Making the grade. The efficacy of procurement in English schools

Abstract

In 2017, the Department for Education issued the Schools’ Buying Strategy to achieve £1.3bn of efficiency savings by promoting demand aggregation through framework deals and local buying networks. This research investigates whether demand aggregation is prevalent within English schools’ procurement of non-staff resources and whether institutional mechanisms have affected their procurement strategies and behaviours. The assumption that aggregating demand inevitably leads to a reduced purchase price is not supported by a literature that suggests pricing outcomes are multi-faceted and can be considered in relation to a broad range of theories, including those covering production cost economies, quantity discounts and buying group behaviour. Public procurement regulations that require the use of OJEU tenders can also act as a countervailing force by reducing supplier competition. The Schools’ Buying Strategy implicitly assumes that buying networks will be more effective and homogeneous entities than those they will supersede, for example local authorities. Several studies into a similar restructure of NHS procurement suggested that it was uncertain whether government policy could affect this level of homogeneity in procurement practice, but an application of DiMaggio & Powell’s (1983) institutional theory suggests that the sources and strength of the isomorphic mechanisms would be key determinants. The research design used a mixed method approach, opening with a quantitative analysis of all schools’ annual financial returns for 2016/17, that addresses the first research question� Is demand aggregation prevalent within schools’ procurement outcomes in England?� A construct was created that correlated average spent per pupil with the number of pupils in a school, investigating if larger schools spend less per pupil on certain purchasing categories, a logical indication of the presence of demand aggregation. Qualitative case studies were then created to understand school level practice and explore the second research question “Have isomorphic institutional mechanisms affected schools’ purchasing strategies and behaviours?� The use of interview and document analysis, focused on key procurement personnel and processes, allowed a contextual account of procurement practice and whether it had changed in line with policy expectations. The research found that a reliance on mimetic isomorphism was unlikely to deliver systemic procurement benefits; the skill level and time allocated to manage procurement were probably insufficient to deliver the efficiency savings. Finally, it found the operating model promulgated by policy had structural inefficiencies that were likely to restrict any potential efficiency savings. The research has three potential contributions to literature and policy development. First, it challenges the core assumption in public procurement policy that demand aggregation is a universal panacea. Second, it provides evidence that the isomorphic mechanisms’ predominant effect can be on structure and process, rather than limited to strategy and culture. Finally, it applies institutional theory to a novel context.

Date of Award	1 Aug 2020
Original language	English
Awarding Institution	The University of Manchester
Supervisor	Julie Froud (Supervisor) & Karel Williams (Supervisor)