Procurement tips for Academies
Academy Trusts (“Academies”) must abide by procurement law namely the Public Contracts Regulations 2006 (“the Regulations”). The key principles of procurement aim to ensure that public money is spent in a transparent and fair manner to represent best value for money for the taxpayer and help public sector purchasers obtain the right standard of product or scope of service. It is particularly important that Academies are fully aware of their legal responsibilities and understand the steps they need to take to discharge their duties and exercise good governance. Failure to comply with the Regulations could result in legal challenges from suppliers, financial penalties, contracts being cancelled and significant reputational risk. Determining if a purchase is subject to the Regulations When an Academy is considering making a purchase it should consider the requirements on it in, its own financial regulations/policy, the Academies’ Financial Handbook and the Regulations. It is important that Academies can determine whether a purchase is subject to the Regulations. The Regulations generally apply to contracts with a financial value (net of VAT) above the following thresholds (albeit there are some exceptions to this): • Supplies - £172,514 • Services - £172,514 • Works - £4,322,012 When determining the value of a purchase, Academies must take account of the potential value of the contract over its full term including, any extensions or variations which could be exercised within the Procurement tips for Academies contract term and, any similar or repeat purchases which should be aggregated. Earlier this year the DfE published some very helpful guidance on procurement for schools – Effective buying for your School. The guidance provides information on purchasing, how to achieve better value for money and, assists schools in understanding their procurement obligations. Academies Newsletter Autumn 2014 2 New Academies Handbook 2014 On 8 August 2014, the Education Funding Agency (“EFA”) published the Academies Financial Handbook 2014. The 2014 handbook replaces the 2013 version and is effective from 1 September 2014. The handbook applies to all Academy Trusts and free schools and sets out the financial management, control and reporting requirements with which they must comply. Page 5 of the handbook provides a helpful summary of what has changed since the previous, 2013, version. A full copy of the handbook can be accessed here. It is important that academies review the new handbook and ensure that their own financial regulations and policies comply with the Academies Financial Handbook 2014. Academies Newsletter Autumn 2014 3 While it is by no means a comprehensive guide to compliance, the video is useful in highlighting the aspects of information governance that the ICO sees as most relevant for schools. These include: • updating your Notification with the ICO if you install CCTV or introduce new technology like fingerprint scanning; • giving staff, pupils and parents a fair processing notice to explain what personal information you collect, what you do with it and who you share it with; • keeping paper and electronic records secure – both physically (in locked cabinets and keeping a log of removable media), and electronically (requiring strong passwords and firewalls); • making sure that portable storage devices are encrypted. The ICO has said that where thefts or losses occur and encryption software has not been used, it may take enforcement action which could mean a fine of up to £500,000. Last year, North East Lincolnshire Council was fined £80,000 when a SEN teacher accidently left an unencrypted memory stick containing sensitive personal data of 286 pupils in a computer at the Council’s offices. The missing device was never recovered. Of the security breach incidents reported to the ICO last year, 9% were in relation to the education sector; • ensuring your school has a named member of staff with a working knowledge of information rights and records management who can take the lead in raising awareness. All staff and ICO video for schools governors should also be trained so that they understand the basics of information rights issues, and know what your school is allowed to disclose, publish or share; and • having a written data protection policy which sets out clear responsibilities and provides practical guidelines to staff, and ensuring that staff follow it. You can watch the video online at http://ico.org.uk/for_ organisations/sector_guides/ education. As a reminder, the ICO also has some useful resources for teaching young people about their information rights, including a number of lesson plans for primary and secondary pupils, and a dedicated website of advice aimed at young people. To help schools understand and comply with their data protection obligations, we offer a Data Protection Health Check Service. Typically, this would involve us asking you to complete a questionnaire on your school’s data protection procedures which we would review along with your existing policies. We would then produce an executive report identifying areas of risk and providing practical recommendations to help you improve your data protection compliance. For further information on this, please contact Jackie Gray or Emma Dewar. The Information Commissioner’s Office (ICO) has recently produced a new video on Information Rights, aimed at Head teachers, Deputy Heads and school Business Managers. It is a 9 minute whistle-stop tour through a school’s key data protection and freedom of information obligations. Academies Newsletter Autumn 2014 4 Risk Protection Assurance What is the Risk Protection Arrangement? • As from 1 September 2014, all academy trusts have been able to opt into the Department for Education’s new Risk Protection Arrangement (RPA) scheme. • RPA is an alternative to conventional commercial insurance, whereby DfE will seek to cover the cost of a number of insurable losses which may be suffered by academy trusts. How will it Work? • Free schools, academies, multiacademy trusts and PFI academy trusts can all take advantage of the RPA and can opt into the scheme at any point before conversion, or during a period in which their current insurance is still valid. • The RPA will seek to cover the risks normally included in a standard schools insurance policy. A premium of £25 per pupil per year (fixed for the first two years) will be deducted from the academy’s General Annual Grant (GAG) by the EFA. • The RPA will cover losses including: Material Damage; Business Interruption; Employer’s Liability; Third Party Liability; Governors’ Liability; Professional Indemnity; Employee and Third Party Dishonesty; Money; Personal Accident; UK Travel and Legal Expenses. Potential Drawbacks • Academy Trusts should be wary that opting into the RPA may have adverse consequences in relation to their legal obligations in respect of existing property agreements. • For example any Academy which has agreed a lease under the DfE’s model academy lease will be in breach of their duty to acquire commercial insurance (as the RPA is not technically an insurance policy). In this case academies would need to agree with their Landlords to vary the lease in order to permit the Trust to opt into the RPA scheme. The ability of the Trust to enter into the RPA is therefore dependent upon obtaining the consent of the local authority landlord. At the very least we would expect the Local Authority to charge the Trust for its legal costs in relation to agreeing such a variation. • Schools should also ensure the timing of entering into the RPA is closely monitored so as to avoid gaps between a commercial insurance policy ending and the RPA protection starting. www.bonddickinson.com This communication is provided for general information only and does not constitute legal or other professional advice. You should consult a suitably qualified lawyer on any specific legal problem or matter. BD.1523 Academies Newsletter Summer 2014 5 Key contacts Joanne Boyle Partner T: +44 (0)845 415 6753 E: joanne.boyle @bonddickinson.com Emma Moody Partner T: +44 (0)191 230 8823 E: emma.moody @bonddickinson.com Stephen Covell Associate T: +44 (0)845 415 7856 E: stephen.covell @bonddickinson.com Sarah Thompson Associate T: +44 (0)191 279 9639 E: sarah.thompson @bonddickinson.com Jackie Gray Director T: +44 (0)113 290 4432 E: jackie.gray @bonddickinson.com Kevin Robertson Partner T: +44 (0)191 279 9747 E: kevin.robertson @bonddickinson.com New DFE handbook for governing bodies • On 10 September 2014, the Department for Education published a revised governors’ handbook for governors of both maintained schools and academies in England. • The revised handbook outlines the core role and functions of school governing bodies, and summarises all of the specific legal duties on governing bodies. • The latest version of the handbook can be found on the Government’s official publications section of its website, the link to which can be found here.