Business leaders say the public sector could save at least 25 billion pounds a year by reforming the way it buys goods and services. In a report today the Institute of Directors argues that within three years a radical restructuring of public sector procurement could bring annual savings of 15 billion a year and greater use of shared services and outsourcing could save a further 10 billion pounds.

The IoD says politicians talk about the need to cut waste, but rarely give any detail on how to achieve this. Its report, it says, is a much-needed blueprint. If politicians had the will and began the restructuring immediately the changes could be made within 12 months and deliver savings within three years.

The report says the UK public sector spends 220 billion pounds a year on procurement, accounting for a third of Government expenditure and costing 3,500 pounds for each person in the country. Despite some areas of excellence and good collaborative initiatives, the Institute says, the majority of public procurement spending is so fragmented that big potential savings are being missed. It believes the problem is that the public sector organises itself on the “corner shop” model, with local authorities, NHS trusts and small central Government departments each doing their own thing.

It says the solution is to create an integrated public sector procurement and outsourcing structure with a single leadership point that all public sector bodies would have to use. The report’s author, Colin Cram, who is a leading public procurement specialist, said: “A step change is long overdue in the way public sector procurement is organised and managed. Its complexity does not excuse looking to the best private sector models, for example, companies like Tesco.”

Teachers students, parents and the general public still see A-levels and GCSEs in a positive light according to a new survey. The study, carried out for Ofqual the exams regulator, by Ipsos MORI, found that the number of teachers with concerns about A-levels has grown.

The national survey has been carried out each year since 2003 to track perceptions of the school examinations system. The main findings this year show the view of the A-level system remains largely positive,in keeping with previous years. Confidence in the GCSE system overall remains high and is unchanged from the 2008 level.

There had, though, been a slight increase in the proportion of A-level teachers who have concerns about the accuracy and quality of marking. The study shows that while awareness of Ofqual remains low and unchanged among the general public it has risen significantly among teachers. The proportion of them who reported that the organisation was either very or fairly effective had risen to 31 per cent compared with 16 per cent in 2008.

Kathleen Tattersall, Ofqual’s chair, was pleased people’s perceptions of A levels and GCSEs were still positive but added: “The survey also shows us that there is more work to do, and we are not complacent. We will continue to work with the awarding organisations to ensure they have the systems in place to continue to deliver high-quality qualifications and that the awarding process is as accurate as it can be, ensuring learners get the grades their work deserves.”

By Phil Neal

Budget are coming under pressure across the public services. Although education is a priority with some ring fencing, there will be no exemption from the pain of cuts. The author offers a range of suggestions for pain free cost savings.

As the next election approaches, the state of the UK’s economy continues to be a hot topic and politicians from all parties are becoming increasingly vociferous in laying out their plans for what must be done to sustain financial recovery. Cost cutting remains a major focus for the public sector and many authorities are already putting plans in place to deliver services more efficiently against a backdrop of much tighter budgeting in the years ahead.

Few would dispute that education is better funded now than it has been for years. However, in the current economic climate, schools are unlikely to be immune to the swing of the post-recession axe. There are a few small changes authorities could make today which could make a big difference in the future, should belt tightening impact upon school budgets.
But how can councils advise schools on how to make savings? Probably the most logical first step is to ensure financial management systems are being used effectively in their schools.

Tightening the belt

Better financial management will mean that governors and school leaders know exactly where school money is going and what the impact of any additional spending is. Switching to eProcurement will also help schools save money. “It is increasingly important for schools to make the most of their funding,” says Ian Taylor, commercial director at the Department for Children, Schools and Families.

In some local authorities, schools are using the DCSF’s OPEN portal which allows them to shop online and compare prices easily from different suppliers. They can purchase and pay for goods automatically from their financial management system. It means better prices, a better audit trail and less administration time spent on this task.

“The money and time schools save using OPEN can be ploughed back into improving education – benefiting everyone and allowing schools to make the most of their resources,” says Taylor.

The schools I have spoken to piloting the scheme in the Sandwell area seem to agree. “It is far simpler to compare prices than sifting through hard copies of catalogues as it is all done for you. We purchased a small item; some tabs for children to make calendars before Christmas, and found a supplier that was £1 per item cheaper than the rest, so we saved £250 on this one purchase,” says Karen Lowe, finance officer at St Martin’s Primary School. “It is about making sure every penny counts.”

A rather simple change – the payment of invoices by BACs instead of cheques – can reduce the amount of time taken to authorise and sign cheques. For an average secondary school this results in a saving amounting to £3.5k per year, according to our calculations. Most schools I know could find a good home for that sort of money.

Working differently

Another way of saving money in the long term is to switch to communicating online rather than by paper. Ray Tarleton, principal at South Dartmoor Community College, is an advocate of this approach, “The future may be leaner and meaner but it is also greener with technology empowering schools to work differently. The use of online communication instead of the printed word can allow schools to save thousands of pounds.

