How will academies procurement work?

The move away from a centrally directed and controlled education system, with local authorities at the helm, has been swift. Under the coalition the academies programme that was started under Labour has evolved and schools have been allowed to convert to academy status. Today there are roughly 650 academies.

Then there’s the free school programme, which will result in the establishment of a significant number of new schools.

What sponsored academies, convertor academies, free schools and the new wave of university technical colleges (all technically “academies”) have in common is that they are all independent of the local authority. Previously, most goods, services and works needed by these schools would have been procured by their local authority, which would have had significant experience of the process and how to take advantage of economies of scale.

Academies will have to procure their own goods and services. They will generally have little or no experience of procuring as a public body and will only be buying for themselves.

Unsurprisingly a number of schools have started to consider the benefits of cooperation. By banding together, rather than each of them going through the required procedure to choose a provider, they only have to carry out one procurement exercise and can use their combined purchasing power to achieve a better outcome.

Academies will generally have little or no experience of procuring

This approach raises a number of issues, particularly for the contractors and service providers that may be asked to participate in such exercises. Although the legal responsibility for running these procurements correctly will rest with the academies, contractors will need reassurance that they are not going to spend time and money bidding on projects that will not proceed to contract signature because a mistake was made earlier.

The first question is: who will the procuring body be? Will the academies form a special-purpose vehicle that will appoint the contractors or service providers and then “sell” the goods, services or works back to the academies? In this scenario it will be important to ensure that the special-purpose vehicle is correctly incorporated and set up and has the power and ability to procure such services. There also needs to be confirmation of buy-in from the individual academies.

An alternative is for one of the schools to be nominated as the lead body, which will procure a contractor/service provider that can then be used by other academies. If this approach is used then enough flexibility must be built into the procurement exercise to allow the other organisation to appoint the contractor for the relevant services.

In both instances, and in all situations where academies are coming together, contractors need to understand what the workstream will be in practice. For example, if the procurement is carried out on the understanding that 10 academies will be making an appointment to provide services, then bidders are likely to make assumptions in their pricing models. However, if only one academy actually makes an appointment will it still be a viable proposition?
In the London borough of Waltham Forest another option is being tried. The local authority is putting together a framework of contractors that can be called on by all schools in the borough - maintained schools and academies alike.

Recognising that academies serve children in their borough, and therefore to help them meet their statutory responsibilities, more local authorities may adopt this approach. From the contractors’ standpoint this will have the advantage of a single procurement exercise being run by experienced individuals with a potentially large workstream.

Matthew Wolton is director of TPP Law

This article was originally published under the title ’Academy awards’