A north-east London borough is progressing plans to set up a new education-services company, in a bid to cut costs at the same time as maintaining the quality of its offering to local schools and increasing income.
Redbridge Council’s cabinet last week agreed to work up proposals to create a joint venture (JV) business with borough schools, to capitalise on the in-house expertise it currently has and find new client schools to support.
The authority has been exploring alternative delivery models for the work of its 200 full-time-equivalent education services team for well over a year. In February, the borough’s cabinet committed to a medium-term financial strategy target of saving £735,000 from the service by 2022 through the adoption of a new model.
Redbridge’s preferred option for its future education services offer is to create a joint-venture business between the authority and a separate holding company comprising local schools that want to buy its services.
A report to the cabinet said the measure was a better option than a stand-alone company owned by the council because in addition to creating a new identity for Redbridge’s traded services, it would allow local schools to take advantage of the Teckal exemption, freeing them from procurement constraints.
The report said Redbridge was one of the top 10 education areas in England, with 44.3% of primary and secondary pupils attending a school rated “outstanding” by inspector Ofsted.
“This, combined with strengths in early years and special educational needs and disability services, gives the Redbridge schools system a competitive advantage compared to many others in respect of its ability to provide improvement and development support to schools beyond Redbridge,” it said.
The report cited research from CIPFA’s C.Co consultancy service that suggested more than two-thirds of local authority areas had witnessed a year-on-year drop in income from schools in 2016-17, based on an analysis of 50 councils.
Redbridge said its income from local schools – who can choose which services they buy in – had dropped by 23% between 2016-17 and 2017-18.
The report to cabinet members said the joint-venture model had the “greatest opportunity to protect existing capacity” and “promote the reputation of the council as an ambitious and innovative organisation willing to seek and deliver alternative responses to current local government challenges”.
The report added that the joint-venture model would protect the most jobs under the three options considered, and increase schools’ commitment to buying education services from within the borough, and their engagement in developing the existing offer.
It said 42 FTE jobs in education services were anticipated to be at risk if the council adopted a no-change stance on the service against the backdrop of its mid-term financial strategy savings target. The figure was 13 under the JV model.
Following last week’s decision to progress with the JV, Redbridge’s corporate director of people, Adrian Loades, will work up detailed proposals for the company structure and the functions it will offer – and also invite school governing bodies and academy trusts to take part.
Last year, Essex County Council decided to sell off its EES for Schools consultancy, which delivers education, training and consultancy services to 4,500 school customers in England and has clients in 20 countries overseas.
A county council spokesperson told Room151 last week that consultant PwC had “worked through the various stages of inviting the market and potential investors to express interest in the business” and that the authority was now in “final negotiations” with a bidder.
“While no final decisions have taken place, it is a significant step in the process,” they said.
“As the process continues, residents and employees can be assured that the EES for Schools team remain committed to providing the excellent service and support they are known for.”
When the Conservative-run council made its decision to sell EES for Schools last year, the Liberal Democrats – the authority’s second-largest party – argued that the consultancy generated a surplus of £4m a year that supported the council, money that would be lost after a sale.
