Competition watchdog ends SIMS probe as break clause confirmed

ESS SIMS will let schools apply to leave three-year contracts a year early, following a CMA investigation

ESS SIMS will let schools apply to leave three-year contracts a year early, following a CMA investigation

10 Jan 2023, 11:41

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The Competition and Markets Authority has closed its investigation into England’s largest school management information system (MIS) provider after it agreed to let eligible schools leave long-term contracts a year early.

But the watchdog will not rule on whether the company breached competition law when it scrapped normal one-year rolling contracts in favour of three-year deals.

Education Software Solutions (ESS) SIMS has given “legally binding” commitments to a break clause for eligible schools as part of the probe launched last April, and the CMA has now accepted these following a consultation with schools.

It means schools that “genuinely considered” switching providers before ESS SIMS scrapped one-year rolling contracts will now be able to apply to an independent adjudicator to exit their current three-year contracts on March 31 2024.

The announcement of the change to contracts in autumn 2021 prompted a backlash from schools that felt they did not have enough time to find new deals.

At the time, the Department for Education said it was looking into the change and encouraged “all schools to pause before agreeing to this new contract whilst we investigate”, as first revealed by Schools Week.

The CMA launched its investigation into whether the move was “anti-competitive”, and whether ESS was “abusing a dominant position” to push the new three-year contracts onto schools.

Break clause will ‘bolster competition’

In November, the watchdog said the firm – which is owned by Parent Pay – had offered to give legally binding assurances allowing some schools to escape contracts early.

At the time, the CMA proposed to accept the offer, believing it would address competition concerns by “giving affected schools the choice to exit their three-year contract and switch to another MIS supplier, facilitating competition”.

Affected schools will be able to apply for a break clause from 12pm today, until February 10.

Applicants will then be notified by Evelyn Partners – which is acting as the independent adjudicator – as to whether they have been successful by March 31.

Ann Pope, senior director of antitrust at the CMA, said: “This break clause will give eligible schools 12 months to decide whether to exit their current contract and, if they do, to switch to a new provider – longer than ESS originally offered.

“The commitments secured from ESS will also bolster competition in the MIS market, giving schools more choice and ESS’s rivals a further chance to compete.” 

Accepting the commitments means the CMA’s investigation has closed. It will not therefore make a decision on whether competition law was breached.

But the watchdog said it would “continue to monitor” ESS’s compliance with the commitments and “intervene” if it suspects a breach.

In a statement, ESS said it “welcomed” the decision. “This is consistent with the position ESS has maintained throughout the investigation, namely that it has acted properly at all times,” it added.

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