% extremely, 36% very, 13% somewhat important).

The Schools’ Buying Strategy, based on extensive research in this area, outlines a strategy to make £1 billion savings on non-staff spend per year by engaging in a smarter – or simply more informed and better supported – approach to procurement. The three key components of this are to:

1. ensure buyers in schools have the right relationships and skills;

2. support schools to be smart consumers – providing practical help and advice on buying decisions and contract management;

3. ensure buyers have access to the best value every time.19

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Pulled in every direction, and under pressure to tread the financial tightrope, it is essential that SBMs engage in smarter procurement

EDUCATIONEXECUTIVE

With regard to relationships and skills, we know that SBMs are engaging with peer-to-peer support networks; 92% of survey respondents said they find them a source of additional support and advice, 74% said they find them an opportunity to benchmark against/collaborate with other schools and 73% use them to keep up-to-date with latest regulations/changes. Others said they are a benefit to them and their schools – they are a means of sharing best practice and inspire better ways of working.

Being a smarter consumer requires an understanding of the individual school/academy and also the wider education market; SBMs will require access to the right information and advice in order to make better buying decisions and manage contracts effectively.

The DfE’s School’s Buying Strategy makes clear the importance of having access to ‘the best value’ – this means access to better deals, being able to compare goods and services – prices and quality – and, importantly, ‘using digital opportunities to make buying easier’.

CHALLENGES TO PROCUREMENT; TIME IS A RESOURCE THAT NEEDS TO BE RECLAIMEDInevitably, the path to procurement is laden with challenges. There are technical obstacles that SBMs must navigate; for example, when asked which areas posed the greatest challenge when it comes to procurement a significant 67% said ‘comparing products or services to get the best deal’ and 21% cited the time the procure-to-pay cycle takes to complete. The remainder were divided between managing the paperwork (5%), the order process (4%) and getting orders signed off (3%).

Time - or rather the lack it - was highlighted as a particular challenge.. In fact, 84% of to SBMs told us they

find themselves working extra hours after school, 82% over lunch, 63% from home, 51% before school and 17% at the weekend. Another time challenge identified was ‘unscheduled interruptions’; 61% of respondents strongly agreed, and 34% agreed, that unscheduled interruptions heavily impact their working day (2% either disagreed or strongly disagreed and 3% neither agreed or disagreed).

So, when asked whether time restraints or budget restraints pose the greater challenge to procurement perhaps it’s not surprising that 51% of survey respondents said time restraints while 44% cited budget restraints; in essence, SBMs are time-poor.

Our findings further suggest that smarter procurement is important to SBMs when it comes to making time savings; 43% felt it to be extremely important, 35% very important, 18% somewhat important with just 4% feeling it’s not so important.

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84% of SBMs told us they find themselves working extra hours after school

Being a smarter consumer requires an understanding of the individual school/academy and also the wider education market

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A CASE FOR QUALITY, A DRIVE FOR EFFICIENCY In Commissioning futures: a guide for schools, published by the Young Foundation20, the authors highlight the importance of considering ‘the broader social dimensions as well as the monetary cost of commissioning services’, drawing attention to the Public Services (Social Value Act) of 2012, which obligates those who commission public services to think about how they can also secure wider social, economic and environmental benefits21. Although this pertains to commissioning services to tackle inequality – which is not always a consideration when procuring – the core premise holds true when purchasing more broadly; where school funding is under pressure, it’s important that buyers can demonstrate true value-for-money and not just seek to secure a ‘cheap deal’.

The government supports this view. As set out in its Public Procurement Policy, when spending from the public purse – whether in schools, the National Health Service, or other – the priority must be to achieve value-for-money or cost effectiveness22. But what’s the definition of value-for-money? According to HM Treasury, value-for-money is not simply ‘the choice of goods or services based on the lowest cost bid’; it paints a broader picture which also considers ‘wider social and environmental costs’, as well as the benefits of service provision23.

We asked survey participants about their top considerations when procuring. The majority cited quality of product or service

(85%), closely followed by the cost of the product or service (68%), and the whole life cost of the product or service (47%). The efficiency of the procurement process (30%), the environmental benefit of the product or service (12%) and the brand (3%) all ranked lower for those responding.

DEVELOPING A SCHOOL-WIDE UNDERSTANDING OF PURCHASING NEEDS AND POWEROver the course of our research we noted a tendency to let the SBM fight the good-procurement fight alone, and a lack of understanding among the wider-school community of the commercial procurement process and its importance.

