Table of Contents

Executive Summary

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TABLE OF CONTENTS

Executive Summary

Introduction

LEGISLATION

OBLIGATIONS OF THE PUBLIC SECTOR

EDUCATIONAL FUNDING

THE NATIONAL CURRICULUM

CHANGES IN EDUCATIONAL SUPPLY

Table 1.1: Total UK Net Education and Related Expenditure (£m and percent of gross domestic product), 1965/1966-1991/1992

Table 1.2: Total UK Net Education Expenditure by Type of Service (£m), 1990/1991 and 1991/1992

Table 1.3: Proposed Changes in the National Curriculum, May 1994

Table 1.4 GEST Support for The National Curriculum (£m), 1991/1992-1992/1993

Table 1.5: Methods of Placing Orders ( percent of total orders placed), 1993

The Customer

INTRODUCTION

PLAYGROUPS

SCHOOLS

LOCAL AUTHORITY EDUCATIONAL SPENDING

ADDITIONAL FUNDING

GRANT-MAINTAINED SCHOOLS

INDEPENDENT SCHOOLS

FURTHER AND HIGHER EDUCATION

UNIVERSITIES

ADVERTISING

Table 2.1: Number of UK Population Aged 0 to 24 Years-Old, 1971-1993

Table 2.2: Number of UK Schools, Colleges and Universities by Type of Institution, 1970/1971-1991/1992

Table 2.3: Number of UK Schools, 1970/1971-1991/1992

Table 2.4: Number of UK School Pupils (000), 1970/1971-1991/1992

Table 2.5: Average Number of Pupils per School, 1990/1991 and 1991/1992

Table 2.6: Actual Spending by Type of Service in Schools (£000), 1991/92

Table 2.7: Average Spending by Individual Schools on Staff Costs (£), 1991/1992

Table 2.8: LEA Spending on Repair and Maintenance of School Buildings by Individual Schools (£), 1990/1991 and 1991/1992

Table 2.9: Reasons Cited by LEAs for Schools Seeking to Opt Out ( percent of schools), 1988/1989-1991

Table 2.10: Number of Grant-Maintained Schools in Operation, 1989-1994

Table 2.11: Number of Independent Schools in Great Britain, 1985-1993

Table 2.12: Numbers of Pupils at Independent Schools and Proportion of School Age Population in England and Wales, 1985-1994

Table 2.13: Independent Schools Spending on Buildings and Equipment, 1985-1993

Table 2.14: Number of 16 Year-Old Pupils Continuing Their Education (000), 1990/1991 and 1991/1992

Table 2.15: Destination for Full-Time Students Continuing Their Education Aged 16 or Over, 1990/1991 and 1991/1992

Table 2.16: City Technology Colleges, 1993

Table 2.17: Enrolments of Home and Overseas Students in Higher Education Colleges (000 students), 1970/1971-1991/1992

Table 2.18: Enrolments of Home and Overseas Students in UK Universities and Other Higher Education Establishments (000 students), 1970/1971-1991/1992

Table 2.19: Source of University Income, Great Britain (£000), 1990/1991 and 1992/1993

Table 2.20: Total and Average Fees Charged to Students by Type (£m and £), 1989/1990 and 1992/1993

Table 2.21: Total University Recurrent Expenditure (£000), 1990/1991-1992/1993

Table 2.22: Expenditure on Salaries and Wages in Universities, Included in General Expenditure (£000), 1990/1991 and 1992/1993

Table 2.23: Expenditure on Academic Services in Universities (£000), 1991/1992 and 1992/1993

Table 2.24: Expenditure on Maintenance and Running of Premises (£000), 1990/1991 and 1992/1993

Table 2.25: Advertising Spend by the Educational Sector (£000), Year to March 1994

Resources

INTRODUCTION

BOOKS

COMPUTERS

AUDIO-VISUAL EQUIPMENT

STATIONERY AND OFFICE EQUIPMENT

OTHER RESOURCES

Table 3.1: Publication of Book Titles in the UK, 1985-1993

Table 3.2: Retail Value of UK Book Sales (£m), 1985-1993

Table 3.3: Sector Share of the Retail UK Book Market ( percent), 1991-1993

Table 3.4: UK Publishers' Home Sales of School Books by Value (£m), 1988-1993

Table 3.5: UK Publishers' Home Sales of Academic and Professional Books by Value (£m), 1988-1992

