Management information systems

Councils accept ‘referral fees’ for schools’ MIS switch

Conflict of interest concerns as councils reveal fees handed to them amid growing MIS tussle

Conflict of interest concerns as councils reveal fees handed to them amid growing MIS tussle

30 Sep 2024, 9:37

More from this author

Exclusive

Councils have received thousands of pounds in “referral fees” by a tech company in return for their schools switching to its management information system (MIS).

Three councils have received cash from Arbor Education, one of England’s biggest MIS providers.

One has received more than £10,000 since 2022 – while another described the cash as an alternative source of income used to ease “significant financial pressures”. 

Conflict concerns 

Some councils run MIS support units, which can include advising schools on procurement decisions. 

Consultant Duncan Baldwin said: “If the local authorities are organising an event or process [for schools to choose MIS] and may know that a payment may be received for schools choosing a particular system rather than another, the risk remains that there may not be full impartiality. 

“The knowledge of a fee might influence conversations.”

However, the councils have distanced themselves from schools’ MIS decision-making, with many council support teams either disbanded or spun out in recent years.

The level of advice from units still controlled by local authorities also varies. Some act as sounding boards during procurement, others leave decisions to schools. 

‘Alternative income’

Buckinghamshire revealed through Freedom of Information that it had received an “annual recurring referral fee” from Arbor. 

The council would not reveal the amount as it would “affect its ability to generate income to support the provision of public services”.

But “significant financial pressures on local authorities” have prompted “the exploration of alternative sources of income”. 

Anita Cranmer, Buckinghamshire’s cabinet member for education, stressed schools decided which MIS to use, not the council. Referral cash was given to heads. 

The council has also received an “annual entitlement rebate” from one company for the support it provided to schools. This, too, was passed on to leaders. 

Nottingham’s MIS support team helps schools using ESS SIMS, Arbor and ScholarPack, which is part of Arbor, by arranging demonstrations of the tech and promoting it. 

Leaders “are free to choose any solution”, but they must choose from one of these three to get support. 

Some companies “offer a revenue share for products purchased by schools if they are referred by the local authority, but not if they go directly to the supplier”, a spokesperson said.

Nottingham received just over £11,000 over 2022 and 2023. 

A council spokesperson said “the switch in MIS was driven by schools … after seeing demos of a number of systems”. The cash supports delivery of its IT service “for the benefit of all schools”. 

Companies also pay towards council support units

SIMS said it occasionally offered fees to support units for work “over and above” their normal activities. Nottingham received just over £20,000 for what it said was “a rebate on additional products purchased by schools using SIMS”.

But SIMS said the money was given to the council after schools opted to receive support from the authority, rather than the company itself. 

Meanwhile, bursars asked Wokingham council “to organise a marketplace event with online presentations to see what systems were available to them as part of the support we offer to schools”. 

It “arranged for a group of leading providers to take part”, with leaders “able to make their own decisions, based on information from the event and their own research” as the authority did not offer “specific MIS support”. 

It received a payment of about £9,000 from Arbor earlier this year after 23 of its schools signed with the company. The money was reinvested into “supporting local schools and the children that attend them”. 

The Wisdom Partnership, an MIS consultancy, said while such fees were “widely accepted in the commercial world, it doesn’t sit comfortably when advising a school on one system over another”. 

The findings come amid massive change in the MIS sector, worth about £200 million.

Following the emergence of cloud-based providers, the market share for ESS SIMS – which has long dominated the MIS world – fell below 50 per cent

Referral fees ‘inappropriate’ 

Lewis Alcraft, the chief executive of ParentPay Group, an organisation that runs SIMS, said referral fees were “inappropriate”. 

But James Weatherill, the chief executive of Arbor, said his company’s fees were based “off those offered by others in the market to ensure a level playing field”. 

For instance, Bromcom, another provider, does not offer referrals, but does charge schools less if support units – as opposed to the company – provide helpdesk services.

Weatherill said councils could also opt for a discounted rate, adding the companies had always been transparent with how service fees were paid. The fees ranged from £159 to £396.77 for each school.

Latest education roles from

IT Technician

IT Technician

Harris Academy Morden

Teacher of Geography

Teacher of Geography

Harris Academy Orpington

Lecturer/Assessor in Electrical

Lecturer/Assessor in Electrical

South Gloucestershire and Stroud College

Director of Management Information Systems (MIS)

Director of Management Information Systems (MIS)

South Gloucestershire and Stroud College

Exams Assistant

Exams Assistant

Richmond and Hillcroft Adult & Community College

Lecturer Electrical Installation

Lecturer Electrical Installation

Solihull College and University Centre

Sponsored posts

Sponsored post

It’s Education’s Time to Shine: Celebrate your Education Community in 2025!

The deadline is approaching to nominate a colleague, team, whole school or college for the 2025 Pearson National Teaching...

SWAdvertorial
Sponsored post

Navigating NPQ Funding Cuts: An Apprenticeship Success Story

Last year’s NPQ funding cuts meant that half of England’s teachers faced costs of up to £4,000 to complete...

SWAdvertorial
Sponsored post

Embedding Formative Assessment: not just a box-ticking exercise but something long-term and meaningful for all

Our EFA programme has been proven to help schools achieve better GCSE results, as evidenced by the EEF. Find...

SWAdvertorial
Sponsored post

Building capacity in family support to tackle low school attendance 

Persistent and severe school absence impacts children, families, and communities—especially in disadvantaged areas. School-Home Support’s Attendance Support and Development Programme...

SWAdvertorial

More from this theme

Management information systems

Major academy trust settles three-year MIS legal battle

Bromcom filed a High Court claim against Lift Schools after missing out on a £2m deal to supply its...

Jack Dyson
Management information systems

Competition watchdog closes probe into SIMS without taking action

The CMA said continuing to investigate the firm would be 'unlikely to have further positive impact on the sector'

Lucas Cumiskey
Management information systems

Competition watchdog launches another probe into SIMs

CMA probing concerns ESS SIMS could be 'abusing' its 'dominant' market position after Schools Week investigation

Jack Dyson

Your thoughts

Leave a Reply

Your email address will not be published. Required fields are marked *

One comment