‘Market failure’ in school buying decisions, warns govt

The Department for Education (DfE) is exploring ways of helping to improve school purchasing processes, amid concerns over “inefficiency” and “market failure.”

Details of the project were revealed in a ‘supplier opportunity’ published on the government’s Digital Marketplace last week.

It will look at developing a digital service that ensures better resource management and cost efficiencies in school’s procurement of catalogue goods.

The way schools buy products is “inefficient” in an approach that is “manual and time consuming” according to the DfE.

Other reasons why the work is being done include concerns that schools “lack easily accessible/trustworthy information about value” and “struggle with complex procurement processes.”

In addition “suppliers face high costs and barriers to entry.”

The contract involves a partnership with the DfE to “research, prototype and test potential solutions” for a digital service to help schools procure effectively.

This includes addressing the needs of buyers, such as “getting help, saving time, saving money, understanding what to buy, managing suppliers.”

The new project is due to start by the end of September and will last a maximum of six months, with £400,000 budgeted for the work.  

“This year there has been some further economic analysis done by the DfE Delivery Unit, which showed a large price variance across online goods catalogues. This identified market failure has prompted us to start this piece of work,” the supplier opportunity stated.

It added that the work is part of the DfE’s “Schools Buying Strategy” which aims to help schools “save £1bn of their current £10bn spend on non-staff costs by 2020.”

The notice stated: “Developing a digital service to help schools save money on standard catalogue purchases could be a critical enabler for work under this strategy, and act as a catalyst for behavioural change in schools to encourage better resource management.”

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