In this article Jerry Meldrum, Pelican’s Education Lead and Chair of Governors and Trustee within a North London MAT, tackles the issues school trusts need to manage around procurement – and how the School Resource Management Assessment and SRMSAT process can help.
Learn how to maximise the opportunity to increase unrestricted funds – something trusts often miss. There are ideas to achieve the best value when considering long- and short-term objectives; and thoughts on how to avoid non-compliance issues, when allowing schools to do their own purchasing.
What Trustees, Accounting Officers and MAT leaders should know
Far more than a simple checklist, the April submission of the SRMSAT provides MATs with an excellent opportunity to review their due diligence processes that ensure they deliver the best outcomes for their communities and remain compliant with legislation and indeed, this tool is generally the output of a process of school resource management assessments, sometimes conducted by DfE appointed School Resource Management Advisors.
Accounting Officers, Trustees, Directors and School leaders should be rigorous and relentless in using this review, as great benefit can be gained from its insight.
Of particular importance and where a lot of misunderstanding occurs is covered within section E of the SRMSAT, which covers “Value for Money”.
This section can often be overlooked because schools usually follow procedures set by the DfE. While those procedures are sound, schools stand to gain a lot by reviewing their procurement practices in this section as a priority, as they can boost their unrestricted funds, and lower their overall costs.
Section E is divided into 5 categories, so let us look at each one in a bit more detail.
32. Benchmarking
Benchmarking can be a complicated, labour-intensive process for trusts and schools. In addition, the process of Benchmarking may often use published data that is historic, leading to inaccurate comparisons.
It is often more efficient and less time-consuming for trusts to compare overall category expenditure against similar trusts through the DfE tools provided, rather than comparing the fine detail of invoices and comparing that against a wider market of institutions and this approach can also affect accuracy.
As ever, the devil is always in the detail and, where possible, trusts should compare every individual price they pay and open that comparison to the widest market they can to gain a true reflection of their spending. However, with everything else trusts need to do, this is nearly impossible to do internally.
You’ll note my use of the word market above. Trusts stand to gain more by comparing pricing against the whole purchasing market, not just what other schools pay.
Consider this example below:
- School A spends £100k annually on stationery with only one delivery per month
- School A compares its pricing to School B, which spends £60k annually on stationery with one delivery per week.
In this scenario, it is likely that school A would come out with better pricing and would believe that it achieves good value for money.
School A, would actually do better to compare itself to Accountancy firm C who also has an annual spend of £100k and also only has one delivery a month.
DfE tools do not allow comparison against other businesses. When reflecting on this and fact that data can be a year out of date, MATs and trustees should be mindful about accepting results from these sources as being completely accurate.
Trustees and MAT leaders could instead use tools to compare their pricing against wider purchasing markets and comparable organisations, remembering that simply comparing against other schools may not provide the best outcomes.
33. Legally compliant purchasing procedures that generate value for money
As publicly-funded bodies, MATs need to ensure that they are following compliant purchasing processes and evidencing that they are achieving the best value in all areas of spending. Indeed, this requirement is of benefit to a MAT because it allows them to achieve economy-of-scale value and define objectives for purchasing which support the aims of the trust.
In practise, compliant purchasing can sometimes be regarded as a bit of a drain on resource for MATs, rather than an integral part of their overall operational strategy. To answer this, occasionally MATs look for the easiest option, which can result in non-compliant purchasing but can also mean that opportunities to support better operation through robust procurement can be missed.
In my experience, opportunities that can be overlooked usually represent smaller values, that continue to be purchased separately by each school. For example, I often find that cleaning supplies, catering supplies, washroom supplies, stationery and so on are purchased independently, yet regularly from the same supplier. In this scenario, when these individual purchases are taken as a total spend across the trust, spending can often breach public procurement spending thresholds which can raise compliance questions from the ESFA but will also generally mean that the MAT is not achieving best value.
MATs are often guided towards DfE negotiated national frameworks to answer issues in spending categories such as those mentioned above and, indeed, this can be an effective short-term solution to achieve compliance and they offer an easy way to gain some benefit. As such, depending on the operational demands at the time, Frameworks are a viable option that are worth considering.
Frameworks will have generally already enacted a public procurement tendering exercise to create a list of three or four suppliers in specific categories which trusts can access and utilise for a fee. Trusts then choose and purchase from their preferred supplier on the list in a compliant way with theoretically advantageous pricing.
However, depending on how these product categories are managed, frameworks can begin to raise questions when thinking for the long term. By their inherent nature DfE promoted national frameworks are usually:
- Off the shelf – meaning not bespoke to individual MATs current purchasing needs
- Supplier limited – limited suppliers are available to choose from, meaning much of the market can be excluded.
- Limited in product scope – meaning that the products available at the deepest discount may not be what a trust actually buys.
