Profligate spenders told to cut costs

3rd November 2006 at 00:00
Auditors tell colleges that pound;14,500 on plastic plants is not the best use of cash

Shopaholic colleges will be forced to rein in spending after the discovery that one had spent more than pound;14,000 a year on plastic plants.

"Maverick buying" and careless deal-making is wasting an average of nearly pound;200,000 for each of England's 384 colleges, according to a National Audit Office report.

At Grimsby Institute of Further and Higher Education, staff were spending pound;14,500 a year hiring artificial pot plants to decorate the offices.

After the college appointed a purchasing manager, it was discovered they could be bought outright for just pound;400 due to the length of time they had been leased.

The report said colleges should be able to cut 5 per cent from the pound;1.6 billion total spending on goods and services. The pound;75 million could be invested back in teaching. The Government spending watchdog also says most colleges fail to keep up with modern procurement practices. The success of a small minority showed what could be achieved.

Grimsby institute was praised for improving its spending control over the last three years. As well as ending the plastic plant spree, it cut the price of workwear for teachers and students on vocational courses by 26 per cent by doing a bulk deal with one supplier.

According to the survey of 158 colleges, most have someone with overall responsibility for purchasing, but only 14 per cent have had any training for the role. In an average college, 13 people could award external contracts. At one institution, 65 members of staff were able to spend college cash.

"Having every budget-holder research and purchase each item or service directly is not an efficient use of their time, and many are unlikely to have the skills and commercial experience to negotiate good deals," the report said.

But colleges doubt that the potential savings claimed by the NAO were realistic. Smaller colleges were especially sceptical and 15 out of 18 in a focus group said they thought any savings would be wiped out by the cost and time required to achieve them.

Three-quarters of colleges were unable to tell the NAO how much they spent on a range of items from catering supplies to grounds maintenance. They complained that it would take too long to collate.

The Buying Support Agency, a consultancy firm, said colleges did usually hold this information, although they had little experience in analysing it to ensure they got the best deals.

Colleges were also guilty of signing contracts without putting them out to tender, as is usually expected for deals worth more than pound;144,000.

One in ten had spent more than pound;250,000 without tendering, although colleges point out that larger capital projects would be overseen by the Learning and Skills Council.

Julian Gravatt, director of funding and development at the Association of Colleges, said the survey was carried out six months ago and colleges had improved.

He said: "People have taken the message that they need to do more about this, and they are doing it."

The LSC has tried to improve buying decisions by sending procurement experts to every college in England. By this July, the advisers had reached half of colleges.

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