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There is a lesson from Carillion and from the early academy chains: big is not necessarily beautiful

Outsourcing simple tasks to large organisations: hopefully this is a fad that will soon be out of fashion

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Outsourcing simple tasks to large organisations: hopefully this is a fad that will soon be out of fashion

There’s an old expression; what goes around comes around. Over the years, I’ve seen many, many, circles completed: countless strategic pendula swinging back to where they started.

Currently, big is no longer beautiful: that’s clear. Schools up and down the country will feel the effects of the collapse of the gigantic service provider, Carillion. First to hit the headlines was the school meals service in Oxfordshire,  where children’s dinners are could be delivered by the fire service instead.

As a constructor, Carillion was involved in Private Finance Initiative (PFI) funded school builds: I came across a hopeful tweet that, if Carillion disappears, the PFI debts will be written off. Alas, you can bury a company but I fear the debt will live on as one of the commodities up for grabs in the administrators’ fire sale.

PFI was the brainchild of the Major and Blair governments: getting new schools and hospitals built quickly but kicking the issue of the repayment burden (currently, according to an NAO report this morning, in the region of £200 billion) into the long grass.

Going the way of Carillion

I’ve never understood why successive governments have insisted on outsourcing swathes of administrative functions to firms such as Carillion. I’m baffled by huge building companies turning their hands to running prisons, providing school meals, holding and processing data: what happened to cobblers sticking to their last, always a good rule in business? 

In truth, I don’t shriek in dismay at the thought of the state employing private contractors for some functions. A hospital doesn’t need its own painter on the payroll: get a local business in to redecorate! Schools buy stationery, computers, laptops, phones and everything else from commercial firms: it would be crazy to do anything else. As for school cleaning and meals, I have worked with both in-house and contracted-out arrangements. Both have strengths, both have weaknesses.

But governments convince themselves that big is beautiful – the bigger the contract the better. In the name of efficiency, they commission megafirms for tasks that used to be done by civil servants or local authority officials: the contractors tender so low to win the contract that they risk going the way of Carillion, and else ratchet up their income by means of extra-contractual additions. Any PFI-suffering headteacher will recognise that.

Large chains in difficulty

Academy chains were also the Blair government’s invention, subsequently pursued with vigour under successive Tory administrations. The current government no longer likes stand-alone academies: established single academies and free schools are pressured to form or join chains. Yet some of those large chains are in difficulty. The early ones grew way too fast and were subject to financial mismanagement and educational underachievement. The recent collapse of the Wakefield multi-academy trust (MAT) has been followed by recent suggestions of MATs asset-stripping schools and even of their CEOs – some paid vast sums – taking pay cuts to balance the books.

Are we finally waking up? Big is not necessarily beautiful. We’re assured that procurement is better on a large scale, such as through a MAT. Yet in individual independent schools, both large and small, I’ve found I can command sharper prices from suppliers merely by paying swiftly. In contrast, a MAT or Local Authority (or, by all accounts, Carillion) may take 30, 60 or even 100 days to settle the account. That’s no way to haggle.

Give me small and nimble, any day. Admittedly, small organisations go wrong, too: but when they fall they do less damage – and rarely encompass others in their ruin.

Dr Bernard Trafford is a writer, educationalist and musician. He is a former headteacher of the Royal Grammar School, Newcastle, and past chair of HMC. He is currently interim head of the Purcell School in Hertfordshire. He tweets @bernardtrafford

To read more of his columns, view his back catalogue

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