Dr Creaby's research, as presented in Leading School Business,24 reinforces this lack of understanding. ‘Research participants shared a strong concern around inconsistencies in the level of knowledge and understanding of business functions, governance and compliance in schools by senior leaders and teachers, and their subsequent value of SBP role and its contribution,’ she observes.

This is is also noted in the DfE’s Schools’ Buying Strategy – relating specifically to procurement and SBMs. 'They are often the only person who also has direct responsibility for commercial efficiency. Others in the school, such as teachers, do not always appear to understand the SBM role and the focus on commercial priorities. Often SBMs take encouragement and advice from their peers but, without an external network, it is much more difficult to learn more about the sector and the options in the market.'25

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Where school funding is under pressure, it’s important that buyers can demonstrate true value-for-money and not just seek to secure a ‘cheap deal'

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We sought to ascertain the levelof involvement of the wider school community in the procurement process, asking ‘How aware are teaching and support staff of the procurement process?’ More than half (56%) of respondents agreed colleagues were aware of the school’s procurement process and 34% said that colleagues believe there is an infinite money tree! Only 11% of SBMs said they’re aware of, trained and involved in the school’s procurement process.

Taking a closer look, the survey revealed that, while for most involvement varied with the size of the procurement (70%), 21% said that their headteacher was involved in product or supplier decisions, 20% of SBMs said they took sole charge of such decisions, 13% said they received input from both the SLT and headteacher and 5% from their SLT.

Looking at contact with teachers in relation to classroom product requests, 39% of respondents said that they

engaged weekly with teachers and 23% said only when there’s an issue. Daily contact (22%), monthly contact (13%) and in relation to a unique product (2%) made up the remaining responses.

In terms of where SBMs look for support and advice with regard to supplier choice, our findings show that SBMs are most likely to trust their peers (79%); 47% cited the school head, 30% turned to support staff and 28% said the SLT. Just 5% of respondents said none of these.For smarter procurement to be embedded in a school’s culture requires a school-wide understanding of the procurement process and why it’s there.

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More than half (56%) of respondents agreed colleagues were aware of the school’s procurement process and 34% said that colleagues believe there is an infinite money tree!

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INTRODUCTIONThe government wants schools and academies to ‘get the best value for every pound spent’ and to make savings on the sector’s current £10 billion non-staffing costs. However, many schools have already pared their spend back to the bone, so where can additional savings be made? This is not just about cost savings; it’s about winning back time on the procurement process that can be spent elsewhere.

This section combines sector research with the findings of our survey in order to define a procurement process fit-for-purpose – a smarter procurement process.

A NEW KIND OF BUSINESS LEADER; BUILDING THE SKILLSIn his paper Behavioural procurement26 David Loseby concludes that buyers need to understand that ‘behaviours play a big part in decision-making, irrational decisions have an explanation and that behaviours are the enabler of better outcomes’. Tradition can hamper progress and, in some instances, SBMs still contend with a reluctance in the sector to adopt a more business-like approach to managing schools; this is often paired with a lack of understanding of the work they do. However, attitudes are changing with the professionalisation of the role and we are seeing SBMs assuming greater accountability and subject to greater expectations27.

Often schools lack the sufficient number of highly-qualified and experienced procurement professionals required to develop and implement an effective procurement process. Professional development is an essential step towards strengthening the procurement knowledge and expertise of current staff. Improving procurement practice not only ensures compliance, it saves money and, by streamlining the process, shortens the procurement cycle.

SECTION THREE: RECOMMENDATIONS

■ A new kind of business leader; building the skills Developing the necessary skills to manage growing financial challenges, policy changes and increased responsibility – investing in professional development.■ Understanding your school and the wider sector Making the right decisions requires a deep understanding of both the school and the sector as a whole – review, benchmark, know your contracts and your suppliers. ■ Attention to process, streamlining procurement Purchasing can be time-consuming and so can overcoming the challenges it presents; concentrate your resources and reclaim your time by streamlining your process.■ Sourcing quality; a value-for-money approach to procurement Achieving value-for-money is about more than lowest cost; it’s about sourcing quality goods or services; savvy procurement sources.

KEY RECOMMENDATIONS

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SBMs still contend with a reluctance in the sector to adopt a more business-like approach to managing schools

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To build up these skills requires proactive engagement in continuing professional development (CPD). CPD has a real and positive impact on school staff and the organisations they work in – improving business decision-making as well as standards and outcomes for students. A 2018 survey conducted by the Outstanding Leaders Partnership (OLP) found that 80% of respondents (school leaders) planned to maintain or increase levels of CPD investment in their staff, while 94% said they would benefit from additional support and professional development – despite budget and time pressures28.

