The HFL Education Business Services Podcast - Insourcing vs Outsourcing: What Works Best in Education?

To insource or to outsource? That is the question. 

In this episode, Catherine Loake, Director of Business Services at HFL Education, is joined by Jackie Keegan, Head of Financial Services, to unpack the realities behind insourcing and outsourcing in schools and trusts.

Drawing on over 27 years of experience Jackie explores why there is no one-size-fits-all answer, why flexibility is key and how school leaders can rethink traditional service models, shift towards outcome-focused conversations with suppliers, and find the confidence to do things differently.

Practical and thought-provoking, this episode encourages leaders to stay agile and continually review how services are delivered ensuring the best outcomes for pupils while maintaining financial sustainability.

Bite-sized listening for headteachers, CEOs, school business leaders and governors, the series helps leaders step back from day-to-day pressures, reflect on the bigger picture, and explore practical ways to lead their organisations sustainably and strategically.

Host: Catherine Loake (Director of Business Services)

Guest: Jackie Keegan (Head of Financial Services)

Created by: Rachel Lodge, Paul Hayward, Biljana Miljkovic

Questions? Email podcast@hfleducation.org.

HFL Education (formally Herts for Learning)  is a not-for-profit organisation providing all the services, training and resources needed to deliver a great education to every child.  

Transcript

Catherine: Hello and welcome to the HFL Education Business Services podcast. I'm Catherine Loake, the director of business services here at HFL education. We wanted to put this series of mini podcasts together because we recognise that the role of school leadership is growing ever wider and ever deeper, and finding the time and the headspace to get under the bonnet and unpack all elements of school leadership is becoming increasingly challenging. So I'm pleased to be joined today by Jackie Keegan, who's our head of financial services here at HFL education and we're going to be talking about insourcing and outsourcing. Jackie comes with a wealth of experience across financial services: from a business manager in school through to adviser in financial services through to a strategic, resource management advisor for the DfE. 

Jackie: Yeah. Yeah. Over 27 years. 

Catherine: Ok, so there's not an awful lot that Jackie doesn't know about finances. So insourcing and outsourcing is something that has fascinated me for a long time. Shall we just go back to the beginning, what do we mean by insourcing and outsourcing and are they mutually exclusive or is there sort of a hybrid model in the middle? 

Jackie: I think in its simplest form, Catherine, is insourcing is you have to have a service or a project delivered by the staff that you're employing and outsourcing you will have that, service or product, delivered by an external supplier. And they aren't mutually exclusive. You can have hybrid or blended.

Catherine: To be or not to be, that is the to insource or outsource outsource that is the question that's kind of always been, on my mind when I've worked in public services and it's always driven by value for money and value for money being defined as that balance between cost and quality. But I’m aware we're in an era with schools where cost is a really key, key driver. But we mustn't, of course, forget quality. Do you sort of see that one outweighs the other in terms of insourcing and outsourcing, which we believe gives you a bigger bang for your buck?

Jackie: I don't think there's either one or the other route. I think you need to look at actually what model of service or delivery you want at that particular time. Is it long term? Is it short term? Outsourcing isn't always going to be cheaper, and insourcing isn't always going to be better value. So it's looking at each individual school, setting, trust and what it is you want to deliver and whether it's a long term short term and what skills have you got. You couldn't broadly just say outsourcing, that's the way to go. That's the way to save money. That's the way we're going to get better quality or vice versa with insourcing. So it's quite individual as to what it is you want to deliver. 

Catherine: You look at multi-academy trusts and again, it fascinates me that the breadth and depth of central teams, you see some with very small central teams, and a lot of autonomy in schools where, heads are effectively making a lot of the back offices decisions and then other models where you've got, a really significant central team making and driving all of the decisions. And again, are there any kind of rules of thumb around which is right and around scale? I know that we see sometimes that typically a multi-academy trust will buy back HFL services for around 18 months and then looks to move them in-house. So are there kind of any rules of thumb around the length of time before you might consider insourcing or, scale of an organisation? 

Jackie: Again, It depends on the organisation and it depends on the size of the trust. If you've got a trust with 25 schools their requirements are going to be completely different to a trust with just five schools, and it is looking at what skills have you got. So having worked in a trust that was starting to grow, you're looking at the skills not just centrally in where the trust stands, but the schools that are joining you because there's some valuable skills out there. So what have you got already out there and then what do you want to deliver and how do you want to grow? And then at some point you will have your growth. But again, I don't think there's a hard and fast rule where I'm a MAT and therefore the point of me is to deliver everything centrally. The point of a MAT is to deliver that quality education regardless. And how best to do that. And that could be partially blended outsourcing and insourcing, completely outsourcing. You could be looking at something like your IT as an example. You wouldn't necessarily have the skills of a strategic IT manager. But you probably wouldn't need that all the time in a very small trust. So therefore why would you employ you would outsource that. But you may well already have your boots on the ground operational team skilled and ready to go to be managed by the team that you're outsourcing to. So again, there isn't one set rule. There isn't one size fits all. It is looking at what module do I have to deliver now? What do I have to deliver that? Do I need to employ those skills or can I short term outsource them. And sometimes short term outsource them to find out, do I need to employ. So that's also another great option for trusts and larger schools. That brings us back then doesn't it, to that opening statement, to be or not to be, to in or to outsource. 

Catherine: So it's quite fluid.

Jackie: And it should be and it shouldn't be a case of right I’ve got that is in my folder. Close that, put that in the filing cabinet and I'll look at it...never. It’s like your contracts register, you need to be reviewing and looking at all the time to see. Is that still fit for purpose? Is that still where I want to be? Do I need to tweak? Do I need to change my contract? The T’s&C's of an outsourcing? Do I need to actually retrain some of my employed staff because that that worked outsourcing and now I can see how insourcing that with the right skills and the right training, I could deliver that just as well. There isn't one size fits all. 

