Big school spenders

24th February 2006 at 00:00
Headteachers in England are spending pound;27 billion a year between them ... but what is the cash going on? And which companies are benefitting the most from education? Michael Shaw reports

As spending money goes, pound;27 billion is a big chunk of cash. It is more than Ethiopia's gross domestic product and slightly less than the personal fortune of Bill Gates, the Microsoft founder.

It is also the amount that state schools in England spend from their own budgets each year.

Modern headteachers are increasingly like managers of small businesses, with millions of pounds at their disposal. A typical infant school spends around pound;800,000 annually, while a large secondary can spend more than pound;5 million.

As the financial flexibility and independence of schools grows, so does the competition among the hundreds of companies which clamour for their business. So what are schools buying - and which companies are benefiting?

The good news is that most of the cash is still spent on staff salaries: Pounds 16bn on teachers, pound;3bn on teaching assistants and nearly pound;3bn on administrators and other support staff. The remainder - about pound;5.6bn - goes on a wide array of services (see pie chart).

Figuring out which companies are gaining the most trade from schools can be tricky. It is often difficult for them to calculate or they are unwilling to reveal it for reasons of commercial sensitivity, so estimates are sometimes required.


Around pound;1.2bn goes on "learning resources", a broad category covering books, furniture, classroom equipment and school trips.

Surveys by the Educational Publishers Council suggest that primary and secondary schools in England are spending around pound;150m of that on books.

The three biggest names among the 71 publishing companies regularly selling to UK schools are Harcourt, Nelson Thornes and Oxford University Press.

Harcourt, a divison of Reed Elsevier, has sales outside the US of pound;94m, principally in the UK, Australia and Southern Africa.

The education wing of the publishing giant Pearson has a total international turnover of pound;587m, mainly from book sales but also revenues from the exam board Edexcel which it bought in 2003. Pearson makes at least 15 per cent of its total sales in the UK, so a turnover from UK education of pound;88m is feasible. But most of its books are aimed at higher education rather than schools.


The amount which schools are willing to spend on furniture appears to vary.

Furniture manufacturers in the British Educational Suppliers Association report that, while many specialist companies are busy designing the perfect chairs for children's posture and attention, some headteachers prefer to load up vans with the cheapest stools they can find in Ikea.

More than 80 UK companies list themselves as school furniture providers, the largest of which appear to be ESA McIntosh and Findel. ESA McIntosh, based in Scotland, has a turnover of pound;20m. But it is dwarfed by Findel, which has its headquarters in Greater Manchester, and sells a broad range of products including furniture, stationery and laboratory supplies through divisions including Unilab and Philip Harris. Education sales made up pound;231m of its 20045 turnover.

Building maintenance and improvement

Suppliers of hardware, paint and carpeting, as well as local contractors, are among the main companies to benefit from the pound;550.5m which schools spend on maintaining their buildings. This does not include salaries for premises staff or work done by local authorities.

Catering supplies

Much of the pound;491.2m spent goes, predictably, on food, but an increasing amount is spent on contracts with private catering firms. The largest here is Scolarest, which has around 1,900 school contracts in the UK and is a wing of the international catering company Compass.

It estimates that its UK turnover from education is pound;253m of which around pound;200m comes from state schools and the rest from universities, nurseries and private schools.

Gains in recent years include a pound;2m deal with Downside, the Roman Catholic private school in Somerset, and renewed contracts totalling more than pound;11m with Millfield school in Somerset and Durham county council.

In second place is Sodexho, although it is the biggest school caterer internationally, with worldwide education sales of around pound;1.9bn.


Sales of computer software and systems to UK schools are dominated by RM, the Oxfordshire-based company which was formerly Research Machines. It had a turnover of pound;263m last year, around 70 per cent of which came directly from schools. As well as selling its own creations such as Easiteach and MathsAlive, it also supplies software from other firms including Adobe and Microsoft. Microsoft claims that it benefits directly from around 3 per cent of UK school ICT sales, suggesting it earns at least pound;16m from schools in England.

Other key companies include Promethean, the interactive whiteboard seller which had a turnover of pound;70m last year, around 70 per cent from the UK, and Smart, a Canadian company which sold more than pound;50m of whiteboards to UK schools in 2005. Expenditure by schools on "IT learning resources" - which does not include those computers for admin or fitted as part of new builds - stands at pound;441.9m a year.

Agency supply staff

Schools in England spend pound;383m a year on staff from supply agencies.

The leading business is Select Education, which was paid pound;70m by schools last year. Other key companies in this field include Teaching Personnel, which had a turnover of pound;30m, TimePlan, Reed Recruitment, and Capita.

Administrative supplies

Not all the pound;379m that schools spend on admin supplies goes on paperclips and photocopying. It also covers phone bills and any computers and software systems which are not used for teaching.

Businesses to benefit include Capita. The majority of the estimated pound;140m it makes annually from education work in the UK is from contracts with local authorities and the Department for Education and Skills. But schools do pay it directly for its supply staff and spend at least pound;20m on its Sims system for administering pupil data.

Bought-in professional services

Local authorities are the main organisations to gain from the pound;570m which schools spend on "bought-in services", followed by self-employed consultants.

John Chowcat, general secretary of the consultants and inspectors'

association Aspect, said: "Even when schools are working with self-employed consultants, it will often be someone they know from when they used to be an LEA adviser."

Three-fifths of the money goes on services relating to management, personnel, and legal matters and the rest on the curriculum. Companies including Cambridge Education Associates, which has a total turnover of pound;54m, are offering some consultancy directly to schools but gain the vast bulk of their work from local authorities and Ofsted.


Zurich has the largest share of the education insurance market, according to the Association of British Insurers. However, Zurich stressed that two-thirds of the pound;311m which schools in England spend goes to LEAs rather than to insurance companies.


Electricity companies have no way of separating the turnover they make from schools. But if schools pick electricity companies in the same proportions as fellow organisations classified as businesses, then Centrica gets pound;61m and E.ON UK pound;56m of the pound;278m that schools spend each year.

Examination fees

Surveys by the Association of School and College Leaders have suggested that schools are spending pound;380m a year on exam fees, though government figures suggest the total for England may be closer to pound;198m.

The exam board with the largest turnover is AQA, which got pound;140m last year, while OCR, which is also non-profit-making, received pound;80m in 20034.

The turnover for Edexcel - which its owner Pearson will not reveal - is believed to be slightly larger than OCR.

Indirect employer expenses

Schools spend pound;98.1m a year on "indirect employer expenses", a broad category that includes staff travel costs and pensions. It also covers recruitment expenses such as relocation payments, interviews and job advertising. Companies to benefit include The TES.


Sodexho (catering) pound;1.9bn

Compass (catering) pound;1.4bn

Harcourt (books testing) pound;868m

Pearson Education (books testing) pound;587m

RM (ICT supplies) pound;263m

Findel (furniture and lab equipment) pound;231m

(Most recently-published international turnover from education sales and contracts)

Log-in as an existing print or digital subscriber

Forgotten your subscriber ID?


To access this content and the full TES archive, subscribe now.

View subscriber offers


Get TES online and delivered to your door – for less than the price of a coffee

Save 33% off the cover price with this great subscription offer. Every copy delivered to your door by first-class post, plus full access to TES online and the TES app for just £1.90 per week.
Subscribers also enjoy a range of fantastic offers and benefits worth over £270:

  • Discounts off TES Institute courses
  • Access over 200,000 articles in the TES online archive
  • Free Tastecard membership worth £79.99
  • Discounts with Zipcar,, Virgin Wines and other partners
Order your low-cost subscription today