What next for councils’ traded services to schools?

Please share your views with us: https://www.surveymonkey.com/s/LA_Sold_Services_to_Schools

Local authority school services represent a microcosm of the multiple challenges facing local government in these times of austerity. With ongoing national policy reforms and funding cuts, it is clear that the services, structures and even the role of councils are changing and will continue to change over the next few years.

The government’s policy drive towards ‘academisation’ has serious and multiple implications for councils. Representative bodies in local government have been highlighting ambiguities in recent legislation regarding the future role of local authorities in education. Despite their democratic accountability and ongoing responsibilities for children’s education (nearly 200 statutory duties at last count ), councils now have far fewer practical powers to directly influence outcomes. It is not yet clear, for example, how local authorities will manage the crisis in demand for school places, nor how far local authorities can act to prevent or redress failing schools…

Councils have for some time been moving away from directly providing services to schools (particularly secondary schools) towards a more strategic role. But the expanding numbers of autonomous academies and free schools has increased in pace over the last couple of years. And it is here to stay, as the new shadow Education Secretary Tristram Hunt (like his predecessor Stephen Twigg) has publicly confirmed that a Labour government would not reverse this trend if elected.

A significant impact of the Coalition’s education policy is, of course, that the ever-increasing ranks of academies, trusts and free schools now have the ability to commission their own school improvement services. The implication being that if your council’s offering is not competitive or attractive enough, purchasing schools will go elsewhere to alternative providers, perhaps beyond their local area. A council must now therefore demonstrate flexibility, value for money and quality outcomes, where it previously had a monopoly.

Similarly, councils are now less able to predict the demand for their support services to schools, as uptake is no longer guaranteed and in future may fall even more as more schools convert. This uncertainty has the potential to seriously impact council resources and threaten the future viability of in-house provision.

All of these issues are forcing councils to consider their discretionary services offering. School improvement teams have been restructured and alternative delivery models put in place. Councils will already have reviewed their non-statutory services such as libraries, arts or leisure, asking themselves whether to provide them at all, and how much to charge for them. For smaller authorities, financial realities may result in a decision to withdraw their provision of discretionary services entirely. But education is not as clear cut, as continued provision may be required to mitigate the risk of poor education outcomes or a weak local market.

Alternatively, councils can go on the offensive, and seek to sell to schools in neighbouring local areas. For example, Surrey and Devon County Councils have both (separately) set up a joint venture with Babcock International Group plc, to provide traded services across county borders. What is clear, is that a council’s relationships with the various forms of schools are now crucial, as a means of indirectly influencing outcomes through support and challenge. A positive example of this is in Liverpool, where the range of traded services has been designed in consultation with head teachers from maintained and non-maintained schools.

This is a still a fluid marketplace, and each place will have different options depending on their market, existing relationships and internal risk assessment. The current ‘mixed economy’ of different schools is also adding complexity to a council’s role. Not only are they supposed to manage the new market and support schools learning how to commission effectively, councils may also wish to compete in this market too.

At BDO, our conversations with local authority officers revolve around these strategic, practical and financial questions that councils are grappling with. “How do we know our services are competitive? Do we fully understand our cost recovery? Do we know our competitors? What are the consequences and implications if we no longer provide these services? Can we provide them in a more effective way?”

These repeated issues have inspired us to dig deeper into how different councils are facing up to the challenges of traded services to schools. We will be publishing a report on this topic later this year, and as part of this we have put together a survey for senior officers in order to find out more about their perspectives – whether this is an area that your authority is struggling with or feeling confident about, we would love to have your input!



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