REPORT ON THE VALUE FOR MONEY OF THE LONDON GRID FOR LEARNING. London Councils save 392m in three years
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1 REPORT ON THE VALUE FOR MONEY OF THE LONDON GRID FOR LEARNING London Councils save 392m in three years Chris Buss Director of Finance Wandsworth Council March 2010
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3 REPORT ON THE VALUE FOR MONEY OF THE LONDON GRID FOR LEARNING. Introduction The purpose of this document is to report on a value for money exercise undertaken in early 2010 around the services provided by the London Grid for Learning Trust to Wandsworth Council and the education services enjoyed by its stakeholders. The background to this exercise is a belief by Wandsworth that although it can produce savings through aggregation in itself, there are far more significant savings which can be accrued through joining with other London local authorities in using a regional procurement vehicle such as the Trust. Background In April 2001, the Consortium incorporated a Special Purpose Vehicle, the London Grid for Learning Trust to enable the authorities to act jointly in undertaking procurements and letting of contracts. Wandsworth played an important part of creating the London Grid for Learning as a Consortium of the 33 London Local Authorities formed in 2001 with the initial purpose of leveraging combined purchasing power in the procurement of broadband connectivity and associated services for London maintained schools. The Trust is a company limited by guarantee, owned jointly by all London Councils, and is a registered charity. The Executive Board of Trustees/Directors is made up of representative Directors of Children s Services and LA officers with responsibility for strategic leadership of ICT in schools. The Wandsworth Director of Children s Services is the Chairman of the LGfL Executive Board. As such and with other officer involvement, the Council engages closely in the work of the Trust through regular meetings of representatives from all member LAs, and the activities and decisions of the Trust are guided and informed by local authority representatives. Every London LA is represented within a range of geographic and business related groups and are fully involved in the governance of LGfL. The LGfL Trust itself is also a founder member of the National Education Network, the UK collaborative network for education, providing schools with a safe, secure and reliable learning environment and direct access to a growing range of online services and content. This brings with it further opportunity for Wandsworth to benefit from the buying power of a national organisation dedicated to education. Through the aggregated procurement of infrastructure, security systems, digital learning content, learning platforms and other managed services, London Local Authorities have generated substantial savings compared to the cost of securing the same services for schools without aggregation. As stated, this report quantifies achieved and achievable savings in the light of the following assumptions.
4 Assumptions The LGfL Trust offers an extensive range of services and resources which are fully described in a publicly available Services Guide ( This service guide includes pricing and these have been used in the analysis. However, an important caveat to state here is that in general the equivalent price used in the calculations is for a PRODUCT whilst the LGfL Trust price is for a WRAPAROUND SERVICE e.g. full helpdesk, fault determination / rectification and upgrades are included. Therefore, any direct saving figures show a lower amount than that actually achieved by a school. The following rationale has been applied to the calculations: Head Figures London Staff = London Learners = 1,100,000 London LAs = 33 Primary/special schools = 2100 Primary workstation ratio = 6 Secondary schools = 420 Secondary workstation ratio = 5 Curriculum Consultants = 12 Academies = 20 2nd Auth Factor tags = Podcast bandwidth per mb = 90 Video streaming per mb = 800 Using the above, the assumption is made that all LAs and /or schools buy a service in order to maximise the aggregation. In some cases, an equivalent product / service could not be found on the market and therefore these have not been factored into the analysis, again contributing to a possible understatement of the savings achieved. One area mentioned in the Services Guide which does not have a stated price is that of Premium Content. The value of the Premium Content Value has been calculated on the following assumptions: LGfL has expended from LA pooled grant on premium content 1,856,658 Following an extensive evaluation and selection process by an expert panel of pedagogists drawn from across the region, and a vigorous negotiation process, premium on-line teaching and learning content purchases have typically achieved discounts (compared to the cost of London schools purchasing the same resources without aggregation) of 90% to 95%against list prices but for the purposes of this report a more modest discount of 85% is assumed. Hence the value of the Premium Content acquired if purchased at school level would be 12,377,720. On the assumption that premium content has a useful 5 year life (although in practice this could be considerably longer) then the value to London schools per annum is 2,475,544. On the basis of the above assumptions the following analysis has been undertaken.
5 Analysis The attached spreadsheet shows various inputs / outputs and sources of information. Extracted from the sheet is the high level list of savings against list prices: Service Paid to LGfL by LAs from DCSF grant to provide for services shown below as 0, inc LGfL net mgmt & operating costs Total net savings for London schools over THREE years 392,013,538 6,800,000 Core network - paid by LAs from DCSF grant 5,100,000 School broadband connections 51,591,540 Web Hosting 906,293 Domain Name Hosting 67,964 Secure Remote Access 1,896,180 URL Filtering (LA) 571,779 Content Control ( scanning) 17,004,150 Anti-Virus Protection - school computers 38,362,500 Anti virus teacher laptops live update at home 8,397,900 Unified Sign On for Pupils & Staff 25,200,000 USO Second factor authentication one time password 143,000 Teaching and Learning Digital Content 7,426,632 Video Upload Service 28,800 Video Conferencing 18,000 StaffMail 15,094,800 LondonMail (Secondary pupils) 118,602,000 Saf (Primary pupils) 118,602,000 The analysis for the coming 3-year period based current costs and comparative list prices is an estimated net saving for London LAs and schools of 392,013,538.
