With growing financial pressures on academies, the view that they should seek to achieve procurement efficiencies and value for money is becoming increasingly prevalent. As academies are spending public money, the Academies Financial Handbook imposes a requirement on each academy to ensure that public funds are used openly and fairly. This can be demonstrated through good procurement practice that effectively achieves the best value for every penny spent.
1. How can our academy demonstrate good procurement practice?
The key questions to ask are:
- What are we buying?
- How much do we pay for it?
- Can we get greater value for money elsewhere?
If the last question creates uncertainty, the first step towards achieving greater procurement efficiency is to make every effort to save money. It is just as important to compare or benchmark prices for your academy as it is for insurance and holidays. Shopping around for the best prices for products and services will save your academy a large amount of money and is more cost effective than continuing to purchase from familiar providers on a rolling contract basis. It is important to remember that value for money is not always about finding the lowest price. It is about getting the right balance between quality and cost.
2. How do we identify where savings can be made?
As an academy is responsible for its own financial management it is vital to keep detailed records of its deals and contracts. When an academy understands its finances it makes it easier to identify where potential savings can be made. Interestingly, although academies and schools spend most of their budget on teaching staff, according to DfE statistics they collectively spend approximately £9.2bn on other areas including energy, catering and back office.
For example, could your academy:
- Hire equipment? This will remove the need to make a purchase. Have an understanding of how long your academy will need to use the equipment and whether it will be more financially beneficial to hire for a period of time.
- Collaborate with other academies to share resources and/or increase your buying power? When a maintained school converts to an academy, it no longer benefits from local authority guidance on matters such as procurement and collaboration. Similarly to maintained schools, academies could and potentially should try to collaborate with other academies wherever possible. What if like-minded academies agree to approach the same energy provider, for example, and guarantee that a number of them will sign up to the provider’s services if it lowers its costs?
- Benchmark its performance against other academies? This will enable you to identify significant differences in the way academies manage their resources. Through comparison with other academies’ spending, you can determine whether there is scope for reducing costs, improving efficiency or identifying the potential scope for savings.
- Particularly if you are a member of a multi academy trust, consider creating a Procurement Board if you have not done so already. This Board could meet regularly and implement a centralised procurement strategy to ensure that academies within the trust have the highest standard facilities and services for the best value the market has to offer.
- Consider “buying green”. Your academy can become more sustainable by buying green office supplies, for example. Putting emphasis on waste minimisation and consuming sustainably could save your academy a small fortune.
3. How do we take our purchasing strategy forward?
There are several avenues to explore in order to achieve greater value for money and demonstrate that public money has been used with integrity.