Schools face a huge procurement challenge, and the DfES has set up services to help them make savings
SFM reports on Darron Cox’s recent conference address on the Centre for Procurement Performance and an online market place.
At the second School Financial Management Conference in January, Darron Cox, deputy commercial director at the Department for Education and Skills, discussed how the DfES could assist schools in meeting their procurement challenge. He described the work of the Centre for Procurement Performance (CPP) and highlighted the role OPEN, the Online Procurement for Educational Needs system, would play.
For those of you who missed Darron’s presentation, this article revisits its key themes and offers a glimpse of future avenues DfES will be exploring.
What is the CPP?
As a result of the Gershon report, the education sector was charged with making £1.4bn efficiency gains by March 2008, of which schools have a target of £1.1bn. Given the sheer scale and complexities of the education sector, the challenge has been referred to as ‘probably the biggest procurement challenge in Europe’. The Comprehensive Spending Review 2007 will increase the pressure for achieving efficiencies and at the same time many local authorities have been reducing the amount of support they are able to offer to schools. The CPP was set up within the DfES in 2005 to help the education sector to meet these targets by providing assistance, guidance and support. The CPP covers the whole of the education sector, including schools, further and higher education, children’s services and shared services.
What is the schools’ programme?
Procurement in schools is complicated: there are more than 22,000 schools across England, and lots going on.Lots of people have needs, lots of people buy goods and services, and there are lots of suppliers, resulting in lots of transactions. Inevitably, there is also a considerable amount of duplication, which causes waste. Schools face a myriad of catalogues and reps; and there can be plenty of budget variances. Often you find all of this going on in a single establishment! CPP’s schools’ programme has been developing stakeholder networks and consulting on where to focus its strategic initiatives. The following areas are being targeted:
- guidance and skills development
- temporary workers
- information and knowledge management
- Building Schools for the Future (BSF)
- commodity procurement.
For example, work is ongoing to streamline and update schools’ procurement guidance, while at the same time skills development has taken place across the schools sector for administration staff, bursars and governors. One example is the work of the CPP in London to find better ways of procuring supply teachers and cover supervisors.
The CPP can help schools through provision of advice on procurement decisions. In the case of photocopier contracts, some schools have signed contracts amounting to tens and even hundreds of thousands of pounds. In some cases, with the CPP’s support, these figures can be dramatically reduced.
Transport is another complex area. Darron Cox gave a long list of the potential risks and this provoked some discussion. Just a few of them include:
- corporate manslaughter legislation
- minibuses which have been donated voluntarily and don’t meet the relevant standards
- driver responsibilities for pre- and post-use inspections
- seatbelts and disabled restraints
- maintenance and service scheduling.
Again, CPP can help you to work your way through these potential minefields. The schools’ programme is also working on pathfinders for two key areas – local educational procurement centres and e-procurement.
Procurement at the local level
Darron discussed a relatively new initiative that the Department is working on, that of Educational Procurement Centres. The important remit for supporting schools would remain the same:
- Implementing OPEN: the marketplace for schools (see below).
- Providing procurement support guidance and training to schools.
- Delivering the sustainability agenda for school procurement.
- Identifying opportunities for improved procurement or collaboration.
- Improving knowledge management and information sharing.
- Implementing national procurement initiatives.
However, the feedback CPP has received is that many schools can feel unsupported. Educational Procurement Centres would fill that gap, provide professional support in targeted areas and would provide the overview to facilitate more collaboration across the sector. In addition, Educational Procurement Centres would take a strategic overview of commercial arrangements.
OPEN: the marketplace for schools
Darron also spoke about OPEN (the Online Procurement for Educational Needs) marketplace for schools. The vision for OPEN is simple – to provide easy access to local, regional and national value for money contracts in one place that allows buyers and suppliers to transact electronically. The benefits are widespread. It provides schools with:
- spend intelligence
- end-to-end purchasing connectivity
- content focused towards school needs
- a flexibly managed service integration with schools’ MI systems (SIMS, RM etc)
- a simple Amazon-type of purchasing experience.