6 Using a weighting of 4 to 1 for Secondary to Primary schools (to reflect average relative size and spend) results in direct net savings to Wandsworth schools, of 34,569 per annum per Primary (x67) / Special school and 138,276 per annum per Secondary school (x11), total 3,837,169 per annum. Interestingly, the London saving per annum equals 131,000,000, is significantly greater than previous estimates, which were based largely on savings through aggregated broadband procurement. In addition to these direct savings through aggregated procurement, LA collaboration also provides significant benefits to Wandsworth itself and its schools through shared expertise, experience and resources, and the avoidance of waste created by duplication of effort. As examples, over the last year we have seen activities which are of indirect benefit to my Council that include a major internal audit of the information security arrangements across the LGfL and its principal suppliers organisation in line with the HMG Security Policy Framework. The recommendations from this audit are reflected in a new information security policy which is currently being implemented across LGfL and its suppliers and we anticipate that Wandsworth will benefit from any improved rigour and procedures helping it also meet the HMG requirements. The services and products in the extensive Services Guide will enable Wandsworth and other London LAs along with their schools to meet the challenges of the Becta information handling guidelines and Ofsted s new evaluation schedule of judgments for schools in meeting safeguarding regulations. The existence of the pan-london Admissions system delivered through LGfL and managed by my Council is also driving down cost through detecting and eradicating fraud. We anticipate working with the LGfL to develop further shared systems such as on-line free school meals applications in a drive for more economy and improved service to our client base. Conclusion The above figures are of keen interest to my Council as one of the leading proponents of value for money and efficiency. The saving of 3,837,169 per annum for Wandsworth has to be judged as precisely in line with this tenet. Equally importantly, this scale of saving is achieved through the London Grid for Learning acting as the Consortium of London s 33 Local Authorities working together to achieve outcomes which exceed (in quality, scope and value for money) what can be achieved by working individually. The estimated annual saving across London local authorities from the activities of the Trust equals 131,000,000 against list prices. Chris Buss Director of Finance Wandsworth Council Town Hall Wandsworth High Street London SW18 2PU
7 Savings for schools achieved through aggregated procurement of services by London LAs acting together through the LGfL Trust LGfL Pricing Alternative source pricing Service Qualifier Unit set-up Unit Annual 3 year total 3 year total Paid to LGfL by LAs from DCSF grant to provide for services shown below as 0, inc LGfL net mgmt & operating costs Core network - paid by LAs from DCSF grant School broadband connections Web Hosting Domain Name Hosting Secure Remote Access Secondary 10mb service Primary 5Mb service 55Mb / 1GB Inclusive in broadband charge Annual user licence Total net savings for London schools over three years Secondary Schools - Average Savings per annum 138,276 Primary Schools - Average Savings per annum 34,569 Source of comparison pricing 392,013,538 Secondary / Primary weighted 4 to 1 2,270,000-6,800,000 The services listed below are predicated on the existence of the LGfL Core Network, the LGfL Trust and LA funding for the services which the Trust puts in place - hence the cost of these is deducted from the savings achieved. 0 1,700,000 5,100,000-5,100,000 9,851 9,144 47,255,460 98,847,000 51,591,540 Competitive procurement activity in 2008/9 ( 39,225 3yr total) 3,199 3,949 5Mb primary svc is delivered over 10Mb bearer - only pays for 5Mb 0 906, , ,964 67, AE0FDFA6860E80.TCpfix152a? frame=_top& lf=static 59 2,315,430 4,211,610 1,896,180 URL Filtering (LA) LA price 0 5, ,221 1,134, ,779 Netsweeper Content Control ( scanning) Anti-Virus Protection - school computers Anti virus teacher laptops live update at home Unified Sign On for Pupils & Staff USO - OTP Teaching and Learning Digital Content LA price 0 16,000 1,584,000 18,588,150 17,004,150 Sophos and within ECC Staff home environments papt or 8 + 5papt ,362,500 38,362, ,397,900 8,397, ,200,000 25,200,000 Webroot for 500 users (= 1 seco or.25 for 3 yrs ( pa x 75% discount for education per 5 users) 007&CID=0&PID=&PN=0 Authentication service for all staff and pupils - for single school estimated at 10,000 for 3 year service , , , ,426,632 7,426,632 See Assumptions Video Upload Service 0 28,800 28,800 Video Conferencing 0 18,000 18,000 StaffMail 0 15,094,800 15,094,800 B232CC3C92AE0FDFA6860E80.TCpfix152a? frame=_top& lf=static LondonMail ,602, ,602,000 (Secondary pupils) B232CC3C92AE0FDFA6860E80.TCpfix152a? frame=_top& lf=static Saf (Primary ,602, ,602,000 pupils) B232CC3C92AE0FDFA6860E80.TCpfix152a? frame=_top& lf=static
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