Schools will be “expected” to use a new government framework for supply teacher agency spending, which will include new caps on the rates companies can charge, ministers have announced.
The Department for Education has today launched a “maximising value for pupils” (MVP) programme – a wide-ranging scheme aiming to “maximise value from the investment in the school system, so every pound delivers for children”.
The scheme aims to tackle spending and improve value for money across four areas: commercial, assets, workforce deployment, and developing capabilities including digital and technology.
The DfE has urged “every school, trust and local authority” to use the support to “implement proactive steps”.
Reducing agency staff spend
As part of the programme, the DfE said the Crown Commercial Service (CCS) will launch a new framework in June 2026, which will include “negotiated rate caps” on teacher supply agency fees and “provide significant value for money”.
The DfE has said this will cap rates paid to suppliers, and is not meant to reduce or cap the rates paid directly to supply teachers. The government will be able to see how much goes to the teachers under the terms of the deal.
Suppliers are being invited to apply to be part of the new framework. Once it launches in June, schools will be expected to source agency staff through the framework, unless they are achieving better value for money through another route.
Government said the plan would “crack down on unacceptable practices and excessive supplier margins within the teacher supply market, to help reduce school spend on agency supply teachers”.
Schools and trusts spend an estimated 80 per cent of their budgets on staff. Spend on agency supply teachers alone reached £1.4 billion in 2023-24, according to the DfE.
The DfE also urged school and trust leaders to “look deeply at their data” on workforce costs, gather feedback from staff, and use its financial benchmarking and insights tool (FBIT) to compare with similar schools.
Trusts urged to rethink CEO pay
The DfE said looking for savings on staff spend “includes looking at the very top”.
It said trusts should “ensur[e] that pay and rewards for multi-academy trust executives are proportionate and justified”.
“It also means looking at the long term, including ways to address long-term vacancies, reduce high turnover rate and support overall retention.”
The department said it would be publishing a toolkit in 2026 with further research and resources and case studies sharing best practice.
Energy savings
The government said it is also “harnessing the collective buying power of around 22,000 state-funded schools, taking on key areas of spending and helping secure better deals and maximise value from budgets”.
In a recent pilot of the government’s “energy for schools” scheme – which gives schools access to special energy rates – participating schools saved an average of 36 per cent on bills, the DfE said.
One trust also saved more than £500,000 through “smarter contract management”, using the government’s “get help buying for schools” service.
The DfE said it planned to develop new services, including for the procurement of agency supply teachers, tech and learning resources.
As revealed by Schools Week, the DfE will also seek to shield schools from the £200 million management information system (MIS) turf war by drawing up a new framework through which leaders can purchase the edtech.
The government added that “with departmental support, we know we can support schools to make significant savings and reduce risks”.
Optimising assets
The DfE also plans to support schools and trusts to “mak[e] the mot of financial and physical assets” and manage reserves.
A new banking comparison tool will allow schools to compare interest rates, and find out if they can get better return on their cash holdings.
In one case study shared by government today, Bishop Hogarth Catholic Education Trust said it was previously generating £16,000 in annual bank interest, but this has risen to more than £1.1mil after “optimising” its approach to banking.
Nationally, reserves in the school system totalled more than £6 billion in 2023-24 – nearly 10 per cent of the value of the core schools budget.
The DfE said there is “significant potential in under-utilised assets”, and will engage with schools and trusts to help “maximise use” of these.
It highlighted that many schools and trusts are “using their assets for community benefit”, adding: “We want to ensure this social value is maintained while supporting opportunities to maximise value and reinvest savings where they matter most”.
The DfE will also launch updated guidance for academy trusts in 2026, aimed at helping them manage reserves “effectively”.
‘Lifting pressures off schools’
Schools minister Georgia Gould said the MVP programme “will lift some of the pressures that have built up on schools in recent years and builds on major steps we have taken outside the classroom, like scrapping the two-child benefit cap.
“I know just how hard schools and trusts are already working to seize opportunities to maximise value from their budgets,” she added.
“We want to share that best practice and support them to go even further – with government action to tackle the national drivers of costs, alongside local action from schools and trusts, so every penny is invested in children to achieve and thrive.”
Your thoughts