04
Dec

 

Further Education & the 2017 Budget

 

How good procurement can bridge the gap

 

Piggy bank with money

On November 22nd, Chancellor Philip Hammond released details of the UK’s 2017 Autumn Budget. The results for education? Despite an additional £600 being offered for each student taking maths at level three, and a £20m injection to help colleges prepare for the new T-Levels, funding for the sector remains a point of real concern.

The Impact of Funding Cuts

 

The shockwaves from continued spending cutbacks can be felt across the education sector. A recent report by TES suggests that up to half of sixth-form colleges and schools have been forced to drop certain subjects, the most common casualties being modern foreign languages, music, and crucial STEM areas. In addition, 67% of institutions have had to reduce vital support services, such as mental health, careers advice, and extracurricular programmes.

Most worryingly of all, as the Sixth Form Colleges Association identified, there is a clear link between budget cuts and a reduction in overall OFSTED performance.

With fewer resources available, and continued pressure to do more with less, how can education institutions rise to the financial challenges in 2018 and beyond?

 

Procuring for the Future

 

In the age of continued austerity, it is more important than ever that procurement professionals take the wheel in steering organisations to improved savings, cost efficiencies, and value for money.

Ultimately, getting a better deal on your goods and services means getting a better deal for your students!

Here are just some of the ways that good procurement can bring real value to your organisation, and help bridge the gap in your ever-reducing budgets.

 

1. Comprehensive Spending Reviews

 

What are you spending money on? Are you getting best value? How does your pricing compare with the rest of the market?

Procurement professionals are specialists at analysing non-pay spend data. Not only can the team identify areas of unregulated spend, they can spot patterns and trends across different vendors and categories, cultivating opportunities to consolidate and reduce your costs.

What’s more, procurement have the expertise and experience to compare contracts against best practice within the sector and market place. It is their job to know if you are getting a good deal and, if not, to take steps to make sure that you do.

In short, procurement is there to spot new opportunities and maximise cost savings by comprehensively reviewing your non-pay spend.

 

2. Service Redesign

 

“If you always do what you’ve always done, you’ll always get what you’ve always got.” – Henry Ford

Procurement professionals have a wealth of experience across a range of categories, from facilities to professional services, and stationery to cleaning. They know what makes a good service, and what makes a good contract. This expertise is invaluable for ensuring that you continuously improve the services you procure, rather than doing things the same way.

Are your service levels too onerous? Are you paying for things you might not be using? Could you consolidate products to cut costs?

As well as looking at what you are spending, a good procurement professional will use their market knowledge (and that of your suppliers) to review the goods and services you procure, and suggest innovative ways that you could reduce expenditure.

 

3. Supplier Negotiations

 

Just as important as the new contracts you put in place, are the contracts you already have. Substantial savings can be made by working together with your suppliers to reengineer services, or by negotiating cost reductions.

Identifying areas of leverage – such as a contract extension, or simply the opportunity to keep your business in a time where services are being reduced – can provide the incentive that suppliers need to offer you a better deal mid-contract.

Procurement professionals know which buttons to press, how hard to press them, and at what time. Using procurement expertise can drive considerable savings from your existing contracts.

 

4. Investing in Improvements

 

We’re all familiar with that famous phrase, “you have to speculate to accumulate”. This is particularly true when making long-term cost savings for your organisation.

For example, introducing new technologies may mean a small capital investment, but this could deliver double its value in savings over the contract lifetime (such as the replacement of an old and expensive piece of software, or the purchase of energy-saving equipment).

Equally, investing in the right procurement staff with appropriate skills and experience is essential. For example, Tenet’s procurement services offer a guaranteed savings model that promises to deliver you a minimum level of savings (which will at least cover your costs).

You can maximise the cost savings you make, by investing in the resources you use.

 

5. Facilitating Collaboration

 

Several piggy banks in a row

“Alone we can do so little; together we can do so much.” – Helen Keller

Did you know that by partnering with other schools, colleges, or public-sector organisations, you could save additional money on the goods and services you procure?

This is because you are offering a larger and more attractive pot of business to potential suppliers which, coupled with the reduced administration of a single procurement process, is proven to drive out more savings than when you purchase alone.

 

How Can Procurement Help You?

 

Procurement is undoubtedly a critical resource in fighting the battle against funding reductions, and can add real value to your business.

Tenet Services have spent over 20 years identifying innovative cost savings for our customers, and pride ourselves of delivering improved value for money across the education sector.

To find out how a small investment in our services could deliver huge gains for your organisation, call us today for a free, no-obligation chat: 01376 511 411.

Comments are closed.