The announcement by the government to continue its drive toward total academy conversion for schools in England has been high on the news agenda in recent weeks. The main point of discussion has been focused about the teaching standards provided to the children of the country, and coupled with the latest views from the NUT about exams, you can easily be distracted from one of the other important questions that must be considered. ‘Can the academies survive financially once they have total control of their budgets?’
Historically the financial decision that affects most businesses is how to ensure that expenditure does not exceed income. This point has previously been mute in the educational environment where a school’s income has been determined by the number of pupils it would accept in their yearly enrolment. Places were allocated by the LEA and there was little or no competition between schools in the state system.
Now that institutions have the opportunity to determine the number of pupils they accept, will academies who are not as popular be facing reductions in income that will force them to make difficult decisions?
One only need look at how the university landscape has changed over the last decade to see how their focus has now become ever more targeted toward recruitment, both domestically and overseas, to ensure income levels remain at the required level.
When the focus is then turned toward the management of this income there is a real threat that faces the survival of some academies and in some cases the level of teaching focus that pupils may be exposed to.
Why is this an issue? Previously the expenditure levels driven by usage and cost were heavily influenced by the local council or council approved buying groups who would provide and procure goods and services on their behalf.
As to how well these were purchased is for another debate but with future academies able to determine their own procurement strategy, how well placed are the decision makers within the academies to make these financial decisions, especially when OJEU framework rules need to be adhered to?
As Headmasters now become CEOs and Accounting Officers for these academies (effectively companies) it is clear that many academies lack the right skills or knowledge to best determine the large buying decisions that they make, and fulfil their duty to provide best value for any level of expenditure incurred.
A reliance by such decision makers on using incumbent buying groups or local council procurement instead of undertaking a full review of alternative sources of advice, has led to many examples whereby purchasing decisions have turned out to be costlier to an academy than necessary.
The markets that academies can access for their procurement requirements should not be limited to “education industry” experts. Rather best practice should dictate consideration around using alternative supply channels and not just settling for “more of the same”.
One area where knowledge of procurement procedures is especially varied is with regards the rules around when purchasing should be undertaken through European OJEU. Recently a tender request for a single new printer was issued asking for it to be submitted within OJEU regulations. Lack of knowledge or getting the wrong advice can cost time and money – neither of which academies have an abundant supply of.
As academies are required to operate more like businesses, their accountability has to be more like a business with a clear, transparent use of skills and knowledge available. Businesses are used to using outsourced expertise to provide a service with a higher level of knowledge and awareness of the markets, but at a fraction of the cost. Should not academies do likewise in order to ensure financial propriety and ultimately financial survival?
Whatever decisions are made the ultimate winner or loser in this situation is the pupil who can either benefit from the additional resources available for learning or conversely lose out from a reduction in these resources.