BARGAIN HUNT
The
bargain hunt
we can all take part in The Institute of Public Policy Research estimates that, in spite of the Pupil Premium, 65% of primary schools and 80% of secondary schools will have experienced real-term budget cuts between 2010 and the end of the 2014/15 academic year. Alan Cowley asks if the savings associated with ‘group buying’ could help to redress the balance 18
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T
he post of school business manager carries with it huge responsibility. Whether you’re a state maintained school, or work within the private sector, funding is something that is never far from our minds in these straitened economic times. It matters not if your school’s income is from government sources, from fee paying parents, or from charitable endowments, the financial uncertainties of the last six years have taught us all to be canny when it comes to how we manage expenditure. Perhaps those colleagues who feel this most are business managers in schools that have just made, or are making, the transition to academy status. Not only do they have to navigate their way through the increased responsibilities that independence brings but also guide senior leaders through the limits and scope of what will also be for them, a new set of experiences. We have to look no further than several prominent news stories from the last year to see the problems that develop when leaders of free schools/ academies and academy chains fail to adhere to high levels of financial probity. Too often within the school environment, circumstances force upon us what has to be done, rather than what we would like to be done. Time is at a premium. It is certainly a valuable commodity and I would always endorse the use of ‘time-out’ sessions for senior leadership members, away from the interruptions inherent in school life, where they can talk through plans for possible developments to improve outcomes for their pupils. Providing similar opportunities for the SBM, perhaps in the company of the
head, key members of whatever governing body you have, and an informed consultant who can guide you through the possibilities, is no less important.
Make yourself fully aware of the terms of your current contract or contracts for the energy your school uses
I strongly believe that we can all learn a great deal from sport and, in particular, successful sports management. Unarguably one of the most successful sports teams of recent years has been the British Cycling Team, and the main reason for that success has been laid at the door of the general manager and performance director Dave Brailsford, and his philosophy of finding 1% improved performance in as many areas as possible. Little differences all add up to make big differences. How can we apply the same theory to educational spending?
veritable money pits. Selffinanced re-building is the remotest of options, so what can be done to save money on energy consumption, so that much-needed resources can be re-allocated to learning? Surprisingly, quite a lot, but few schools are yet to fully explore the possibilities.
The journey into academy status saw many schools trying to negotiate unchartered financial waters, with some unforeseen contractual sandbanks waiting to run us aground. This was seen in 2011 when schools leaving local authority control faced what they saw as excessive bills to re-negotiate their licence with a major MIS provider – often facing bills of over £20,000. Naturally, unforeseen expenditure on this scale is rare and perhaps illustrates the pitfalls of making assumptions about contractual obligations rather than anything else. But what about the outgoings we can anticipate and therefore plan ahead for?
Before I go any further, and as I previously mentioned, there are serious pitfalls associated with failing to understand contractual obligation. Your first move should be to make yourself fully aware of the terms of your current contract or contracts for the energy your school uses. I am not suggesting for one moment that you shouldn’t consider the penalties that early cancellation would bring upon your school, but by the same token, as we’re charged with ensuring best value, it would be remiss not to explore the options for alternative provision so that you will be in the driving seat when contracts eventually expire.
Of course, as every householder knows, the rise in costs for gas and electricity seem relentless and extortionate. But compared with the energy bills our schools attract, they pale into insignificance.
The easiest method is to become part of a selective switching scheme. Selective switching allows consumers to group together to increase their buying power and negotiate a better deal from gas and electricity suppliers. The most common way of achieving this is by using a third party to undertake the negotiations on your behalf –
The cancelling of the BSF programme has left many of us with old buildings that are
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and there are plenty of highly reputable collective switching advisors who will do this. The advantage of this method is that the ‘group’ you are part of doesn’t have to share the same geographical location but can be spread across the entire country. The switching advisor will negotiate a discounted rate for each group member and inform
A slightly more complex system is collective purchasing, a scheme that bypasses the supplier and buys energy direct from the wholesale market 20
you of the new price. If you don’t like the offer there’s no obligation and no cost implication for the school as collective switching advisors receive commission from the company you switch to, if the new contract is agreed. A slightly more complex system is collective purchasing, a scheme that bypasses the supplier and buys energy direct from the wholesale market. For this you will require the services of a licensed energy supplier, and to fail to engage one would constitute an illegal act. Suppliers will buy your energy from the wholesale market on either a monthly or annual basis. Current market performance indicates that monthly purchases actually work out to be slightly cheaper than annual purchases. Savings can be far greater using this method but of course, as with buying anything on the wholesale market, prices can fluctuate and so the risks are greater.
