Memorandum submitted by Intellect
1.1 This submission has been prepared by
Intellect in response to the press notice issued by the Children,
Schools and Families Select Committee on 22 May 2008.
1.2 Intellect is the UK trade association
for the IT, telecoms and electronics industries. Its members account
for over 80% of these markets and include blue-chip multinationals
as well as early stage technology companies. These industries
together generate around 10% of UK GDP and 15% of UK trade.
1.3 This memorandum focuses on the development
in the procurement and design of the Information and Communications
Technology (ICT) element of the Building Schools for the Future
(BSF) programme. It follows the evidence that Intellect submitted
to the Education and Skills Committee's inquiry into Sustainable
Schools for the Future in June 2006. Nick Kalisperas of Intellect
presented oral evidence to the committee on 5 July 2006, which
was referenced in the final report.
2.1 Intellect supports the BSF Educational
Vision, which was published by Partnerships for Schools in November
2004. This vision states that the mission for ICT in schools is:
"To help all children achieve their full potential by supporting
every school in England to become a centre of excellence in the
use of ICT for teaching and learning and for whole-school development."
2.2 Intellect and its members wholeheartedly
believe that 21st century schools need 21st century technology.
However, we have a number of concerns about BSF and ultimately
about the programme's ability to deliver its vision of education.
2.3 Our main areas of concern, which are
detailed in the next section of this document, are that the BSF
has limited ICT choice;
has yet to create a vibrant market;
does not always support the transformational
aims and objectives of the programme.
3. BSF PROCUREMENT
3.1 The consortium procurement approach,
which brings together construction, facilities management and
ICT into a single contract and which is favoured by Partnerships
for Schools, places a greater emphasis on the construction element
of each programme than on the ICT element. This is because the
consortium scoring criteria give relatively little weight (c.15%)
to ICT in the decision making process. As a result, BSF programmes
may get the ICT service that happens to be linked to a particular
constructor, rather than the one they would choose and regardless
of whether it meets their needs.
3.2 In order for suppliers to offer genuinely
innovative ICT products and services, the choice of the ICT supplier
should be based on their educational vision, rather than the consortium
that they happen to be part of. While raising the threshold level
for ICT suppliers and giving more weighting to ICT in the decision
making process would help to achieve this, the most effective
means of encouraging suppliers to offer innovative solutions would
be to separate procurement as part of a multi-stage process.
3.3 The consortium approach does concentrate
accountability for delivering a BSF programme at a single point.
However, Intellect members believe that, with the adoption of
appropriate interface agreements between constructors and ICT
suppliers, the value of free choice of ICT supplier outweighs
4. BSF PROCUREMENT
4.1 Whilst many of Intellect's members (large
and small) have expressed interest in BSF, only a limited number
of ICT suppliers are actually participating in the BSF programme.
Some membersparticularly the larger generalist ICT suppliersreport
that they are not participating because of the procurement model,
and in particular the consortium nature of it.
4.2 Bidding for the ICT element of a BSF
contract has considerable resource and cost implications for suppliers
the complexity of the procurement
an inability to leverage economies
of scale (since individual bids are for relatively small groups
of schools); and
the frequent lack of adequate due
diligence and preparation by local authorities (which ultimately
means the supplier takes on additional risk).
4.3 The high level of investment required
to participate in this process is difficult for suppliers to justify,
particularly when they have little control over the factors that
determine a bid's success or otherwise, and when the end result
is determined by their choice of consortium partner rather than
by their bid's merits.
4.4 This is compounded by the terms and
conditions (Ts & Cs) imposed by the BSF procurement process.
We believe that the contractual terms and conditionswhich
in some situations result in an ICT supplier having potential
liabilities that exceed the value of the contractprove
a significant disincentive. Liabilities of such a scale have not
been reported in contracts for projects of a similar size and
nature and for similar customers.
4.5 Moreover, Intellect and its members
share a concern that small companies frequently have little choice
but to accept unquantified risks, which may pose considerable
problems in the future (for those companies, the schools and the
4.6 Without changes to the procurement model,
it is unlikely that the programme will attract more suppliers:
particularly when the potential return on investment is considerably
higher for other work. There is a significant risk that some tenders
will attract bids from two or fewer suppliers. This will lead
to capacity issues for those suppliers who remain in the market,
but will ultimately mean that schools will receive lowest common
denominator ICT and will be unable to deliver the intended educational
5. BSF PROCUREMENT
5.1 Intellect members have broad experience
of delivering transformational change enabled by technology. Transformation
requires more than simply ICT; it also requires well-executed
change management that takes a holistic view of the people and
5.2 To be able to select truly transformational
solutions for their schools, local authorities must understand
the full range of options available to them at the visioning stage
and be capable of communicating a clear and coherent vision to
all stakeholders. This will often include a requirement for a
significant change management programme.
5.3 The supplier community has considerable
experience in this type of change management, which could be utilised
to support the delivery of BSF's educational vision. An adequate
revenue stream should be made available for change management,
as it is undoubtedly a major success factor for the programme.
5.4 Additional clarity is needed on the
sustainability of the programme given that it is based on a capital
funding model. Intellect recommends that careful consideration
be given to the longer-term operational funding requirements:
failure to secure the future of BSF schools risks undermining
the credibility of this transformation programme.
6.1 Intellect and its members strongly support
BSF's educational vision and the role set out for ICT within it.
However, we are concerned that the procurement approach adopted
will not get the best out of the market for BSF schools. Crucially,
we believe that the procurement approach limits ICT choice and
has failed to encourage new suppliers to create a vibrant and
competitive marketplace. As a result, it is not making the most
of the skills and experience available in the supplier community
to support the real transformation of education and learning.
7. NEXT STEPS
7.1 Intellect is happy to provide additional
evidence to the Children, Schools and Families Select Committee
and to explore the issues discussed in this submission in greater