We found that 32% of SBMs felt there were good levels of CPD and training readily available to them and 55% said they were available if pursued. However, 13% said this resource was not readily available to them. The OLP’s report suggests that this is, in part at least, down to time and budget constraints.

Digging deeper we sought to identify where SBMs are turning to further their learning; 77% of survey respondents said training courses, 69% events, 98% look to their peers, regional (53%) and national (31%) groups are also a source of support, with a significant number getting their learning online.

Given the breadth of the role, how can SBMs focus their CPD so it’s most relevant to their needs and those of their schools? There are the traditional ILM accredited programmes known as Level 4 and 5 Diplomas in School Business Management, and there is also a more modular option through which those with specialisms can broaden their skills and expertise.

ISBL’s ‘Professional Standards’29 provide a comprehensive blueprint for effective school and academy business leaders, and is a great starting point when looking for potential skill development areas.

In partnership with the Best Practice Network, ISBL has developed a self-assessment toolkit30, which is a useful way of identifying areas for development and also the best CPD routes to pursue these.

There are also good online CPD solutions – for example, the DfE’s Buying for schools resource31. It’s worth noting that there has been an explosion of organisations ready and willing to share their knowledge outside of their paid services via online platforms, white papers, blogs and vlogs, social media and even face-to-face conversations. SBMs are a resourceful group and adept at finding sources of knowledge and information.

UNDERSTANDING YOUR SCHOOL AND THE WIDER SECTOR Driven by need, limited by budget and in a market saturated with choice, the key is developing a better knowledge of what to buy and when. Understanding the school or academy’s needs and spend is the first step; useful information on financial management can be found on the Gov.uk website under the ‘School and college funding and finance’32 heading.

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32% of SBMs felt there were good levels of CPD and training readily available to them and 55% said they were available if pursued

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The conundrum of knowing which products to buy – and how often – can pose a challenge to effective procurement. Prices can vary dramatically and, although shopping around can save money, it’s difficult to wade through all the available options. In fact, when asked about the greatest procurement challenges, 67% of SBMs said ‘comparing products or services to get the best deal’.

So, where to start? Based on our research the following are some essential steps in smarter procurement.

Review A good place to start is evaluating who the school's suppliers currently are, what is being bought from them and how much this is costing. If possible, the number of suppliers worked with should be reduced; this is a savvy step which can lead to economies of scale as buying in bulk can often mean buying at a discount. This approach also reduces the number of purchase orders raised and invoices received to be processed, saving time. Finding a single supplier – one that the SBM can trust, and from which the right goods at the right price can be procured – can be worth the search. SBMs need to be smart consumers.

Benchmark and compare Shopping around and comparing suppliers is a useful exercise that can result in increased efficiency and cost savings. Some organisations and platforms will do part of the hard work for SBMs by benchmarking the goods they offer. SBMs should also consider sharing their benchmarking data with other schools, and looking at their

benchmarking data too, because this can help to determine areas where there is scope to procure smarter – improving efficiency, reducing costs and identifying areas for further potential savings.

Contract management CIPS defines contract management as follows: ‘[It] is a continuous procurement process that ensures suppliers adhere to their agreed contractual obligations along with negotiating any future changes that need to take place.’33 Even if you secure a good deal, the benefits can be lost through poor contract management ; schools have numerous contracts with various suppliers and managing these can be tedious and time-consuming without an effective process in place. Any such process should include appropriate mechanisms to report performance, manage changing requirements and deliver continual improvements, CIPS advises.

Supplier relationships Building a strong relationship with suppliers can result in longer-term rewards. It puts the onus on them to maintain performance, helps avoid disputes and also gives SBMs the opportunity to feedback on the service provided so that suggested changes are implemented to the school’s benefit. A good working relationship with suppliers means that they can gain a better understanding of a school's particular needs - and so work to meet them. (Hot tip from GLS – SBMs should not be afraid to push back if they're not getting the service they need!)

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When asked about the greatest procurement challenges, 67% of SBMs said ‘comparing products or services to get the best deal’

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ATTENTION TO PROCESS, SAVVY AND STREAMLINED PROCUREMENT When asked how the procurement procedure could be streamlined when purchasing day-to-day items 44% of SBMs agreed that automating the purchasing process would help them to streamline.

The ability to repeat orders quickly was also highly favoured (40%), as was enabling staff to add to an online ‘shopping basket’ (32%). Pre-approved vendors also ranked highly (30%) as did improved purchase scheduling (23%).

