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Planning new windows of opportunity

May 05, 2020

The period since the school shutdown has been furiously busy for school business professionals.

The past few weeks have been a curious mix of firefighting shutdown related issues and some tentative forward planning. They are sorting out site issues and contracts and, in many cases, working until midnight most nights, particularly those using Edenred for provision of free school meals vouchers. The past few weeks have been worrying for all of us and as far from a breather as it is possible to be.  How envious we all are of those with time for new hobbies (although how envious they probably are of us in work).

It has also been a time of growing chatter and speculation about when schools might return. Various dates have been mooted including the beginning of June. It may be that we won’t see a full return until September.

Either way, it is unlikely to be an immediate return to normal, so the summer term may offer an opportunity for school business professionals to carry out the kind of in-depth reviews and planning that they wouldn’t usually have the time for.  This is particularly the case with the Department for Education wishing to reduce the burden on schools by cancelling, pausing or deferring several data collections and returns usually due in the coming weeks.  

From a procurement planning perspective one thing I always advise is to develop a contract register. It doesn’t have to be anything fancy, or involve the purchase of asset management software (although you may choose to do this). You just need a simple way of capturing in one document a list of all the contracts your school has and when they are due for review and renewal.

For me it’s a must do because you run several risks without one, the chief one being that there is a very high risk of the contract falling into a continuation with no ability to exit. Noting the renewal date in a register allows you to build in time beforehand to scrutinise the contract. You may discover that it doesn’t represent particularly good value, and this can give you grounds to renegotiate with the supplier. Remember, if the contract has a five-year life span and you miss renewal then it may click into another five-year span rather than go into a 12-month rolling basis. Don’t miss your window of opportunity or you will repent at leisure!

A contract register also allows you to take a much more strategic approach to planning your calendar, staggering renewals rather than having them fall on the same date, which is more common a problem than you would think. I know plenty of school business managers who feel locked into a routine of having all their contracts start on 1 September or thereabouts. This might at first glance appear to be a reasonable approach to planning to have contracts renew at the start of a school year as this could help budget planning.

In fact, it’s the worst approach to contract renewal. For one thing, the start of a school year is a crazily busy time. All of your pupils are returning, and new ones are starting. Then there are new staff, with all the HR and payroll administration implications they bring. Do you really want the hassle of renewing or starting several major new contracts off at the same time?

There are alternative approaches. You could bring forward your contract renewals to 1 August. In some of the big multi-academy trusts with sizeable, dedicated back office operations this is a good option for them. The beginning of January or Easter are other good options.

But how do you break your usual contract renewal schedule? Try to get a short-term extension to the contract or give notice of an early renewal. It is even better if you can have major renewals for high value, complex contracts in different years. This ensures contracts such as ICT managed services, catering, cleaning and grounds maintenance aren’t all renewing at the same time in the same year, but are staggered over a period of several years, ideally in January, Easter or August slots.

This term will also be a good opportunity to drill down on invoices and break down all of your costs. By taking this ‘open book’ approach you might come across charges for services that you don’t actually receive, or for services that you don’t actually need.  This is important as we once again find ourselves with a focus on reducing spend.

For many contracts it might appear that you have little wriggle room on costs, since labour is the bulk of many, and can’t be trimmed without a significant impact on the delivery of a service.

But there are areas where you can make savings. Waste management is a good example. It’s more costly to have conventional waste bins that go to landfill, so by swapping to recycling bins this can reduce costs which can be quite significant over a year. You could go one better by arranging for your catering food waste to go to an anaerobic digestion station which will deliver even more savings.

Another area to look at closely is washroom consumables, particularly if your contractor is purchasing them on your behalf.  One review we conducted recently for a client using our contract monitoring services, resulted in a saving of £15,000 per annum.  This was achieved simply by making adjustments to the hand soap, toilet roll and hand towel dispensers and buying the products in larger bottles and packs.

Taken individually, some savings will seem small in the context of a large school budget but remember, by nicking back a percentage on a small spend area the savings can accumulate into some really quite impressive savings.

We’re in strange times, but hopefully we’re nearing a time when things can get back to at least some kind of normal. In the meantime, the summer term is a window to at least make a little more sense of our bit of the world.

Lorraine Ashover is managing director of Minerva Procurement Consultancy Services Limited. Focused exclusively on the school sector, Minerva has helped schools tender £65 million worth of contracts and generated more than £2.5 million of revenue, refunds and ongoing annual savings for its clients over the past four years. 

www.minervapcs.com



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