Schools told to hold off on three-year MIS contract

'Serious concerns' after supplier announces it is scrapping one-year rolling contracts

'Serious concerns' after supplier announces it is scrapping one-year rolling contracts

19 Nov 2021, 9:00

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The government is urging schools to delay signing a three-year contract extension with England’s biggest school information management system supplier.

Schools have raised “serious concerns” after Education Software Solutions (ESS) SIMS announced it was scrapping its normal one-year rolling contracts.

The extended contract means those planning to switch management information service (MIS) providers in the next few years now have just six weeks to arrange an alternative.

SIMS says the terms are “not unusual in our industry” and its previous model “was very much an anomaly”.

But a Department for Education spokesperson said it was looking into the change “and would encourage all schools to pause before agreeing to this new contract whilst we investigate”.

The new contract follows Capita’s £400 million sale of the ESS education platform last year. While still the dominant supplier, SIMS’ market share has slipped from 84 per cent of schools in 2012 to about 70 per cent, according to analysis by the Bring More Data blog.

ParentPay, the new company that owns SIMS, sent an email to schools last week explaining the extension of the annual entitlement plan to three years.

Costs would be fixed for the first year and capped price increases would apply for the next two.

Further emails state schools wishing to leave must inform SIMS by December 31. School contracts are due to end in April next year, so new systems would need to be in place by then.

‘Serious concerns’ over extension

Julie McCulloch, the director of policy at the Association of School and College Leaders (ASCL), said school leaders had “serious concerns” over the extension.

Joshua Perry, an MIS expert who runs the Bring More Data blog, said it typically took a school six to 12 months to move from deciding to run a procurement to completion.

Richard Hastings, IT manager of an all-through independent school, said the contract extension had “forced” his school to move providers “because we don’t want to get locked in for three years”.

He warned of a “rush of schools leaving that don’t make the right decision”.

A survey on Wednesday of 275 schools using SIMS found 91 per cent did not feel they had enough time to look at procuring other systems by April.

The survey, conducted by The Key – a competitor to SIMS – also found 38 per cent were not aware of the contract change.

It could also leave schools needing to re-tender for the contract.

Department for Education guidance sent to schools in 2019 states that if an update within a contract term is “sufficiently material”, a new procurement exercise is required.

Customers urged to get in touch

But Mark Brant, ParentPay chief executive, said the use of three or five-year terms was “not unusual in our industry – until now SIMS was very much the anomaly”.

He expressed “sincere regret” for any concern and urged customers to get in touch so they could “look into their specific circumstances”.

Capita sold ESS last year to Montagu Private Equity for £400 million – about £100 million under initial estimates.

In August, ParentPay completed its acquisition of ESS to become the UK’s biggest edtech business, with Montagu taking a significant minority interest.

The merger was investigated by the Competition and Markets Authority, which found “schools are increasingly willing to switch from SIMS’ MIS to cloud-based alternatives”.

Perry said the rate at which schools were leaving for other providers had increased to about 4 per cent annually.

SIMS was more than seven times larger than its next biggest competitor, when comparing market share.

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