“One large photocopied pack for twenty governors sent by post used to cost in the region of £300 to produce. Now we email everything and use on-screen facilities to project the papers at meetings. When we carried out an anti-bullying survey recently the questionnaires were completed online – a saving of around £1,000.”

There are instant text messaging and email facilities to send messages to parents rather than using letters, and Learning Gateway technology which can offer a good alternative to paper-based pupil reporting. Parents are presented with much more detailed information on their child’s behaviour, attendance and progress at school online and the surveys that Tarleton describes are easy to set up.

“Think of the forests saved when all schools communicate in this way,” says Tarleton. “And the amount of resources, printing time and labour. There will be less cash to spare so let’s make the technology work for us, provide more effective communication and even help save the planet at the same time.”

Look at what you have got

Schools often look at purchasing new technology to help them meet a specific requirement. There are pupil tracking systems or software available, for instance, that can help schools with the self-evaluation process or monitoring behaviour. In fact, most schools have already bought and paid for these resources in their management information system or other technology purchased over the years. They do not necessarily need to spend more money to work more effectively.

Additional savings can be made in authorities that opt to procure technology on behalf of their schools. This allows them to take advantage of available discounts. Councils can also invest in centrally-hosted IT systems to reduce costs. This means that schools do not have to pay for servers and IT support services individually as these can be managed by the authority.

Brighter futures

As the wise financial guru, Warren Buffet put it; “Someone’s sitting in the shade today because someone planted a tree a long time ago.” Many authorities are already starting to plant some trees of their own and this is key to ensuring they can cope with potential leaner times to come. Preparation is after all the key to success.

Phil Neal is Managing Director of SIMS for Capita Children’s Services. Capita supply 22,000 schools with systems that help with pupil and financial management.

The Government’s Decent Homes Programme is being criticised by a group of MPs who say huge amounts of money have been spent without there being enough information on the impact of the scheme. The Public Accounts Committee says initial estimates of the cost failed to take account of the cost to local councils and landlords.

The MPs have been investigating the effectiveness of the Department for Communities and Local Government and the Homes and Communities Agency in overseeing the Programme.

More than a million homes have been improved under the initiative since 2001 and the report says the living standards of vulnerable households have benefited greatly from the installation of new kitchens, bathrooms and heating systems. The MPs also point to wider benefits, including more tenant involvement in decisions and the creation of jobs in deprived areas. But the committee points to a generally weak approach to financial control and project management and says the DCLG still has no reliable statistics on the number of homes made decent or not. Their report calls for the Department to get a grip on the Programme and introduce improvements in almost every aspect of its management.

The Committee chairman, the Conservative MP, Edward Leigh, said the DCLG’s initial estimate that the scheme would cost the social housing sector 19 billion pounds was unreliable. “The Department had failed to take into account key factors such as the cost of the Programme not only to local authorities but also to Social Registered Landlords,” he added.

Council leaders have called for a dramatic reduction in the amount of taxpayers’ money being spent on inspecting and assessing local authorities. The Local Government Association said the current cost of the new Comprehensive Area Assessment system is unsustainable.

The new regime replaced Comprehensive Performance Assessment in April last year and was heralded as being less of a burden on councils but focused on the priorities of a specific area. Now the LGA has analysed evidence from case studies in five authorities, which shows that for one council the cost of inspection had more than quadrupled. A second council’s bill had doubled and only one of the five had seen a significant reduction.

The LGA said the studies backed up the findings of its survey at the end of 2009 when almost two thirds of respondents disagreed that CAA had reduced the burden of inspection. The Association recently set out the ways it wanted the second year of CAA’s to be applied so that all requirements were met. Its priorities included a lighter touch for high-performing authorities, more focus by inspectors on encouraging improvement on issues identified in the first year, and more joining up of collective activity by inspectors.

David Parsons, Chairman of the Improvement Board at the LGA, said councils needed to be able to focus their resources on delivering front line services so inspection costs should be kept to a minimum. “Whatever researchers say about the performance of CAA, our own in depth analysis clearly shows the costs are climbing for at least some authorities, and that isn’t good enough,” Councillor Parsons said.

This report is published by the six independent inspectorates and it explains how well the £200 billion spent on local public services is meeting people’s needs. It sets out what we know about what works to guide national and local policymakers. The report also provides information to help local public services overcome some of the common challenges they face.

The Oneplace website is a unique new resource for local people, those managing local public bodies, and policy makers. It contains performance information to help people hold to account those responsible for their local public services.

Oneplace highlights examples of success and innovation. Local public services have found innovative ways to improve in every area of their activity; examples show them tackling some of the toughest problems.

Some forward-thinking local public bodies are already seeking to improve economy and efficiency ahead of expected reductions in budgets.

Local public bodies need to learn from each other and work more closely together if they are to improve services and increase value for money. This is the conclusion from the first Oneplace national overview report.

Comprehensive Area Assessments were published on the Oneplace website in December 2009 and they examine how well local public services meet the needs of citizens, service users and taxpayers.