The conference delegates posed some challenging questions at this point and one delegate simply asked: ‘What evidence is there that e-procurement is good for schools?’ Darron Cox responded that e-procurement is a direction which everyone is being encouraged to pursue and that OPEN has been designed specifically for schools and will therefore meet their needs more closely.
OPEN pathfinder phase
The pilot phase of OPEN is now underway. Darron Cox explained that the pathfinder phase of the project is to rigorously test the system for reliability, appropriateness and ease of use, before it is made available to all English schools in late 2007.
The pathfinders have recently been announced as:
- a group of Devon schools
- East Sussex County Council
- e-Spi, a north west-based consortium hosted by Rochdale Metropolitan Borough Council
- the Royal Borough of Kensington and Chelsea
Sue Hall, e-Spi’s manager says: ‘OPEN reflects e-Spi’s vision to achieve a vibrant and robust school market place which supports the efficient and effective management of school resources. There is a clear expectation from government, Ofsted and the Audit Commission for local authorities to develop strategies to meet their statutory responsibility to encourage schools to become effective purchasers. e-Spi was established in February 2006 by eight forward-thinking authorities in the North West to support a number of government agendas.’
How does OPEN work?
Traditional e-procurement still requires leafing through a variety of catalogues to find the required item, and then compare prices and specifications. Even for regularly ordered items, it’s still a case of going back through past orders to find the right item. That can be time consuming. With OPEN, all this can be done electronically, allowing the purchaser to compare across different suppliers and a range of criteria. Features such as ‘Favourites’ and ‘Previous orders’ make repeat orders quick and simple and with OPEN there is no paper purchase order to raise and no paper invoice to reconcile with the purchase order when it’s submitted. All of this can be done electronically.
What does this mean for schools?
As discussed earlier, the benefits of OPEN are widespread, but essentially they come in three separate areas: 1. Management information. 2. Value for money savings. 3. Improved efficiency.
Using OPEN, transactional data is collected and available centrally, so where there are multiple buyers in a school, information is aggregated and easily visible in one place. This makes spend analysis much simpler. The ease-of-use of the system facilitates decision making for those making purchases – it’s easy to compare products based on a number of different criteria. No more flicking through multiple catalogues! And by making available information from more suppliers, it gives opportunities for better contracting.
Value for money savings
OPEN can provide access to your local contracts, as well as regional and national contracts. This allows schools the widest possible choice from suppliers you can be assured are already supplying other similar organisations.
OPEN operates via an internet browser, so it’s familiar and easy to use, saving time which can be more productively used on other tasks. It integrates with your existing MIS and finance systems, and provides electronic transactions with suppliers. The whole process becomes electronic. Catalogues are maintained by suppliers, with the advantage that suppliers only need to update one source whenever there are changes to their products or services.
Suppliers – what’s in it for them?
Suppliers will be able to access the schools’ market easily and will make savings from simplified administration processes – savings from producing and posting invoices and statements. It’s all done electronically. Also, updates to catalogues can be done once, rather than having to update each customer individually. Suppliers can join OPEN by being nominated by an existing public sector customer.
How will schools benefit from this programme?
To summarise, OPEN users will receive:
- better prices
- a choice of better suppliers
- local, regional and national contracts
- access to expert advice
- an easy ordering facility and the ability to pay online.
These benefits should give increased budget flexibility and savings which can be used for more staff and other resources, better quality services and investment.
Following on from the presentation…
As a footnote to Darron’s presentation, it is also worth noting that CPP is also working on sustainable procurement issues, and will be working hard to embed sustainability into all areas of its work. CPP will be explaining the differences between efficient procurement and sustainable procurement and whether you can have them both. Watch CPP’s website for future information, and for details on how CPP can help you in this area.
For further information about OPEN please see the website at www.dfes.gov.uk/cpp/open
Also see CPP’s monthly newsletter for updates on the OPEN pathfinders and the project as it progresses – www.dfes.gov.uk/cpp/newsletters.shtml
For more general information on CPP’s work see www.dfes.gov.uk/cpp