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Energy reduction can at first seem to be a headache in a school where there can be over a thousand ‘family’ members who fail to switch the lights off There are of course other solutions that can reduce the cost of your energy bills. Energy reduction can at first seem to be a headache in a school where there can be over a thousand ‘family’ members who fail to switch lights off. But there are schemes that identify how your school can replace energy gobbling infrastructure and equipment with energy
BARGAIN HUNT
efficient versions that are paid directly from the savings you are making. It’s a way of upscaling infrastructure without up-scaling costs. Once the cost of the new installations has been met (and time scales should be contractually agreed in advance – so no nasty surprises!) the school has the benefit of reduced energy prices that derive from the new energy efficient infrastructure.
options sound tempting to you, make sure you get specialised advice. Use professional associations – not just your own but those of other school leaders – to network and find the
s SLT Discussion Point
1.
of all our energy Do we have an overview ve we established supply contracts, and ha 0 days before a trigger mechanism 15 time to explore one expires to give us the
alternatives? schools that have 2. Do we know other hing or collective entered selective switc What are the purchasing contracts? benefits they’ve found? currently available to 3. What schemes are y? Can we use help us conserve energ our infrastructure this strategy to improve cial burden? without creating a finan recommendations on purchasing from people 4. Is the school policy w can we who have already providing best value? Ho undertaken this journey. ensure that it does? Use the web – five minutes will furnish you with a list of agencies that provide all of the above services and many of school’s phone number. That is them have used case studies the number you should call. from schools to illustrate the savings that can be made. It Being savvy about the way the would make sense to talk directly commercial world operates can to the school as a first step. bring savings in other areas. These may be smaller in nature than those associated with energy but nonetheless, when added together, can provide significant savings. I was recently talking to the head of business services for a company selling office materials to the commercial and public sectors. He told me the he loved taking orders from schools as they never asked for a discount but accepted the brochure price. In my experience it is quite easy to Quick tip: as you know, in all obtain discounts of between 10 matters financial, just because – 20%, but ‘if you don’t ask...you you’re looking at a glossy don’t get’. So what can you do to website, it doesn’t mean that ensure your school isn’t paying the owners of that website are more than it has to? genuine, always assume that this could be a scam and the Firstly, look at your procurement phone number given could link policy. In many schools, as you directly to the scammer. So the end of the financial year before you do anything else, approaches, fund holders realise take the name of the school, go that they have some money they onto the Ofsted website and need to spend. In your school, bring up their last Ofsted report. who places the orders? The In the section giving information individual fund holders or the about the school you will find the admin team? If it’s the former,
Energy efficiency shouldn’t just be a costsaving strategy; there are strong curriculum implications that should also be Being savvy considered about the way Energy efficiency shouldn’t the commercial just be a cost-saving strategy; there are strong curriculum world operates implications that should also be considered. There are several can bring savings schemes that involve the school pupils in finding energy-saving in other areas solutions and measuring the impact of the amount of energy saved in both environmental and financial terms. Reducing carbon emissions also reduces energy bills. A pilot scheme consisting of a mixture of just 13 primary and secondary schools in one local authority saved an average of 24% on their energy bills through this approach. If this same scheme had been rolled out across the entire authority it would have given a gross saving of £650,000 per year. Please remember, if any of these
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do you issue advice on what they should do? As we know, not everyone is a natural haggler; you need someone who is, to make the call. As always, a few minutes spent in preparation pays off. Search the internet for other suppliers of the same item/items and get some phone numbers and prices – which you’ll find won’t vary much. When you make the call, ask whether they still have the required stock and (this is the important bit), in a confident manner that totally assumes the sales person will comply with your request, say ‘Naturally, I’ll be given 20% discount on the price quoted in the brochure.’ Say this as a statement, not a question! You’ve now initiated the haggling section of the conversation, and one of three things will happen: 1. the sales person will comply immediately with your assumption of discount 2. the sales person will say that
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20% would be too much and offer a lower discount 3. the sales person will say that they don’t offer discount on the brochure price If it’s the first, be happy with the saving and don’t beat yourself up for not asking for 25%. If it’s the second, don’t immediately give another figure – in business deals let the other person set the going rate if you can – so ask how much discount they can offer, then try to nudge that up a bit more. If it’s the third option, say something like “OK, if you’re sure about that I have the phone numbers for (and mention some of their competition here). They have similar prices but I’ve heard they’ll offer discount. Are you sure you don’t want to check this with your line manager?” If they don’t come back with an offer, phone another company and try again.
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When I talk to school staff about this, there are two questions that are most frequently voiced: “What if the first company you call has the best price at the end of the day? How can you possibly call them back and not lose face?” Well to start with you’re probably contacting their sales call centre, so the chances of getting the same sales person are remote but even if you do, what does it matter? You’re talking to a complete stranger, who you’ll never meet, who does this for a living and faces the same questions you’ve asked dozens of time per day – a fact that is worth remembering whilst haggling. The important thing is that the money you save on your purchases can be reinvested in the learning of children, and not into the supplier’s bonus pot. n For more information and ideas about group buying, see: www.energyforeducation.coop