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Guidance for Schools on Producing an Alternative Procurement Business Case for ICT
October 2008
Background
In order for ICT to play an effective role in raising education standards, it needs to be consistently and constantly available, highly secure, easy to use and content rich. Delivering and maintaining an ICT solution of this quality requires specialist skills and resources that many schools would find difficult to provide in-house. A managed service enables a school to fully exploit the potential of ICT to transform education and meet the growing expectations of learners and teachers. In general, a managed service gives a school simple and timely access to specialist skills and knowledge; better control of service levels and performance; greater efficiencies through collaborative working; and a robust way of transferring the risk involved in providing high service outputs.
The standard model for ICT in BSF is predicated on the concept of aggregated procurement which provides the network infrastructure, hardware, software and an ongoing area-wide managed service. This approach safeguards value for money, standardisation, scalability and interoperability because ICT is provided on a whole area, rather than a school by school, basis.
Funding for the ICT element of the programme falls into two categories; capital (provided from the BSF funds) and revenue (paid by schools from their budget) and is best understood as:
£225 per pupil place for passive network infrastructure - CAPITAL (PFI credits for new schools; capital grant for others)
£1450 per pupil place for equipment, software and services - CAPITAL (not PFI credits; capital grant)
This is a way of describing the overall ICT funding envelope. It is NOT an allocation formula for schools.
Revenue funding amounts are agreed by the LA and schools:
e.g. £120 per pupil per annum for ongoing support and maintenance + refresh fund - REVENUE
Capital funding is provided to the local authority to support the procurement of an asset based managed service on behalf of its schools. Capital funding does not go directly to individual schools. The managed service should include the provision of infrastructure, equipment, software and services which will deliver the outputs described in the ICT Output Specification that has been developed jointly by the local authority and the schools. The output specification is supported by the availability and performance requirements set out in the ICT payment mechanism, which mean that the managed service must provide and support sufficient equipment of appropriate quality to meet schools' needs. Failure to do this will result in payment deductions.
It is expected that the local authority will gain the agreement of its schools to participate in the ICT Managed Service and make annual per-pupil payments to meet the cost of the service. It is these ongoing revenue payments that are subject to deductions if the service does not meet the availability and performance standards required by the ICT payment mechanism. Local authorities are required to demonstrate schools' commitment in principle to the managed service at the time they submit their Strategy for Change. During the period in which the Outline Business Case is being developed, school governing bodies are asked to sign a declaration formally agreeing to participate in both the aggregated procurement and the Managed Service.
If there are exceptional circumstances in which a governing body feels it is unable to make a commitment to participate in the procurement of an area wide managed service, they will need to make an alternative procurement business case in order to request BSF capital funding outside their authority's BSF procurement. The production of an alternative business case will give the school the opportunity to try to demonstrate that it can achieve better levels of performance, availability and value for money than the BSF managed service by being allowed to procure its ICT equipment and services through the Becta Infrastructure Services and Learning Services frameworks (passive infrastructure will always be installed under contract as part of any refurbishment, remodelling or new build carried out as part of BSF).
This document describes the operation of this process, the timescales involved and the information which a school is required to provide as part of its alternative procurement business case.
Key Principles
Refusal by a school to commit to the ICT managed service provision as set out by the Local Authority for their BSF programme triggers the requirement for an alternative procurement business case.
Schools are solely responsible for the production and ownership of documents required by the process. However, schools may be assisted by utilising the services of an external consultant (for example those available through the Becta Consultancy Framework). Funding will not be made available for this.
Receipts and approvals of the required documentation will be coordinated by PfS who will forward the alternative procurement business case to the Local Authority for comment and to an Independent Panel for adjudication. PfS will, as non-voting member, chair the Adjudication Panel. The composition of the panel will include representatives from Becta, the DCSF and other relevant organisations. The local authority will not be represented on the Adjudication Panel.
Whilst a school is considering its position or producing its alternative procurement business case, the Local Authority should continue to produce its SfC and OBC documents including appropriate cost information However, it is the Local Authority's responsibility to ensure that it is fully aware of the financial and commercial implications to their own business cases and solutions should the school's application to procure its ICT independently be successful.
If, at a later stage, a school which has been successful in its application then wishes to opt back in to the Local Authority's BSF ICT service, this is at the Local Authority's discretion, but is something which we would encourage whenever possible.
The Strategy for Change (SfC2) and Outline Business Case processes should not be delayed as a result of a school exercising its right to produce an alternative procurement business case as this would cause significant harm to the Local Authority's programme (for example delay can have a significant impact on both procurement costs and on the cost and value for money of the overall BSF solution). The Local Authority should progress with their Business Cases in parallel with the School producing its alternative procurement business case. NOTE - PfS must receive the completed APBC by week 36 of the LA's project; that is, after SfC approval, but allowing sufficient time before the OBC is submitted to enable a decision to be reached and communicated to the school and the LA. No APBC can be submitted after this time as this represents a risk to the whole project.
