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Cost benefit analysis – How taking services in-house helped our trust

Dissatisfied with the processes and expense involved in sourcing supply cover and dealing with commercial providers, trust CEO Nick Hurn MBE opted to take matters in-house…

  • Cost benefit analysis – How taking services in-house helped our trust

Schools, academies and trusts need to think creatively about how they spend their money and manage their resources.

At the same time, they have to regularly question whether there might be a better means of sourcing and delivering vital services in a way that doesn’t compromise on quality while delivering savings where possible.

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.

I therefore decided that our trust needed to think differently about how we managed our non-staffing costs and services. Following the rollout of the National Tutoring Programme, we decided to pause and reflect on what was on offer from the array of national and regional providers.

We quickly came to the conclusion as a trust that we could provide a far better programme ourselves – we could provide lots of very high-quality teachers for all subjects, and manage the quality and the organisation more effectively by taking matters in-house.

Our delivery would be more focused, more flexible and more successful, and we thought it far better to recycle our catch-up fund to staff within our schools.

Home-grown tutoring

The plan we devised would see staff working with students from a school in our trust, but not their home school. Our tutoring would be carried out via weekly online sessions using Microsoft Teams, which tutors would arrange and record for safeguarding purposes, and use to share content with students while obtaining feedback as they went along. Each session would involve students working in pairs or trios.

We decided that each cohort would experience 10 weeks of tutoring, before we started again with a new set of students for another 10 weeks. Schools in the trust would nominate those students they felt might benefit from our tuition service, and then contact their parents/carers to offer the service and let them know that the tutor will be in touch.

Our tutors would then receive from the schools the parents/carers’ contact details and students’ email addresses. From there, the tutor would proceed to introduce themselves to the parents/carers and let them know when the weekly sessions would be scheduled. After delivering the session via Teams, staff would be paid £30 per hour for their efforts, though with oncosts this figure is likely to reach £38 to £39 per hour.

Supply and demand

Admittedly, the model outlined above is considerably more expensive than the NTP programme equivalent, but we’re confident that our Trust- wide plan will have a much greater and longer lasting impact on the outcomes of all children, particularly those of the most vulnerable and disadvantaged.

The cost of supply is going up for everyone. We spend around £750k a year on this area ourselves, which represents 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 any substantial and long-lasting savings, without diluting the quality of service or provision.

We decided to focus on the issue of staff absence cover first, which led to the creation of Education Mutual, as an alternative to the traditional insurance company model. Education Mutual provides us with a staff cover scheme in which resources are pooled for the good of all. It’s owned by its members – education providers – and has no obligation to make money for investors or
shareholders.

The key advantage of this scheme is that any money left over goes back to our members in the form of a benefit, rather than as profits and dividends to third parties. Since its formation in 2018, Education Mutual has become the third largest provider of staff cover in the country, and supported schools throughout the pandemic – we were the first staff absence provider to pay COVID claims as far back as June 2020, and continue to do so.

Progress before profits

As CEO of the Bishop Wilkinson Catholic Education Trust and chairman of Education Mutual, I’ve been keen to extend this concept and philosophy into other areas.

As such, we’ve piloted a new recruitment and supply agency across our trust called Schools Mutual Services, which has enabled us to provide a supply service that deploys high quality, reliable support staff and teachers to our schools, ensures fair pay for SMS-employed staff while being competitively priced, and gives back to schools by not taking excess profits out of the public purse.

For example, the SMS daily rate for a TA Level 3 is £85, with the member of staff paid £65. For a Fully Qualified Teacher (FQT), the daily rate is £145 and the teacher pay £120. Having commenced trading in October 2020, SMS has proved to be successful enough that it’s now ready to expand into schools across the North East.

Bishop Wilkinson CET will meanwhile have 48 schools by 2022 and a turnover of around £80m. That means that almost every purchase of a good or service will be subject to very strict, and often complicated financial purchase and procurement regulations.

There are multiple frameworks and routes identified by the DfE that are intended to provide appropriate routes and guidance for academies, but this advice and guidance isn’t enough to help schools take advantage of this highly complex and competitive sector.

We identified two major barriers that limited the otherwise substantial commercial improvements and savings we could make: our own limited specialist knowledge, skill and expertise within the sector, causing us to miss out on the opportunities available, and the continued existence of a highly fragmented and complex procurement and supply chain landscape that’s not necessarily designed to support schools.

Commercial know-how

Having identified the need for a new type of specialist service that could bridge this ever-widening gap between suppliers and trusts, we formed Education Commercial Services – a school-led, paid for service that acts as a commercial client on behalf of MATs.

ECS primarily works with trusts on upskilling their staff and engaging with the procurement market to deliver improvements to their service provision.

Working in partnership with Value Match – a specialist provider of procurement knowledge and specialists – ECS’ objective is to locate the best and most appropriate solutions for trusts, while ensuring that any accompanying savings are retained by each trust and its schools.

I wanted to help form Education Mutual, Schools Mutual Services and Education Commercial Services because I wanted better options – not just for my trust, but other schools and trusts too. By creating alternatives to existing arrangements that aren’t sufficiently responsive to schools’ ever-changing needs and financial challenges, I believe we can deliver a way of recycling some much- needed money back into our schools.

Savings in practice

In September 2020, we invited a neighbouring trust to participate in our Education Commercial Services procurement initiative alongside ourselves, and the results have been hugely impressive. Our two trusts, both relatively large, efficient and growing, currently boast strong financials and have achieved savings in excess of £564k, for an investment level of £38.5k over an eight- month period.

Thus far, this work has covered numerous categories, including ICT, photocopiers, office supplies, energy efficiency programmes and catering. The teams of both trusts have grown in skill, understanding and confidence, and succeeded in delivering ever-more efficient processes, to the extent that we expect to be making even bigger savings over the coming year.


Nick Hurn is CEO of the Bishop Wilkinson Catholic Education Trust.

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