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The only target is better value, by Ian Taylor

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17 June 2005

Budget-holders in education are concerned that procurement targets will oblige them to axe their trusted suppliers. However, both sides of the equation will be involved in solving the efficiency problem

Sir Peter Gershon put his finger on it; now it's my job to help deliver it. The efficiency target set for procurement in the education, skills, children and families system is vast — £1.4bn over the next three years.

My small team at the Centre for Procurement Performance, the new unit set up by the Department for Education and Skills, is the vehicle by which these savings will be achieved — but we will be working alongside existing organisations involved in procurement and commissioning.

All savings will stay in the accounts of individual schools and colleges, to be used as they see fit. But the first big challenge of the efficiency agenda is overcoming the fear and misapprehension within the system. Budget-holders still voice suspicion that the money they save will be clawed back by Whitehall.

I can say categorically that it will not — but my hunch is that people are in 'believe it when I see it' mode. That's understandable. Many of them, particularly in the schools sector, also fear they will be forced to stop using trusted suppliers.

The concern expressed by some budget-holders is that a one-size-fits-all national solution will be imposed in the name of aggregating demand, and they will find themselves paying for goods and services they do not require. Meanwhile, their traditional suppliers will go out of business while the big boys offer loss-leader prices. Once competition has been extinguished and dependency has been established, prices will be raised in a market where there's nowhere else to go, and sustainability of supply will be thrown into doubt.

This line of argument is wrong on every count. Telling people what to do is not the solution, nor is imposing a national deal on every commodity. The key to achieving efficiency savings is to involve budget-holders and suppliers in shaping how the needs of the education system may be satisfied, more quickly and simply, and at better value.

Suppliers that are competitive and respond to their customers' needs stand to gain from the new procurement landscape.

The second big problem thrown up by the efficiency agenda is manageability, both for budget-holders and for the CPP. Consider the number of stakeholders involved: 24,000 schools, 397 colleges, 150 local authorities, 130 universities. The education system is vast and fragmented.

That fragmentation must be overcome so the message can get through to each bursar, site manager or commissioning manager. Which communications channels will we use? Whichever channels work. So school bursars will hear about the best deals through the routes they trust, principally local authorities, and the regional centres of excellence.

But manageability is even more of an issue for the professionals on the front line who will have to deliver these ambitious targets.

I am a serving governor at two schools in Boston Spa near Leeds, a village primary school and the local secondary school where my two sons are educated. I know from experience how difficult it can be simply to find the time to plough through material and make better purchasing decisions.

Bursars, school secretaries, site managers and heads are already bombarded with information. The drive for greater efficiency must not add to their burdens. The last thing the bursar at my sons' school wants landing on their desk is another heavy manual of procurement advice. What budget-holders want is reliable, timely information on the best deals available.

The answer to the manageability problem on the front line is to apply rigorous quality control to the information disseminated. Budget-holders need to see that their time is not being wasted, and that the information they receive leads to quick, easy decision-making.

Professionals who purchase and commission goods and services across the education system also want to see that the department is attacking waste and eliminating duplication. In this respect, the power of information and communications technology will be crucial.

Again, we're faced with fragmentation: thousands of potential data sources exist but few are aimed at assisting procurement. Relational databases can be used to collect and process complex information about procurement activity to build up a clear picture of what's actually going on.

Collating and analysing that information is the first step to exploring some serious restructuring of the supply markets that serve education. Getting this right will mean striking a balance between big national players, who treat education as a huge single customer, and local suppliers, who often have personal connections with their local schools and will win on service every time.

These challenges will be met head-on by the CPP. All we ask is that budget-holders judge us by whether we help them get better value for every pound they spend.

Ian Taylor is director of the Centre for Procurement Performance at the Department for Education and Skills

PFjun2005

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