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Poor IT deals "could cost schools millions"

schools

By Stewart Mitchell

Posted on 9 Jan 2012 at 16:08

British schools are being ripped off to the tune of millions of pounds over mis-sold laptops and other IT equipment.

According to an investigation by the BBC, many schools have been left in hundreds of thousands of pounds' worth of debt after signing leasing agreements for laptops.

Some schools now owe more than their entire budgets to companies that supplied equipment, in a scandal that could have cost UK schools "tens or even hundreds of millions of pounds".

The schools were "mis-sold" equipment as being free, the BBC investigation found, while schools were often paying ten times the going rate for equipment.

The Five Live probe cited one school as having been duped into accepting 100 "free" laptops, which later cost thousands because the company had persuaded the school to sign a long-term lease agreement.

A laptop that has a price of between £350 and £400 is charged at £3,750

"They came to us and said we were going to be a flagship school so we'd get priority on various pieces of kit that came up or any promotions," James Loker-Steele, head of IT at Glemsford Primary in Suffolk, told the BBC.

"The sales person phoned us up and said: 'We've managed to source about 1,000 laptops, would you like any?'"

The school was given the impression the laptops were free, but was later left with a debt of £500,000 when the supplier, Direct Technology Solutions, went into administration and left the school exposed to liabilities.

When we phoned Direct Technology Solutions to ask for details, we were told that the company no longer existed, and the firm had also not responded to the BBC's request for comment.

Overcharged

An accountancy firm looking into the situation on the behalf of one of the banks with debt exposure told the BBC that the school was one of dozens of victims.

As well as facing crippling bills, the accountant also said schools were being overcharged. "For example, a laptop that has a price of between £350 and £400 is charged at £3,750," an accountant told the BBC. "Some schools were having 100-200 laptops delivered at this price."

In a statement, the Department for Education blamed the issue on "very poor decision making from schools and opportunistic/predatory sales tactics from suppliers".

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User comments

Yeah, but PCs are dead cheap...

Really?

I met one of these predatory type salesmen once, they're really only interested in maximising commission and have absolutely no qualms or morals to get in the way. They should have their tongues cut out.

By SwissMac on 9 Jan 2012

£3,750 for a laptop?!?

You sure they weren't just MacBooks? :-)

I work for a local authority, and several years ago I attended a talk by our Corporate Procurement about the pitfalls of going outside the corporate contracts.

Most of the horror stories were about schools. And at the time, about photocopiers.

I sometimes suspect the Conservative government of the time only brought in Local Management of Schools, so their chums could cheerfully fleece the taxpayers pocket.

By Penfolduk01 on 9 Jan 2012

Council procurement policy..

..needs a total overhaul. Our local school insists on every pupil having a laptop and "offers" a monthly purchase option, which over two years, exceeds £800 for a Lenovo laptop, barely worth £300.
I refused and bought my son a far superior netbook for a fraction of the price.
And yes, the netbook had a higher spec. than their laptop!
@Penfolduk01 - The last government continued the same policy, for over a decade, so it's a case of corrupt and lazy politicians rather than party policies.

By cheysuli on 9 Jan 2012

It's easy for crooks to rip off decent people

@cheysuli - I don't particularly want to get into a political bust up. The fact that 'New Labour' continued a Tory policy is hardly a knock-out punch!

Local Management of Schools (LMS) came as part of the 1987 Education Act and was, for the most part, a good thing. The subsequent 'Free Market' reforms, like Acadamies were not.

The current government's allegedly 'de-centralising' Free Schools will be a step too far. If Free Schools take off (they aren't yet) they will be completely outside of any democratic control. Instead Central Government will fund them directly using a National funding formula, in place of the Local ones we have at present.

This sets the scene for incredible amounts of incompetence, sleaze and corruption in the running of our schools.

In one of the commonest scenarios a group of 'local parents' will be allowed to set up a school, then outsource the running to a commercial company. Many are posed to move in.

Said company will enter into contracts with other 3rd parties landing the schools with the liabilities for overprioced assetts, and boosting corporate profits. Greed 101 dera boy.


This whole nonsense will make the venal Private Finance Initiative (PFI), which has already cost both Schools and The NHS (i.e we tax payers) an arm & a leg [sic] look like a kids naughtiness.

You can't contrast Political parties ideologically these days - in the post Thatcher\Blair epoch they are ideology-free concerned only with careerism and management nostrums.

By wittgenfrog on 10 Jan 2012

It seems ironic that the organisations that teach our children reading, writing and arithmetic can’t see through these ‘deals’ for what they are. I suppose the real question is who is accountable for these agreements and the processes in place for the schools to purchase equipment – if the culture is that these deals are the only way to get kit then they will follow that path regardless.

By sipart on 10 Jan 2012

@wittgenfrog

Then we agree on the critical points.
Politicians are crooks.
Schools are forced to overpay for outdated sub-standard technology.
Tax payers are fleeced (again).

By cheysuli on 10 Jan 2012

@sipart

Sadly the people that pull off these scams are good, very good. They fool not only schools, but the NHS, the MOD and of course other Private Companies.

For example.
I worked for Vulture Capital during the height of the boom. They were doing £Billion deals at the time.
In the early oughties a very large IT company managed to con the PR Department into spending nearly £300,000 on a truly crappy proprietary website. This was essentially based on static pages and used a Java engine on the server. If you can fool people who make living by being smart and sneaky, everyone else is easy!

Schools' purchasing is completely fragmented and the responsibility of the Schools. Many LEAs offer a paid-for service and act on behalf of schools for a fee.
Many schools outsource IT provision & services, including purchasing to 3rd parties, big & small.

Mostly these arrangements work, becuase most suppliers are honest and decent.

Where they do go wrong the school is initially responsible for any accrued debt, or costs.

Technically it might be possible to try and sue the Governors (who are ultimately 'responsible').However in reality LEAs and Government can't afford for schools to go broke, and have to bail them out.

Should there be a proliferation of Acadamies and Free Schools, Private companies will increasingly 'Manage' schools instead of the Governors in partnership with LEAs. You can be sure that they won't have any accountability, either moral or financial to the taxpayer....

By wittgenfrog on 10 Jan 2012

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