The report is available at direct.gov.
http://oneplace.direct.gov.uk/SiteCollectionDocuments/20100224oneplacenationaloverview.pdf

Local authorities can have a big impact on reducing the number of young people who are not in education, employment or training – the so-called NEETs – according to a report from Ofsted. It highlights how 12 local authorities have successfully attracted some of the most difficult young people to reach into work or learning.

“Reducing the numbers of young people not in education, employment or training: what works and why”, says the proportion of young people in the category is still rising but the most effective local authorities are working with various partners, including some in the voluntary and community sectors, to understand the young people’s needs.

Ofsted inspectors spoke to more than 700 young people and visited 28 schools, 18 colleges and 84 voluntary sector, training and other providers across the country. Her Majesty’s Chief Inspector, Christine Gilbert, said the report showed clearly what could be done to help even those young people with the most complex needs. “I hope local authorities and their partners learn from the examples featured in this report so that they can fully contribute to creating better life chances for all young people,” she said.

Today’s report details how councils have worked in close collaboration with schools, community organisations and voluntary groups to reach out to young people by setting up interview and CV workshops, organising opportunities for volunteering and facilitating work-placements and management training programmes. Alongside opportunities to gain relevant vocational qualifications such initiatives had succeeded in opening doors for young people to move onto college, apprenticeships, or jobs.

Education will be an important issue for first time voters when they go to the polls for the forthcoming General Election. Research by the independent education foundation, Edge, has found two fifths of young people between 18 and 22 believe education is more important now than it was at the last election.

Other significant issues for them are employment, the economy and health and social care. More than a third of the young people said they did not think education worked well and that they would make a number of changes if they were given the opportunity. More than three quarters said they would introduce more practical and vocational learning, almost as many wanted increased work-based options, and more than 70 per cent suggested a broader curriculum. First time voters also called on the Government to ensure there were enough university places for the number of people who wanted to go into higher education.

The young voters believed Labour and the Conservatives were neck and neck as far as which had the best education policy. Meanwhile 43 per cent of them did not know if there were significant differences in the main parties’ education policies, which Edge believes suggests that the parties are failing to get their messages across to first-time voters.

The Chairman of Edge, Lord Baker, said: “The time is right for the next Government to make sure the current system helps all young people realise their individual talents. They must be able to recognise the many paths to success that come from a high quality education combining academic, practical and vocational learning.”

The National Housing and Planning Advice Unit has developed three new affordability indicators to show the ability to access home ownership and the affordability of maintaining a mortgage or renting in the private sector.

In the past decade there has been a deterioration in the affordability of homeownership while the affordability of private renting has remained broadly stable. In response the Unit developed three new indicators: the deposit measure – deposit required as a proportion of take home household income, mortgage cost- the costs as a proportion of take home household income, and rents – the rent as a proportion of take home household income.

In preparing these indicators the Unit has sought to use measures that reflect the homes that first-time buyers actually buy and the incomes that they have, within the limitations of the available data sources.

In many cases more than one income is used to pay the mortgage or the rent. To reflect this, the Unit has constructed a ‘typical household’ income which consists of one lower quartile earnings and one median earnings, this reflects both the typical income and the relative earnings in a young two earner household.

The National Housing and Planning Advice Unit was established in response to the pressing issue of housing affordability highlighted by Kate Barker’s Review of Housing Supply. It is a non-departmental public body, sponsored by Communities and Local Government, designated to provide independent advice on affordability matters to the Government, Regional Assemblies and other stakeholders with an interest in the housing market.

The document is available from CLG. http://www.communities.gov.uk/documents/507390/pdf/1465717.pdf

The Audit Commission is calling for greater openness about pay-off deals for council chief executives. In a report today it says 37 outgoing executives received more than nine million pounds and it is making recommendations designed to protect public money and the rights of those concerned.

The report, ‘By mutual agreement’, says that 30 per cent of departing council chief executives received pay-offs between January 2007, when new rules came into effect, and September last year. In all there were 37 agreed severance packages for chief executives worth a total of 9.5 million pounds. Forty per cent of this was paid to pension funds rather than as cash.

Of those getting the pay-offs only six took up other senior council jobs within a year but one in seven single tier or county councils has made a pay-off and the rate seems to be growing. The average cost of each severance package was almost double the annual basic salary and in four cases it was more than three times the executives’ yearly pay.

The Commission says in some cases competent chief executives have lost their jobs needlessly while less effective individuals have been paid-off rather than dismissed. It also warns that controversial pay-offs can damage the reputation of an authority and it wants all deals to be more transparent.

The Commission says settlements should be reviewed by scrutiny or remuneration committees and that details should be published shortly after they are agreed. Councils should also consider whether to include so-called ‘pre-nuptial’ clauses in contracts, setting out the grounds and payments for severance. The report criticises the management of chief executives’ performance and says officers and councillors should deal with difficulties at an early stage, perhaps using outside mediators, and avoid a ‘knee jerk’ inclination to severance.