With this in mind, we looked at the benefits of e-commerce in school purchasing, the rise of Amazon-like platforms and their benefits. We have already noted an increase in schools using functions such as Amazon Wish List to acquire necessary resources for their schools; could the same concept be applied to the regular purchase of resources?

The CIPS definition of e-procurement is, ‘The combined use of electronic information and communications technology (ICT) in order to enhance the links between customer and supplier, and with other value chain partners and, thereby, to improve external and internal [production and system management] processes.’34

Part three of the National e-Procurement Project, published by the Centre for Procurement Performance and supported by the department for communities and local government, categorises the benefits of e-procurement as cashable and non-cashable. Cashable benefits result in a reduction in expenditure while non-cashable benefits free up staff from a task – although the report points out that, ‘...the time saved for each staff member is not large enough to result in a reduction in the number of staff required’35. The paper also notes that, ‘around

60% of the cashable and non- cashable benefits are derived from good procurement practices and 40% from e-procurement technologies (such as e-purchasing). It is, therefore, the combination of good procurement practice and e-procurement technology that will deliver maximum benefits for a school’36.

When we asked if their schools have benefited from the use of e-commerce sites to procure products 40% of respondents said they do not use them. Of those who did, 34% said it had resulted in cost savings, and 31% said it had resulted in time savings. Better management of the procurement process was identified as a benefit by 10% of respondents and 4% said it had resulted in a better, school-wide procurement process. Just 8% told us there were no obvious benefits.

For those who use it, when asked if the use of e-commerce sites improves the procure-to-pay cycle, 47% said it reduces the time taken to collate and submit an order and 35% said it makes it easier to compare products and process. Streamlining of the process so there is less room for human error was cited by 30% while 16% said it makes it easier to submit repeat orders and 15% said it saves time on the order approval process.

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44% of SBMs agreed that automating the purchasing process would help them to streamline

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Clearly, there are benefits to be had from choosing to streamline via e-procurement. In order to be certain that an e-procurement process is effective, SBMs should ensure that the chosen system provides:

■ an audit trail that is available at all stages of the transaction process, from request through to receipt of goods/services and payment;

■ complete visibility of the transaction throughout – which means that information is available regarding who raised the transaction and who has been involved at each stage – for example, the person who approved a purchase;

■ adequate controls and security; ■ a separation of duties so that the member

of staff cannot raise a purchase order, approve that purchase order and also authorise the invoice for payment;

■ e-procurement procedures which are aligned with guidelines for public procurement37.

SOURCING QUALITY; A VALUE-FOR-MONEY APPROACH TO PROCUREMENT When asked, ‘How do you ensure that you are procuring the best resources at the best price?’ 54% of survey respondents cited establishing contracts with suppliers while 42% chose the need to engage in strategic collaborative procurement. Other highly rated options were establishing a governing procurement process (31%), using technology to procure/manage procurement (30%), while 23% felt that a focus on the total cost of ownership, not price, was most important.

Establishing contracts with suppliers While much depends on what is being procured, and the value of the contract, there are a few steps that will take a school to the point of effectively establishing a contract with a supplier. The Key for School Leaders suggests that a detailed specification should be crafted; this will provide a precise description of what is needed, how it should meet the school’s needs, the quantity and quality required, when it is needed – and that the whole-life cost of the contract should be established 38.

Engage in strategic collaborative procurement According to Effective school partnerships and collaboration for school improvement, there is evidence that inter-school collaboration can result in improvements in areas such as staff professional development and career opportunities, the sharing of good practice and innovation, reductions and realignments in headteacher workload (alleviating burnout and facilitating succession) and organisational and financial efficiency39. There are some key conditions that foster effective inter-school collaboration - for example, leadership, structures, processes, relationships, communication and context.

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Deals and frameworks These can provide an easier purchasing process by setting out the terms under which individual purchases can be made by schools, especially in relation to price and quality. This works in a variety of ways, from enabling a SBM to compare prices, to even running a competition between suppliers if the tender is larger. The DfE has established ‘Deals for Schools’ to make this easier for time-strapped SBMs 40. Suppliers have also developed deals and frameworks and it can be productive to ask about these – if they don’t suit your school’s needs it’s worth asking if they can be adapted. The Key provides detailed guidelines for those wishing to embark on the procurement process41.

Own brand Purchasing own-brand products can result in savings. When asked about the importance

of brand when purchasing 47% of survey respondents felt that it was not so important while 39% said it was somewhat important. A small proportion responded that it was not at all important (12%) and the remainder said it was either very or extremely important.

