Author: Jonathan Crossley-Holland, Strategic Director
The Government is firmly focused on ensuring that cuts in public services spending don’t hit essential frontline services and, for the education sector, this means greater control of their budgets and the power to make independent decisions about what will aid performance. However, devolving power also means devolving spending decisions – and while schools and colleges will have a strong vision about how to raise educational standards, the intricacies of honing in on ineffiencies, directly commissioning more services and staff budgeting will present considerable challenges for many.
Take, for example, the school that was paying more than £40,000 per year on its cleaning contract. Unfortunately, the school belatedly realised that this cost included cleaning during school holidays – when many of the facilities were empty and unused. Or the colleges who were able to save £100,000 per year by reducing duplication in data entry of student records.
Since 2008, Tribal has been working on behalf of the Department for Education to help schools identify and overcome these challenges through a value for money programme offering free advisory support to any school in England, tailoring sessions to each school’s requirements. Since the start of the programme, over 1,500 schools have received support from Tribal’s experienced education experts, many of whom are veteran school leaders – and in one survey of schools involved in the programme over 90% of respondents would recommend it to others, having experienced a high value return from the advice offered.
The practicalities of evaluating the value for money that different services and contracts represent for the school and developing better commissioning arrangements is far from natural terrain for many. Tribal’s goal has been to educate schools in the art of best practice value for money techniques to help them to plan and evaluate their spending more prudently in the medium to longer term.
When the advisory programme began, the schools sector had been experiencing significant year-on-year budget growth throughout the 2000s and most local authorities had enough resources to bail out local schools who mismanaged their budgets. Since 2009, however, budgets have been slowing down and looking ahead, schools are faced with difficult decisions about what spending to cut rather than risking a deficit.
Tribal’s advice and support goes far beyond instilling traditional lean management practices, as we recognise that in the changed reality of public spending in the 2010s entirely new approaches are needed. As a result, a key element of the advisory service has been helping schools identify and replicate the best practice found in schools with similar operating contexts and challenges to their own. We have also sought to help clusters of local schools adopt shared service arrangements.
So, for example, instead of axing programmes or courses to save money, to the detriment of students’ education, schools can instead collaborate with neighbouring schools to align services and reduce costs, protecting frontline teaching and resources.
Anne Kiem worked as a secondary school mathematics teacher before joining the ifs School of Finance, and is now its Vice Principal. The Ifs offers a GCSE equivalent in personal finance, and an A Level equivalent in financial studies, both of which have UCAS tariffs. Underlying this is the fact that schools do not have to rely solely on the big exam board providers for qualifications, particularly as these providers are not always clear on total costs. Costs tend to be divided into separate charges, for registration, entrance fees, and so on, so a school cannot easily get an overview of the total expenditure required.
As Anne Kiem says, value for money doesn’t always mean opting for the cheapest option. A school or college needs to look at what they want and what they want to achieve in the context of all associated costs. Getting this overall view and understanding how costs can be managed is the key to success.
Colleges succeed by learning from and evaluating against peers
Collaboration is an emerging theme in education, but finding a starting point can often be a challenge. What is crucially important is that collaboration can work at almost any level. One example could be facilitating the knowledge-sharing process between business managers at nearby colleges so they can compare costs and benchmark service offers. Alternatively, half a dozen colleges in the same area can share an administration or site management team. This is a relatively straightforward way of managing expenditure more effectively.
Benchmarking costs is an important part of this process: by comparing costs with peers, almost any education provider can identify issues within their own institution. Tribal has been benchmarking colleges for over ten years and now holds a databank that covers 40% of the country’s FE sector. Using this data, a FE college would be able to benchmark costs against selected or high-performing peers and understand ‘hidden costs’ within individual departments that may not show up via centralised accounting. Benchmarking can also identify trends over time to reveal how a college can save significant sums of money without having to fundamentally change its business model.
In some respects, the New Zealand political landscape reflects our own: in 2008 the New Zealand government changed from the Labour to the National Party, and since gaining power, the National Party has been seeking to prudently manage public sector spending. One way in which this policy of efficiency was brought to life was through New Zealand’s Tertiary Education Commission (TEC), which wanted to gather data on student performance, results and benchmark polytechnics and universities to test whether they were providing quality education and value for money. Tribal has been running this contact since 2007 to help them improve issues such as teacher productivity, procurement, and allocation of students to courses, based on what has been learnt in the UK.
Since work began with the TEC, it has identified areas of high spend and low performance, as well as undertaken many cost reduction exercises in several institutions using Tribal’s benchmarking methodology and data to drive and monitor specific performance improvement plans. This solution has been extremely successful in New Zealand, and much of what has been achieved in one country could help drive efficiency in another – right here, in the UK.