Catherine: You and I have both seen over the years, a range of roles that are insourced, succeeding and some being a bit trickier. And I think we've both seen sometimes when we're importing concepts from the private sector into the public sector, it can be really challenging. And I think, again, it strikes me as MATs grow and expand. it's usually MATs, but obviously the same can be true of maintained schools. They're looking to insource some key strategic roles like an HR director obviously they've all got to have a CFO. But we're seeing now the advent of COOs. Quite often we get pulled, don't we, into trusts where they've employed somebody from the commercial sector and they haven't been able to make that bridge across. So again, how much of a risk is it to kind of go outside of education because we've got a limited pool of expertise within education. How much of a risk is it to go out for your insourcing and to attract candidates from a broader pool of expertise? 

Jackie: From a CFO point of view, all of those technical skills they will transfer to wherever public, private sector. That's fine. But you and I both know that working in education and actually working out there in schools and trusts, it's a very, very different environment. It can be learned. That's the risk if you're bringing someone from the private sector into your MAT or into your school, it's a very different working environment. And I do try to explain this to lots of people. There's, an understanding of it is not the bottom line. It's not a profit margin. and it is sometimes actually getting your own hands dirty because the headteachers’ out there or, you know, there's something going on in the playground if you're in a secondary school there’s mayhem, and it's being able to flex, but also being able to learn that it can be learned, you're not going to find somebody from the private sector who'll know that. But you can learn it. But it will take time. But it's understanding the person you're going to appoint knows that knows they've got to learn the context of the setting they're about to step into, which is very, very different from anything else on a daily basis. And that they are able to and willing to learn. 

Catherine: And I guess then, as a sort of final question, we’re seeing sort of schools on the precipice financially and I guess one of the things we both see is it can be really challenging because school environments are exactly, as you described, really busy, almost relentlessly so, really unpacking the budget and looking at the value for money you're getting from your structure can be challenging. And actually having the bravery to do things differently can be really challenging as well. you gave the example of it, support there's a, a pretty, staid model, if I'm honest, in the primary sector around that, how that works with the same tech coming in once a week to do your IT. Are we now at the point financially where schools are having to kind of rethink how they do receive services. And I guess what are the factors that come into those decisions? Because we know change can be really difficult. But at the end of the day, you've also got to balance your budget. So again sort of around insourcing and outsourcing, what are the conversations that head should be having with their suppliers to do things differently within the same funding envelope? 

Jackie: What is it you're providing? What is it you want as a headteacher, a CEO? What is it that you can provide and the discussion should be two way. So the suppliers should be saying, what skills have you got that I can work with? In order to understand, do I need to bring some more of my team in and therefore that's going to affect the cost. And how can we work this out together? But I think it is sitting down and having those conversations with people. You're not going to have, as I said earlier on, those strategic skills employed all the time because you won't need them most of the time, but you will need somebody to support you in actually managing, running, setting up projects. There’s so much in the IT world at the moment that you can't possibly have one person who's got it all. But it is, it's sitting and having those conversations and actually, how flexible is that contract? Can we trial it? Can we see it? Can we change it? Can we sit down and renegotiate? That's what you should be doing.

Catherine: It’s about being outcomes driven rather than input driven. And I guess again in busy headship, it's so easy to think about the inputs and to equate value for money with the input. Because if someone's coming in once a week and you're seeing them, tick, I'm getting kind of value for money. But actually trick to some of this isn't it, is thinking about the outcome. So what is it that I want to achieve? And sitting down with your supplier And rather than coming at it from I've got no money, I need to save money, it's about doing things differently isn't it. But that focus on outcomes is really key. What is it you're trying to achieve. 

Jackie: And that that is ultimately what all of us should be looking at. What is the bottom line that you want to achieve? And we all know what that is an education. It's well rounded, well-educated children, pupils, young adults. And how can I do that? Can I do that with my team? What supplier can I outsource that to? I need to have a conversation because this is what I want the end result. How can you help me get there? You can't, ok, well I'll go to another supplier and see how they can help me. And you're absolutely right, It’s thinking differently. Very rarely are we having the IT manager heading off to the server room anymore. I'm using IT as a big example here. But you can have that throughout your catering your cleaning, your building maintenance all of those things. But it's sitting down and having a conversation and having as you said, the bravery to go, we've always done it like this, but actually, should we start doing it a little bit differently because those pupils you're educating, they're going to be doing things a lot differently once they come out the other end. 

Catherine: So I think that brings us to a close of the questions. Is there sort of one piece of advice Jackie would give to a leader when they're thinking about outsourcing or insourcing a product or a service? 

Jackie: Sit down with your senior team, sit down with your governors understand what you've got and always remember that once you've done something, it's not written in stone. You can change it later. And you should be looking and reviewing at all times. So if you're going to go down the outsourcing route, it's not written in stone for the rest of your career at that school. Remember to review, go back and forth, the same as you would be doing all the time in your educational role. 

Catherine: So in summary, it's about partnership working both internally with your governors and your senior team and your staff, but also with your suppliers and those that really can make a difference working with you. And it's about agility and flexibility and actually not falling into the trap of doing things the same way all of the time and just taking that time to routinely review what is it I've got? What am I trying to achieve and what's the best way of doing it?

Jackie: Yeah, precisely. 

Catherine: Fantastic. Well, thank you for your time Jackie. You're welcome. Thank you for listening. We hope you found this podcast interesting and informative. If you did, please do like and subscribe. And if you've got any questions, please do reach out to the HFL Education Team.