Staff or stuff? The £3bn question

by Ben Gibbs, Head of Schools

 As the government’s consultation on the new national funding formula draws to a close, Communications Management’s Head of Schools, Ben Gibbs, calls on school providers to come together ahead of the big squeeze.  

The scale of the financial crisis facing schools is potentially catastrophic. Recent reports from the National Audit Office and Education Policy Institute predict that rising costs will mean that schools are facing budget cuts of around 8-10% in real terms by 2019-20. In really real terms, this is a loss of about two teachers for the average primary school, and about six teachers for the average secondary.

For many schools, this gloomy prospect is made worse by the realisation that the government’s much vaunted ‘fairer funding formula’ may not turn out to be as fair as one might expect. Initially proposed in 2011 to address the way per pupil funding is calculated for each local authority according to some illogical and long since forgotten formula, successive Secretaries of State have fudged and reneged, leaving Justine Greening to serve up what looks like a dog’s dinner of a reform; no more fair, no more logical, and offering even less stability and more complexity than the current one.

My children’s schools in Cambridgeshire – for many years the county with the lowest per pupil school funding in England, and relatively little in historic capital investment from other sources – have recently written to all parents, urging us to make our concerns known to the government. It’s a desperate attempt by schools which can only see this as an existential battle.

As Laura McInerney highlights brilliantly in her recent piece for the Guardian, the same Department that fails its own financial tests believes it’s possible for the schools system to make around £3bn in efficiency savings – £1.7bn in ‘workforce-related’ costs (i.e. teachers), and £1.3bn in ‘procurement spending’ – but offers no clues as to how.

That’s tough enough for schools to contemplate, but could also spell disaster for many of the organisations that sell products and services to schools. £1.3bn is a massive chunk – as much as a quarter, depending on which measure one uses – of the total discretionary pot available for schools to spend on ‘stuff’. And given that Heads will forego stuff before they forego staff, it’s likely that the market for school supplies in England will take a fairly big hit, fairly soon.

Not that one could tell this at the Education Show last week in Birmingham.

Packed to the rafters with its usual range of exuberant suppliers, offering everything from pens and playgrounds to WAN infrastructure and ground-source heatpumps, it looked to all the world – just like BETT had a couple of months back – that everything was tickety-boo. Business as usual. Yes, there was a hint of concern in the voices (and eyes, always the eyes) of the senior people I cornered, but here they were, in their well-appointed booths, and – more importantly – here were the punters too, in numbers barely distinguishable from past events in better times.

This is, of course, how things are supposed to be; bullish, confident, speculative, optimistic. But one would like to think that these companies, back at base and with the benefit of an afternoon’s strategy workshop ahead of them, are beginning to think quite differently about how to compete for market share in the face of structural restraint and contraction.

As ever, success in this vastly more competitive arena will depend on how a company differentiates itself from its competitors, but also how compellingly it dramatises the benefits of its product or service in a language that schools can understand. The fact is that schools will still need things. It’s just that they will have more of an eye than before on value, and will apply greater discretion in supplier selection.

One of the things I think schools will respond very positively to is some consolidation in certain areas of the market. No, I’ll go further. I think that it is beholden on companies in certain areas of the market to work together for the benefit of the sector. To set aside their competitive differences and present a more unified offer – and a less complex choice – to schools. What do I mean by that?

Well, for example, we all know that schools now generate a huge amount of data on the performance of their students, but that they actually only use a very small proportion of that data in their work to improve progress and outcomes. They are not only not getting value for money out of the systems they have; they are also not realising the potential benefits of the data they have. Yet we also know that there are a number of companies out there with fantastic technology that would help schools use more of their data in more meaningful ways, and enable them to focus resources more efficiently to achieve even better outcomes for their students, potentially for less money.

So why are schools not buying this stuff?

At a recent seminar organised by The Assignment Report, each of the data-oriented companies that took to the stage said the same thing; that too many schools were not prepared to invest in something they knew would require an ‘implementation hump’ (that initial period when the effort and cost of implementing a new system feels like it outweighs the benefit to be realised). Of course, what this really means is that they have not fully understood the significance of the benefit.

It is also the case that schools contemplating such systems are often confused by the array of choices available to them. The claims made by many suppliers both speak to and extend beyond their understanding of their needs, and so how can they know which supplier’s product or service is best? In all this ‘noise’, their real needs, and the real benefits on offer from the suppliers, are lost. They are, to borrow from Barry Schwartz, paralysed by choice.

And yet they *really* need to do more with their data, both to save costs and – more importantly – to improve outcomes.

So I sat there wondering what might be done, fuelled by a frankly awful cup of tea, made all the more so by having to use those little cartons of milk. Milk! Milk? Hang on. Didn’t milk producers once work together to promote the ‘milk’s-gotta-lotta-bottle’ benefits of their product to consumers? Yes, the Milk Marketing Board was a government construct, but I wonder if the principle – of working together to communicate the benefits of what they do – is a useful one for data services providers to consider. In many ways, setting aside their competitive instincts would demonstrate that they really do have children’s and schools’ best interests at heart, but it might also be a commercially rational response to what looks set to be a pretty lean – and therefore more competitive – market.