As the government warns schools to start planning for a period of austerity, David Gordon rounds up essential information to help your school prepare for the future

How well will your school cope with a financial squeeze?
With times of austerity and cuts in public spending expected whichever party wins the General Election, schools are already being warned to plan for living within tighter budgets.

Even the current budget settlement, which runs for two years until 2012-13, only translates to an above-inflation increase if schools are able to make so-called efficiency savings of more than £1billion over that period.

So, what can schools do to prepare themselves for a future where funds will be increasingly stretched? Fortunately there is no shortage of advice – and the government is at the forefront of those offering it.

At the end of November, in a speech to the annual conference of the Specialist Schools and Academies Trust, the Secretary of State, Ed Balls, said that headteachers, governing bodies, Schools Forums and local authorities needed to work closer together urgently to plan properly for the coming years. He flagged up better procurement, stronger financial management and effective school partnerships as the keys to giving taxpayers ‘best value for money’ and challenged the schools sector to have an honest and vigorous debate about making the best use of resources in the face of more challenging public finances.

To help inform that debate, the DCSF has published a discussion document, Securing our future: using our resources well. It sets out the issues under four headings:

  • procurement and technology;
  • resource use and financial management;
  • partnerships and shared services;
  • the role of national and local partners in supporting schools.

Procurement is an area where the government sees scope for significant savings from the £7bn to £8bn that schools spend annually on non-staff items.

Collective buying is seen as offering great scope for better value for money and the document cites recent studies that have shown potential in areas including ICT procurement, facilities management, energy contracts, the use of supply agencies and photocopier contracts.

The DCSF is encouraging schools to improve their procurement by signing up to its Online Procurement for Educational Needs system (OPEN). The system operates in much the same way as consumer websites, such as Amazon, calling up available items from a range of suppliers to match search criteria. Schools can register for OPEN and see a demo of how it works at www.dcsf.gov.uk/open

A range of advice to help schools get the best value from their purchasing can be found at the Educational Procurement Centre (EPC), which is part of the Teachernet website at www.teachernet.gov.uk/management/epc/

It summarises its advice in these ‘top 10’ tips:

1. Develop procurement expertise
Nominate and train someone to coordinate everything centrally.

2. Plan ahead
Identify your requirements early to get the best deal

3. Know your own power
How much can you spend, are there limits?

4. Don’t buy unless you need to
Does anyone have a spare?

5. Don’t spend hours saving a pound
Consider the total cost of procurement.

6. Look for alternatives
Branded products may not always be the best.

7. Improve your buying power
Work with your local consortia or authority to get a better deal.

8. Negotiate, negotiate, negotiate
Get the best deal for your money.

9. Get it in writing
Read and understand the small print.

10. Share best practice
If you’ve got a good deal, share it!

Energy supplies are another area where the government believes schools can save money and it is bringing in a number of measures to help schools become more energy efficient. One is the provision of free energy display meters, which schools can register for online at www.energydisplaymeter.co.uk

Another initiative is a fund to offer interest-free loans for the installation of around 80 different energy efficient technologies, including building insulation, boiler and lighting upgrades and IT energy efficiency improvements. Eligible schools can apply for a loan from the £54.5m fund, which is administered by Salix Finance. Any loans awarded must be repaid within five years. Local authorities should be able to advise their schools on how to apply for a loan. More details of the scheme can be found at www.salixfinance.co.uk/home.html

The discussion document also places a strong emphasis on the importance of strong financial management and reminds schools of the framework set out in the Financial Management Standard in Schools (FMSiS), which all schools are expected to meet by the end of March this year. It also encourages schools to make good use of the DCSF’s benchmarking website to help check their financial performance against that of similar schools.

The government is also offering practical support for schools through its free Value for Money (VfM) national consultancy programme, from which more than 1,000 schools have already benefited. All maintained schools in England are entitled to a one-day visit by a consultant who will work with a group of school leaders, which can include the head, the business manager and the chair of governors, on the school’s own choice of two of the six VfM themes. These are:

  • Wider school workforce – how schools plan and manage their staffing.
  • Strategic management – how schools approach financial and resource management, including linking the two with school improvement.
  • Collaboration and partnership – how schools work together, and with other organisations, to improve outcomes.
  • Leadership – how much time and experience school leaders have to focus on delivering value for money.
  • Challenge and Governance – the role of the governing body in supporting delivery of value for money.
  • Procurement performance – how schools approach procurement.

Details of the service can be found at www.consultancyforschools.co.uk/

The DCSF is asking for comments and contributions in response to the discussion points raised in Securing our future. But, in the meantime, it summarises the steps that schools can take immediately as:

  • Investigate schools in their locality that are working in partnership and sharing services and learn about their experiences and the benefits that they have secured. Alternatively schools can talk to the National College about their federation pilots and School Business Director demonstration projects.
  • Governors discuss whether they are taking full advantage of the scope for collaboration with other schools, and how they can do better for the school and its pupils by doing so.
  • Benchmark expenditure against local and national comparators using the DCSF benchmarking website to see if there are unusual patterns of spending that might suggest potential areas for investigation and improvement.
  • Contact Avail VFM consultancy services to benefit from the help they can provide in analysing the school’s finances and suggest ways of getting better value for money.
  • Visit the OPEN online procurement system and investigate how it might help to save time and money in procurement or explore collaborative procurement arrangements such as those offered through the Co-operative Trust.
  • Ask for a Smart meter to be installed to reduce the school’s carbon use, reduce its fuel bills and give a practical demonstration of good energy use to its pupils.
  • Book into a local or national event to glean good practice and ideas for the school.

Securing our future: using our resources well can be downloaded from the DCSF website.

This e-bulletin issue was first published in February 2010

About the author: David Gordon is an author, writer, editor and qualified lecturer and has also been a parent governor. He has been the editor of School Governor Update since its launch in 2000

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