If a school is successful in making its cased for an alternative procurement, it must use the Becta Infrastructure Services and Learning Services Frameworks, or an equivalent `best value' purchase agreement for its ICT procurement.
If more than one school in a Local Authority decides to produce an alternative procurement business case, each school must do so separately. Joint submissions will not be acceptable.
BSF ICT Alternative Procurement Business Case Process
The following sets out the proposed process for BSF ICT Alternative Procurement Business Cases which will help to ensure that there are not different levels or incompatible ICT provision across schools in the authority and that ICT is employed effectively to transform teaching and learning.
Step 1: As part of the Strategy for Change (Part 2) process, each school Governing Body is required to sign a pro forma letter stating that they agree in principle to participate in the aggregated procurement of ICT solutions and to adopt an ICT managed service. The Local Authority programme will not be delayed if a school refuses in principle to adopt a managed service. The school in question would be subject to step 2 in the process.
It is the Local Authority's responsibility to discuss individual school's concerns about the proposed ICT managed service and where possible to arrive at an agreed position.
Step 2: If a school still does not agree in principle to participate in the ICT managed service and wants to opt out, they will have to prove, to the Department's satisfaction, that the school can offer a solution that is as good as, if not better than, the proposed ICT Managed Service. Through the submission of an alternative procurement business case (APBC) they will need to provide evidence their solution will be valued for money, is sustainable in the long-term and that it will interface seamlessly with the Local Authority's proposed ICT solution. The timescale and detail of the APBC process and adjudication are set out in the next section of this guidance.
A pro-forma for the submission of the APBC will be supplied to the school to complete. The school's submission must demonstrate:
That the service it offers provides better VFM than the one provided by the LA Managed service
Evidence of VFM should show acceptable transfer of risk as well as economies in the provision of equipment and services.
That the school has written ICT policies and procedures in place
That the school utilises recognised processes for the delivery of IT technical support (e.g. FITS or ITIL based) and that the proposed ICT provision will meet or exceed the availability and quality standards of the LA Managed Service.
Funding will not be provided to the school to produce any of these documents
Step 3: If the school can demonstrate to the Department's satisfaction that their ICT solution is as good as the proposed BSF ICT managed service, they will receive ICT capital funding in line with other BSF schools, Funding for a successful alternative procurement will take account of the additional incurred by other schools in the Local Authority in establishing the central elements of the area-wide ICT service which means that a school that follow an alternative procurement route will not receive the full £1,450 per pupil BSF capital allocation. Following approval of the BSF Outline Business Case the school will be given an indicative figure of the amount of funding that it is likely to receive. The amount of funding will be calculated with reference to benchmark costs, provided by PfS, based on their assessment of BSF programmes' costs for other projects that have reached financial close. The final capital funding allocation will be calculated and supplied to the school within one week of the final Business case for their Authority's BSF procurement being approved. The funding will be made available to the school at a time which allows ICT to be available in their new buildings that are being provided as part of the BSF programme.
Step 4: If the school cannot demonstrate VFM and at least an equivalent level of ICT provision and service and still refuses to join the managed service, the Department will withhold the entire £1450 capital funding for ICT set-up costs. In this scenario, as the school is unable to demonstrate equivalent value for money as a result of non-participation (e.g. no aggregated procurement savings), the Department has a good case not to invest in a less cost-effective service.
This process does not apply to Academies which have their own established existing APBC arrangements which are covered elsewhere.
Legal advice has been sought from the DCSF/DIUS Legal Adviser's Office which confirms that the proposed process is legal.
Timescales and Adjudication
The school has 42 days (six weeks), from the date on which it receives the APBC documentation, to prepare and submit the business case and appendices.
The deadline for receipt of the APBC by Partnerships for Schools is 12 noon on the due date. Late submissions will delay the adjudication process and may be deemed invalid by the adjudication panel.
The APC and Appendices should be submitted by email in Microsoft Word (.doc) format as attachments sent to
and copied to
Partnerships for Schools will acknowledge receipt of the APBC and Appendices by email to sender's address.
Partnerships for Schools will send an electronic copy of the APBC to the relevant local authority's lead officer for ICT in BSF. The local authority will have 14 days (two weeks) to formulate and submit its comments on the APBC to Partnerships for Schools.
Partnerships for Schools will convene an Adjudication Panel with representatives from DCSF and Becta as well as other relevant organisations. This panel will meet no later than 28 days (four weeks) from the deadline for the school's submission of the APBC.
Partnerships for Schools will ensure that the members of the Adjudication Panel receive full copies of the APBC and Appendices as well as the Local Authority's response to the APBC in sufficient time for them to be given full consideration in advance of the adjudication meeting.
Following the Adjudication Panel meeting, the Chair of the panel will write directly to the Headteacher of the school setting out the judgement and supporting evidence. This letter should be received by the school no later than 7 days (one week) from the date of the adjudication meeting.
The decision of the Adjudication Panel is final and there is no procedure for resubmission of an unsuccessful APBC.
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APBC guidance v 0.3 8th October 2008