Looking more deeply into own-brand product preferences, we asked what would lead SBMs to choose one. They told us that the quality of the product, cost savings, peer reviews, trust in the supplier and a ‘try before you buy’ option would lead them to choose an own-brand product.

The DfE’s Review of efficiency in the schools system42 sets out some of the practices shared by efficient schools and reinforces this with actions which schools can implement to realise

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greater efficiency in procurement.

In navigating the challenges of budgetary limitations, SBMs have scrutinised how money is spent, benchmarked finances - as advocated by the DfE43 - and have availed themselves of procurement frameworks for everything from capital expenditure to energy and catering, all with a single goal: to ensure value-for-money and to make financial savings that can be re-invested in their schools.

In the current financial climate and operating context, it’s paramount that schools are able to achieve value-for-money. Smarter procurement is at the heart of this.

Smarter procurement has evolved to address and ameliorate many existing procurement challenges. It is designed to simplify the purchasing process to ensure that better, more efficient decisions are made. Smarter procurement ensures that goods and services are fit-for-purpose, suppliers deliver as agreed and financial obligations are complied with. Ultimately, this results in financial savings that can be re-invested in schools and time savings that can be reallocated elsewhere.

Over the course of the research conducted for this paper, and the findings from our reader survey, it has become evident that the funding challenges faced by schools are changing how they operate and are managed. Procurement, always essential, has become pivotal, and the challenges faced by SBMs in this arena are more than technical; in addition to budget constraints, a lack of time to focus on purchasing is hampering the process. To this end, it is time which we defined as the major focus in our delivery of a smarter approach to procurement.

Our findings show that there has already been an energetic drive towards finding solutions to current budget difficulties but also a strong suggestion that, for many schools, these avenues have been exhausted – they are already cut to the bone. Nevertheless, there is still room for improvement; greater understanding and use of e-procurement/smarter procurement, enhanced CPD for both SBMs and their school colleagues, and even more collaboration – within schools, between schools and with suppliers – may yet lead to savings in both time and costs.

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CONCLUSION

Smarter procurement has evolved to address and ameliorate many existing procurement challenges

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(1, 6) 2018 annual report on education spending in England, Institute for Fiscal Studies (2018)(2) Supporting excellent school resource management, Department for Education (2018)(3) Financial sustainability in schools, National Audit Office (2016)(4) Unexpected school reform: academisation of primary schools in England, LSE research online (2017)(5, 18, 24) Leading School Business, Institute of School Business Leaders (ISBL) (2018)(7) Education funding, National Education Union (NEU)(8) School cuts data, School Cuts(9) The true cost of education, Association of School and College Leaders (ASCL) (2019)(10) National funding formula, Department for Education (2018)(11) Next year’s school budgets are ‘not generous’ says DfE funding chief, Schools Week (April 2019)(12) A bridge too far? University of Kent, (2018)(13) More than 1,000 English schools turn to online donations to raise funds, The Guardian (April 2019)(14, 15) School funding and pupil premium 2019, The Sutton Trust (2019)(16, 17) School revenue balances in England, Education Policy Institute (EPI) (2019) (19, 25) Schools' Buying Strategy, Department for Education (2017)(20) Commissioning futures: a guide for schools, The Young Foundation (2018) (21) Public Services (Social Value) Act, Gov.uk (2012)(22) Public procurement policy, Gov.uk (2018)(23) The Green Book: appraisal and evaluation in central government, Gov.uk(26) Behavioural Procurement - the evolution of the principles established in Behavioural Economics, Chartered

Institute of Procurement & Supply (CIPS) (2016)(27) School business managers: the negotiation of professional identity, NASBM (now ISBL) (2016)(28) Outstanding Leaders Partnership (OLP) survey, OLP, Best Practice Network and the University of Chester (2018)(29) Professional Standards, ISBL(30) Professional development; self-assessment tool kit, ISBL and Best Practice Network(31) Buying for schools, Gov.uk(32) School and college funding and finance, Gov.uk(33) Contract management cycle, Chartered Institute of Procurement and Supply (CIPS)(34) P&SM: eProcurement, Chartered Institute of Procurement and Supply (CIPS)(35, 36, 37) National e-Procurement project; Delivering e-Procurement, Part 3, The Centre for Procurement Performance(38, 41) How to buy goods, works or services, The Key for School Leaders (2019)(39) Effective school partnerships and collaboration for school improvement: a review of the evidence, Department

for Education, Armstron, Dr Paul (2015)(40) Deals for schools, Gov.uk(42) Review of efficiency in the schools system, Department for Education (2013)(43) Schools financial benchmarking, Department for Education

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REFERENCES

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