When assessing the value for money processes, it is always worth reviewing how well framework arrangements are fitting with the ever-changing requirements of a MAT. Where a trust is generating enough volume itself, a viable alternative to the framework solution could be the types of competitive procurement exercises trusts are more accustomed to enacting with larger service contracts.
When I consult with Trusts and in my own remit as a trustee, I always recommend that competitive pricing exercises should be considered when dealing with lower-spend categories and when thinking of the long-term aims for procurement and operations.
This approach can offer several distinct advantages
- Creation of bespoke pricing based on what a trust buys, and their specific service requirements – which usually leads to better pricing and better value for money.
- Can allow a trust to define the scope of an overall procurement strategy to ensure it supports the operational goals.
- Can create trust-centred contracts and SLAs that trusts can use to then manage supplier performance.
- Bring compliance when proper tendering processes are followed.
Exercises like these are a powerful tool to drive best value from the market and suppliers, both yielding immediate and ongoing results; offering a way for Trusts to unlock previously unreachable yet valuable unrestricted funds, and ongoing best value and service from their successful suppliers.
On the flip side, this approach shows tangible and transparent evidence of a trust’s approach to generating the best value for money and therefore, offers significant comfort and limited recourse to question the purchasing practices of a trust and its processes for ensuring funds are best spent for the benefit of pupils.
3. Collaboration within and between Trusts to gain the best value
The Kreston Academies Benchmark Report 2021 again advocates that trusts should collaborate more, and within most MATs there has been a strategy to centralise services.
MATs now generally recognise the benefits collaboration brings in terms of efficiency, reduced cost, the sharing of expertise and experience.
Alongside services, trusts are also now quite used to centralised larger product category contracts which bring with them economy-of-scale value and purchasing compliance.
In practise, collaboration still tends to only go so far before stalling. This is often due to pressure from individual school stakeholders who fear losing autonomy in their day-to-day decisions, and due to lack of time MAT leaders have to establish collaborative buying processes.
While the concern of individual stakeholders should never be ignored, purchasing collaboratively does not need to mean a loss of autonomy for individual stakeholders and there is an argument to say that even if it did, it would be wrong to continue to purchase in a way that does not deliver best value for the Trust operations.
As mentioned, trustees and MAT leaders should always explore where collaboration could bring economy-of-scale value, compliance and, often, significantly better service – alongside agreed contracts and SLAs and efficiencies from reduced workloads.
A robust market competitive benchmark, as detailed above, would give Trustees and MAT leaders the evidentiary guidance towards the areas of spending that would benefit from economy-of-scale collaboration to bring best value. Therefore, as part of a larger strategy trusts should aim to ensure that reviews take place in all areas of spending across Trusts, to establish which areas have been missed that do not deliver value for money and render them as non-compliant.
It is also worth noting that trusts can collaborate externally to increase their economy of scale. It is possible for trusts to run under two separate contract agreements that will meet each Trust specific needs.
36. DfE National Frameworks
It is worth reiterating that DfE national frameworks are not tailored to individual MAT requirements and the deepest discounts can often be on products your individual MAT does not buy. In addition, national frameworks often lock out local suppliers meaning MATs have limited scope to engineer a purchasing process to benefit their local community.
While it is an easy way to ensure compliance, Trustees and MAT leaders should always look at what else is out there. The Kreston Academies Benchmark Report strongly advises trusts to continually seek best value by approaching various organisations in the market, and as a trustee myself, I advocate that this is a wise approach to continually ensure trusts are achieving best value.
In short, where a MAT can tailor their procurement process to give access to the full market of suppliers, they should, as this will generate the best outcome for all.
An excellent article on the merits of Frameworks has been discussed by my colleague Simona here
To conclude
The drive to ensure value for money is well ingrained within MAT leadership culture and MATs do all they can with the tools provided and time available to evidence this.
However, as mentioned, the tools provided can be limited in their scope and sometimes do not show the full picture. As a result, MATs could be missing significant saving and efficiency opportunity by only seeing these as the single source of truth.
The SRMSAT and the general process of School Resource Management Assessment is an excellent time for Trustees and MAT leaders to challenge the status quo in their MAT’s purchasing. MATs will only stand to gain real benefits by reviewing each SRMSAT point and critically assessing processes and procedures to ensure that they are both compliant with purchasing regulations and continually purchase in a way that brings best value to their communities.
By accepting that good procurement strategy supports long term excellent operational outcomes and that, indeed, proper purchasing can support all areas of MAT life, MATs can begin to delve into the detail with more authority and assurance that they are doing this to achieve a bigger goal, rather than simply to adhere to regulation.
This process will invariably identify ways to reduce cost, and will often find surprising ways to gain efficiency, control and visibility where previously this may have seemed unachievable, strengthening a MATs operation and enabling it to better weather any future storm that may come its way.
