Fiscal growth

Federations and other partnerships are changing the way schools manage their procurement services, says Sarah Monk, enabling them to save money but also improve performance.

A number of key documents have been published over the last 12 months alerting schools to the need to prepare for a much more difficult financial future.

The first was the government's White Paper Your Child, Your Schools, Our Future, published in June 2009, which promoted the notion that schools should work in partnership in order to raise standards. The paper also introduced changes to the role of the school improvement partner (SIP), as well as the demise of the centrally funded National Strategies, thereby heralding the arrival of a new commissioning role for the local authority.

It was followed by a report from the Audit Commission in July 2009, Valuable Lessons: Improving Economy and Efficiency in Schools which said schools could save £415 million through smarter procureme nt and was accompanied by some frightening examples where poor procurement practice had resulted in significant financial cost. It outlined six areas that schools should consider focusing on:

• assessing the financial implications of their plans

• reviewing of the financial surplus (or deficit)

• ensuring that the goods and services they buy represent value for money

• using the school workforce to best effect

• collaborating with other local schools

• using data and information to improve decision-making

In November 2009, the DCSF published the discussion paper, Securing our Future: Using our Resources Well, which looked at the impact of reduced funding for schools. It urged leaders to focus on finding opportunities for cash savings and more efficient practices in three areas: procurement and technology, resource use and financial management, and partnership and shared services.

The final document to hit our in-box was Investing for the Future, Protecting the Frontline, published by the DCSF in March. It was aimed at moving the debate on further and provided some useful ideas and tools for schools around efficiency and value for money, as well as a change in regulations to provide greater flexibility for schools wishing to pool budgets.

The common message in all of these publications is the need to work in partnership if we are to continue to fund improvement priorities and offer a diverse and engaging curriculum. As things stand, all schools are expected to secure 0.9 per cent in efficiency savings set against a real terms increase of 0.7 per cent - meaning that working in partnership may be the least painful way of balancing your budget in the future.

In my role as school partnership director with the Place Group consultancy, I have been working with a number of partnerships to look at how they can start to prepare now for less money in the system and ensure that there is no need to compromise on school improvement.

Business opportunities

In Wokingham, Place Group has been working with seven secondary schools and two special schools which already have a partnership arrangement - and a collective spending power of £45 million. The group employs a joint coordinator from Place who organises partnership meetings and other activities across the schools. They hold joint CPD days, planned well in advance, which focus on training and development priorities identified by the schools and on the needs of the federation.

A recent financial review pinpointed four key areas where there were opportunities to save money through economies of scale and cutting out duplication. These were: ICT infrastructure and technical support, school business management, human resources management, and curriculum costs.

Joint procurement in ICT, for instance, saves all nine schools from going out to tender and means that they will secure a better price through increased purchasing power. In business management, meanwhile, there is potential to generate income by providing business management support to feeder primary schools.

Another avenue the partnership will be looking into is developing new models of delivery, such as a school company which could market services locally and nationally to other schools and local authorities (LAs). Under the new commissioning model, the LA could commission the partnership's company to provide services to another school, for example. Or in the future a school company could be on a list of approved suppliers that SIPs draw on when brokering support to schools.

Streamlining activities was also a factor for a group of seven academies in Manchester which are working, through their group of financial directors, to develop a shared approach to procurement of a number of services. They include cleaning, catering, building and grounds maintenance, HR, payroll, specialist education support, governance and legal services.

Collaboration can be difficult for schools to get to grips with, so it is in areas like these where an independent facilitator can help to analyse current provision and cost and ensure 'fair play' so that each school can see the proof of how working together will benefit them.

This work is still in its early stages, so hard facts about financial savings are not yet available. However, all the schools' financial directors are clear on the immediate benefits in terms of the time saved by working together, rather than pursuing the same ends individually, and feel confident that the procurement process will produce financial benefits.

Central supply service

In Birmingham, a study of ten secondary schools showed that £1.5m could be saved in a three-year period by running a central supply teaching service. By using known specialist subject teachers within a quality assurance framework, the quality of the teaching and learning was also expected to rise.

The work also revealed that some £600,000 could be saved across the schools by collaborating and managing staff training and CPD centrally. An added bonus was that staff across the schools would build stronger relationships: following a common accredited development path would enable them to work together, share expertise and collaborate in resource development and lesson planning across the ten schools.

ICT is another potential area for savings. Place carried out an extensive research and audit programme of ICT spending and attitudes towards adoption in some 40 secondary schools across two London LAs. One of the key metrics that this work has generated is a comparative view of each school's annual ICT spend per student, both on investment and revenue. Core elements of the audit and final report included:

• supporting schools to complete the Becta self review framework (SRF) by schools

• supporting schools to complete Place Group's ICT technical audit and ICT total cost of ownership (TCO) questionnaire

• development of an ICT preparedness matrix tool readying schools for participation in the Building Schools for the Future (BSF) programme. The tool looks at all aspects of ICT, including infrastructure investment, curriculum offer and technical expertise.

• creating and facilitating a network of ICT change advocates among schools in each borough

Hard federation

Schools in hard federations perhaps have the most flexibility in terms of joint spending power. Darlington Education Village, established in September 2005, is a hard federation made up of a secondary, a primary and a special school. The three are still funded as separate legal entities but pool their budgets to provide collaborative spending power of £10 million. I oversee the budget for the federation and present it to the governors for approval.

Collaboration has enabled economies in key areas. For example, a review of service level agreements has been carried out and there have been renegotiations with some service providers. In areas such as human resources and leadership support, the schools have switched suppliers to secure a more cost-effective service and one which is better tailored to their needs.

The federation partnership has proven even more powerful in terms of building a shared and inclusive ethos. Students from all three schools have access to wider opportunities as a result of many of the staff working across all phases, and through the flexible use of facilities and curriculum resources.

Exam results have also improved. In 2007, the proportion of students gaining five A*-Cs at GCSE was 31 per cent. In 2009 it was 76 per cent.

Especially in the current economic climate, the need to collaborate and work in partnership has never been more clearly communicated from central government. What is also clear is that this is very much a strategy that must be driven from the bottom up - with schools firmly in the driving seat.

The first step towards partnership is to establish a common goal: there can be no more compelling reason to save money than a desire to reinvest it for a greater good of the students in your community.

Sarah Monk is school partnerships director for Place Group. She was previously viceprincipal business strategy at Darlington Education Village federation.

Further information

Place Group provides education consultancy, programme management and delivery services. For further information email Sarah Monk via sarah.monk@place-group.com