Schools, academies and Trusts need to think creatively about how they spend their money and manage their resources, while questioning whether there are better ways of sourcing and delivering vital services in a way that doesn’t compromise quality and still delivers savings.
Leaders understand the need for cost effective and efficient curriculum plans and the prudent management of staff structures and pay.However, in our performance driven world this can often be a tricky financial balancing act when faced with the need to retain your best staff or indeed recruit that transformational Head of Department.
Evaluating Costs and Identifying Financial Burdens
I decided that our Trust needed to think differently about how we managed our non-staffing costs. In our Trust there were obvious areas that placed a particular burden on our finances:
- The demand for, and cost of, supply teaching.
- The ever-rising staff absence insurance premiums needed to cover these supply costs.
- The purchase of goods and services and procurement in generalThe cost of supply teachers is going up for everyone, we spend around £750k a year on this area, an enormous portion of our education budget.
Following on from that Service Level Agreements and the purchase of goods and services account for whatever is left.
My financial team and I focused on these particular areas of spending to see if we could make substantial and long-lasting savings without diluting the quality of service or provision.
We decided to focus on staff absence cover first. Our answer was the creation of Education Mutual, a not-for-profit organisation designed to compete with traditional insurance companies.
The Advantages of the Mutual Model
Education Mutual provides a staff cover scheme which pools resources for the good of all. it is owned by its members (education providers) and does not have to make money for investors or shareholders.
The key aspect of this scheme is that any money left over goes back to our members in the form of a benefit, instead of profits for shareholders.
Since its formation in 2018 Education Mutual has had phenomenal success as a market disruptor and is now the third largest provider of staff cover in the country.
I am proud to say that Education Mutual has supported schools from the outset of this pandemic.We were the first staff absence provider to pay Covid claims as far back as June and we continue to do so. Living up to our strapline of ‘by schools for schools’.
As chairman of Education Mutual and CEO of the Bishop Wilkinson Catholic Education Trust I have been keen to spread this concept and philosophy into other key areas, so I decided to help pilot a new recruitment and supply agency across our Trust called Schools Mutual Services (SMS).We have been able to provide a supply service that:
- Provides high quality and reliable support staff and teachers for our schools
- Ensures fair pay for the staff employed by SMS but is also competitively priced.
- Gives back to schools by not taking excess profits out of the public purse.For example, the SMS daily rate for a Teaching Assistant Level 3 is £85 (the member of staff is paid £65) and for a Fully Qualified Teacher (FQT) it is £145 (the teacher is paid £120).
Since its first day of trading (in October 2020), SMS has become so successful that it is now ready to expand its service to schools across the North East.Bishop Wilkinson CET will have 48 schools by 2022 and a turnover of around £80m, meaning that almost every purchase of a good or service will be subject to very strict and often complicated financial purchase and procurement regulations.It is fair to say that there are a range of frameworks and routes identified by DfE designed to provide suitable and appropriate routes and guidance for academies.
However, that advice and guidance is not enough to help schools take advantage of this highly complex and competitive sector.The Barriers that Hinder School SavingsWe identified two major barriers that limit substantial commercial improvements and savings; firstly, our limited specialist knowledge, skill and time in this sector which in many cases means we are unable to get the very best outcome from this sector.
Secondly, there is a very fragmented and complex procurement and supply chain landscape not necessarily designed to support schools.We realised that we needed to create a specialist service that could operate between the procurement world and Trusts, in order to bridge this ever-widening gap.So, we established Education Commercial Services (ECS) which is a school led ‘paid-for’ service providing an intelligent commercial client on behalf of the MAT.
ECS has been formed primarily to work for Trusts focussing on upskilling their staff and utilising the existing procurement landscape to engage the market and drive and improve their service provision.
The service will also find the best and most appropriate solution for the Trusts; ensuring that savings are retained by the Trust and their schools.
ECS works on behalf of the Bishop Wilkinson Catholic Education Trust and in partnership with Value Match who are a company who provide us with procurement specialists and expertise.
Strong Financial Results
In September 2020 we invited a neighbouring Trust to share this procurement initiative with us. The results have been incredibly impressive.
Our two relatively large, efficient and growing Trusts with strong financials have achieved savings in excess of £564k for an investment level of £38.5k over an 8-month period.This work has covered numerous categories including ICT, Photocopiers, Office Supplies, Energy Efficiency Programmes and Catering.
The Trust teams have grown in skill, understanding and confidence in delivering efficient processes. I expect to make even greater savings this coming year.
I decided to help form Education Mutual, Schools Mutual Services and Education Commercial Services because I wanted better options for my Trust and for other schools and Trusts too.By forming alternatives to existing services that are simply not responding to the changing needs and financial challenges of schools, I believe we can deliver a way of re-cycling much needed money back to schools.
By Nick Hurn OBE, CEO Bishop Wilkinson Catholic Education Trust & Chairman of Education Mutual