Education Traded Services, by Richard Harrison.
We’ve found ourselves increasingly involved in education traded services, in our ‘past lives’ and now as part of CIPFA C.Co.
Education traded services often provide a vital income stream for local authorities to support wider statutory services but this is being put at risk by a perfect storm of budget pressures, increased fixed costs, increasing and changing demand, and legislative and policy changes such as academisation in England and the potential new powers for head teachers in Scotland.
This collective force is not only opening up the market to new providers but is also fundamentally changing the relationships between schools and councils.
Rather than try to hold on to traditional approaches, the time has come for local authorities to really understand the services that they provide in terms of cost, quality, customer need, and strategic impact. It’s only by getting under the skin of these services that you can make strategic decisions on what to provide and which delivery vehicle to use. Many councils are taking on the challenge and are leading the way with innovative services and new delivery models; they are proving that it is possible to successfully compete against other players in the marketplace.
From a customer point of view, innovation and competition in the market can be a good thing for schools but it is important to make sure that it doesn’t become an unwieldy, administrative burden with business managers constantly searching the market for the best deal. And with more pressing matters to contend with, the impact of support services is often overlooked but can have a real impact, partly by freeing up funds and time spent on procurement which can be used elsewhere, partly by creating a great environment to achieve the outcomes that really matter; raising attainment whilst reducing the attainment gap.
Catering services that provide high quality, nutritious school dinners have been proven to improve results in the classroom (IFS study); Up-to-date digital services can help kids to learn in a more engaging manner as well as teaching them how to be safe online; Modern HR support and training services support teachers to be happy and remain relevant in their roles. Even services like property and grounds maintenance can help to create a stimulating environment and can provide learning opportunities when linked to biodiversity and environmental issues. Underpinning all of this is the need to ensure a robust approach to compliance and health and safety.
Education traded services are often tucked away in different parts of a council which can make it harder to notice the collective impact on council budgets when customers move elsewhere; this can suddenly make a service unviable and therefore unavailable to schools. It can also make it harder for schools to get a customer-centric service that might be available elsewhere. The disparate nature of local authority services can mean that the strategic importance of maintaining an influence on the quality of school services and a positive working relationship with schools is less obvious. But with fewer levers on offer this strategic link can be as important as the income stream; attainment has a significant impact on a community.
None of the above drivers are going to go away any time soon. From a market perspective, costs continue to rise, interest rates are set to rise, while big players like Amazon, with their acquisition of Whole Food, could have a significant impact on catering supply chains.
From a Political perspective, the uncertainty faced as we undertake Brexit negotiations, the reduced strength of the Government to push through their manifesto, and the threat of a general election in the not-too-distant future leaves us all guessing about the future. Will the push for more Grammar Schools be dropped? Will free school meals be replaced by free breakfasts? Will head teachers be given more powers? Will the increasing scrutiny of Academies lead to a change of direction?
So, what does this all mean for the future of education traded services? The supply chain, including local authorities, need to decide how to respond.
Local authorities who are not already doing so should ask themselves:
- What’s the full picture of what we’re providing in terms of cost, quality, and strategic impact?
- What do schools actually need, now and in the future?
- What ‘value add’ services can and should we offer to academies and maintained schools to improve outcomes for children? What should stop providing?
- What sustainable offer and commercial model can we develop in the medium to long term to retain a market share?
- How can academies and maintained schools maximise the benefits from school support services financially and evidence the contribution to improving outcomes for children?
- How will future policy decisions impact the supply chain and the market? How can we influence this and be ready to respond?
We’re supporting Schools, Local Authorities and providers across the UK to work through these questions and to develop new sustainable business models which improve quality and increase productivity across the supply chain.
We are undertaking national research involving schools and suppliers to help to give a collective voice, better understanding, and raise awareness of the impact of increasing budget pressures and changing market conditions. We also want to shine the spotlight on good practice and facilitate improvement across the country.
Schools and suppliers (including Local Authorities) have been contacted directly but if you’ve not received an invitation and would like to contribute to the research then get in touch at research@WeAreC.Co.
Or if you would like help with the service you provide then SpeakToUs@WeAreC.Co