Whether the school is big or small, has a large or diminishing budget, or is local authority controlled, the actual process of buying is regulated but can look very different.
As someone who has worked in schools of all sizes and varieties, I have seen the process from many angles. But whether the spending is controlled totally by the headteacher or principal as it may be in a small school, through budget holders, or by an overarching body such as the LA or a Multi Academy Trust, we are spending public money, so there has to be transparency and probity.
Let’s get the statutory stuff out of the way first. Schools and academies must follow consistent financial reporting procedures, and all settings will have levels of audit.
These audits should ensure compliance with the school and LA or MAT policies, which should always be up to date and correct according to current legislation. Information on that legislation can be found here.
Procurement law has changed, and will continue to change, particularly with the impact of Brexit. Currently, you need to be aware of the following advice for schools:
Procurement law states that high value purchases should be achieved through a tender process. The DfE recommend £40,000 as the limit, but check your school/academy/MAT finance policy. A tender should be advertised, all bids received and assessed on the same basis (i.e., for the same specification) and the contract awarded using a fair and transparent process. If the tender is likely to attract a lot of interest, you can ask for an expression of interest first, but this may mean that the process takes longer.
There are EU procurement laws for higher value purchases, the thresholds are set at:
- goods – £189,330
- works – £4,733,252
- most services – £189,330
As education is a public service, there is a light touch process available, and you would be advised to check this before beginning the process. Details can be found here.
The threshold for these is £663,540. Be aware that the value is determined by the whole cost and therefore may well become applicable, particularly if you are buying for a group of schools or academies or it is a long-term contract.
There is a lot to know and a possibility that with Brexit this may change, so for a very large purchase, legal advice is recommended, and you need to keep abreast of updates. If you’ve not already done so, signing up to receive DfE updates is a great way of doing this.
Information gathering
The school business professional is likely to be the person in the setting to carry out these processes and will work to follow a process which covers every requirement. Best practice dictates that you should use the following to ensure a smooth and effective process:
Business Case – write a business case which gives an outline of what is needed, a cost, a timescale for the purchase and quote or tender approval.
Purchase – this will be guided by your school or academy finance policy, which will state what is required for each level of purchase. For instance, whether you require three quotes, should it go to tender, how to get the quotes and if you should consider a framework agreement.
Specification – write a specification. This is a key part of the process which ensures that your purchase is best value and fit for purpose. It is sensible to gather as much information as you can prior to writing your specification which should include:
- a precise description of what you need
- an explanation of what it should do, if needed
- the amount you need
- what quality it should be
- when you need it
You should also consider maintenance and servicing of the product and sustainability, its shelf life and how, or even whether, you will need to replace it at the end of the life cycle. Mistakes at this point can be costly, so accuracy is important, hence the need to gather as much information as possible.
Obtaining value
I have mentioned framework agreements; these are a type of contract that you can use to buy services and goods for your setting. The framework generally is set out like a tender, and suppliers are vetted and then invited to quote for contracts for anything from photocopiers to ICT purchasing.
Crown Commercial Services run frameworks for schools which also include teaching supply, details of which can be found at tinyurl.com/HDTccs. The benefit of joining with a framework is that a lot of the initial work around supplier checks is done for you, while rates are also often more favourable due to economy of scale.
While these procedures ensure compliance, all purchasing should be carried out with best value and value for money in mind. To support schools to achieve this, the DfE have published guidance on procurement in schools, ‘Buying for schools – Guidance’, which includes advice on all elements, from the legal obligations around contracts to frameworks and estate management.
This is a lot to know and can be very daunting, even if you are an experienced school business professional or headteacher. It is important it is not carried out in isolation by one person, even though it is likely that one individual will manage the purchase.
Other stakeholders will have influence in any purchasing decisions and should therefore have a working knowledge of the setting’s policies and government guidelines.
Approving purchases
Governors will approve purchases. Having a knowledge of procurement regulations along with a knowledge of the contents of policies will support them in making sound and correct decisions. Your school/academy/MAT policies will show where governor approval is needed.
Budget holders, especially if they are authorised to order themselves, need to understand why they have to follow the procedures, and there need to be systems in place to ensure that they do not exceed their authority and make a bad purchasing practice.
SLTs are often called upon to approve purchases. They need to understand the procedures and levels of responsibility so that they can avoid agreeing to something that needs further thought and approval.
This above is alongside all staff having a sound understanding of procedures that you as school leaders have put in place to ensure best practice and probity. As with most things in education, information is key, and time spent on training and sharing details on procurement is time well spent.
Things to remember
- The DfE has full guidance on the process of procurement for all schools and academies.
- Settings should make sure that their policies keep up with legislation.
- Procurement is not something that should be done in isolation.
- Do not start the process without having all of the knowledge that you need, even with small purchases. Any mistakes will impact negatively on your budget.
Sue Birchall, consultant, speaker, writer, trainer and business manager at The Malling School, Kent.
