The man who has to save pound;1.5bn

24th June 2005 at 01:00
Government efficiency targets could benefit schools, but many heads remain sceptical, reports Karen Day.

People keep reminding me that we need to save pound;2 million each day," says Ian Taylor, head of the Department for Education and Skills' new centre for procurement performance. Just a few weeks into his new job, the magnitude of his task is clear.

He has until 2008 to find pound;1.5bn of efficiency savings in education procurement; 35 per cent of the department's efficiency target. And with no mandatory powers, he will have to rely on coaxing and cajoling heads and education authorities into trying better ways of buying staff, goods and services. Potential targets include school insurance, catering, transport and even recruitment.

The centre, launched in April, is central to the Government's efficiency drive. Kick-started by Sir Peter Gershon's 2004 report into how the Government could save money when it goes shopping in the private sector, all departments have strict targets designed to release more resources and ensure Labour benefits from its extra investment.

For schools, this has huge potential benefits, with Whitehall keen to stress that savings will go straight back into individual school coffers.

Combined with schools gaining full control over their budgets from next April, it could mean real flexibility over cash, allowing headteachers to buy extra staff or equipment.

But there is still some cynicism surrounding the Gershon agenda, which will mean some public- sector workers losing their jobs. Unions and some heads still feel "efficiency" may mean cuts, poor services or a lot of effort for little return.

As Steve Sinnott, general secretary of the National Union of Teachers, warns: "One man's efficiencies are another man's cuts." Combating such scepticism is one of the many tasks of the CPP. With a staff of 19 specialists, its role is more of a broker than a heavy-handed watchdog.

The centre's staff will identify the best deals and examine what works in other sectors such as health. They will also try to take advantage of education's multi-million-pound purchasing power.

Mr Taylor describes it as "maximising procurement opportunities" and envisages that the centre will also share information. But getting on the right side of headteachers is vital if the centre is to have any impact and the DfES is to meet its targets. The fact that it appointed Mr Taylor, the former head of procurement at banking giant HBOS, shows just how seriously it takes reforming procurement.

Since his appointment, Mr Taylor has been touring the country trying to turn his "presumptions about education procurement" into concrete proposals. As a school governor for 12 years, he has a fair idea of what works and says it is a complex but fragmented picture.

"There needs to be much more co-ordination," he says. "There are some examples of good practice in universities and with consortiums of local authorities. But you still find schools that go off and do their own thing.

It's a rich picture, to say the least."

He says further education colleges have some "ground to make up" but this should make for some significant early gains.

The department has given Mr Taylor and his team, most of whom are yet to be appointed, a challenging remit. The efficiency technical notes, released by each department at the start of the year, gave a hint about the DfES's shopping list. Notably, all its early priority areas cover schools.

The department already has ordered a feasibility study into reducing school insurance costs, which rocket annually after summer holiday arson and vandalism. This is likely to look at whether schools and colleges can work as consortiums to drive down costs.

The CPP may also look at developing a model for catering contracts to ensure schools can achieve both value for money and healthy eating objectives. This could build on the sort of work its partner procurement agencies have already completed. The Treasury's Office of Government Commerce (OGC), for example, which regulates large contracts for Whitehall and local government, has already standardised contracts for Private Finance Initiative deals, shortening negotiation time.

School transport may also be up for review, as will the rather more sensitive area of teacher supply and recruitment. The NUT has already warned against using "erroneous standardised criteria" that could lead to "cheaper bodies" at the chalkface.

Steve Sinnott says: "What the unit should be doing is requiring local education authorities to organise pools of teachers. These clusters would cut out the middlemen of agencies. They claim they don't have the capacity, but some are beginning to do this." He says authorities in London and groups in the South-west have begun to establish teacher pools.

Interestingly, the CPP and NUT, which are yet to meet, appear to agree on one thing already. Mr Taylor says he will be looking at "maximising the terms" of supply cover, not replacing teachers. He too points to consortia of schools or local education authorities, including several in West Yorkshire, as the model to make savings, but these, he says, tend to be independent and need to work with the centre.

"There needs to be a degree of intervention and an understanding of what works best," he says. He is keen to promote larger consortia to buy goods and services, and points to the Yorkshire Purchasing Organisation as a model. Established in 1974, the YPO is run by 13 councils and has an annual turnover of pound;160m.

Mr Taylor also has plans to move into the realm of electronic auctions, a system favoured by the OGC. These have been slow to take off in other sectors, but work in a similar way to eBay, with suppliers bidding for contracts over a certain timescale. They have the advantage of being transparent, with clients viewing all the bids, and tend to work best with goods that have defined specifications, such as computers.

The OGC says the public sector has seen savings of between 20 and 25 per cent. Such online procurement is likely to play a large part in Taylor's strategy. He foresees an Amazon-style system with a combination of trading exchanges and online help and support from an education procurement community.

"But I can't promise this will happen in one year," he adds.

Mr Taylor's biggest challenge is undoubtedly convincing hundreds of heads and bursars to work with the CPP, however.

"If this is going to work, then headteachers need to see some significant returns," warns Catherine James, head of professional advice at the National Association of Head Teachers. "If we are talking about small-scale savings for what may turn out to be very bureaucratic methods, then we can't afford to go down that route."

Mr Taylor says he knows there need to be some "quick wins" and case studies to convince the sceptics. He says he is convinced of the sincerity of the Government's efficiency agenda and intends to work with unions, membership bodies and local authorities to spread his message. He knows it is impossible to persuade every headteacher personally, but with his ideas of online communication he hopes he can reach the masses.

"I will be making mistakes and I'm pretty sure headteachers will tell me off. But I'd rather make progress and learn from mistakes. That way, in year three we don't make any."

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