Table 3.6: Average Number of Desktop Computers in Schools, 1993

Table 3.7: Number of Companies Supplying Information Technology Hardware to the Education Industry by Sector, 1994

Table 3.8: Number of Companies Supplying Information Technology Software to the Education Industry by Sector, 1994

Table 3.9: The UK PC Market by Value and Volume (£m and 000 units), 1987-1993

Table 3.10: Number of Companies Manufacturing and Supplying Audio-Visual Equipment to the Education Sector, 1994

Table 3.11: Manufacturers' Sales of Audio-Visual Electronic Equipment (£m), 1987-1992

Table 3.12: Leading Suppliers of Sectors of the UK Stationery Market, 1992/1993

Table 3.13: Number of Manufacturers and Suppliers of Stationery and Office Equipment to the Education Sector, 1994

Table 3.14: Apparent UK Market for Paper Stationery and Miscellaneous Stationers' Goods (£m at msp), 1987-1992

Table 3.15: Breakdown of the UK Paper Stationery Market by Sector ( percent by value at msp), 1992

Table 3.16: Apparent UK Market for Paper Stationery by Sector (£m at msp), 1987-1992

Table 3.17: Total UK Sales of Writing Instruments (£m at msp), 1985-1992

Table 3.18: Approximate Breakdown of the UK Writing Instruments Market by Sector ( percent by value at msp), 1992

Clothing and Footwear

INTRODUCTION

SUPPLY

MARKET SIZE

RECENT DEVELOPMENTS

Table 4.1: Average Purchase Price for School Uniform (£), 1993 and 1994

Table 4.2: Sales Through Men's and Boyswear and Women's and Girlswear Retailers (£m), 1989-1993

Table 4.3: Retail Value of Childrenswear Market (£m), 1991-1993

Contract Services

COMPULSORY COMPETITIVE TENDERING

CLEANING

CATERING

SECURITY

OTHER CONTRACT SERVICES

Table 5.1: LEA Expenditure on Agency and Contracted Services (£000), 1991/1992

Table 5.2: Relative Size of Companies in the Contract Cleaning Sector by Turnover (£000), 1993

Table 5.3: Size of the UK Contract Cleaning Industry, 1988-1993

Table 5.4: Take-Up of School Meals (000 pupil meals), 1990/1991-1993/1994

Table 5.5: Cost of School Meals in Primary and Secondary Schools in England (pence), 1990-1992

Table 5.6: Number of UK Education Outlets Supplied by Contract Catering Companies by Sector, 1993

Table 5.7: Growth in Contract Catering Outlets in Independent Schools and State Education (number of outlets), 1989-1993

Table 5.8: Number of UK Education Customers Served by Contract Catering per Day, 1993

Table 5.9: The UK Contract Catering Market (number of businesses), 1988-1993

Table 5.10: UK Contract Catering Market - Trends in Turnover (£m), 1990-1993

Table 5.11: Size of the UK Contract Catering Market (£m), 1990-1993

Table 5.12: The Positive Effect of Intruder Alarms on Crime in Northern England Schools, 1993

Table 5.13: The Total Market for Selected Security Products and Services (£m), 1990-1993

Table 5.14: Estimated Breakdown of the UK Market for Selected Security Products and Services (£m), 1993

Construction

INTRODUCTION

SUPPLY

MARKET SIZE

RECENT DEVELOPMENTS

Table 6.1: LEA Plans for Building Work at Schools (£m), 1990/1991-1993/1994

Table 6.2: Non-Recurrent Exchequer Grants to Universities for Building Works (£000), 1988/1989-1992/1993

Furniture

INTRODUCTION

SUPPLY

MARKET SIZE

RECENT DEVELOPMENTS

Table 7.1: Number of Companies Manufacturing and Supplying Furniture to the Education Industry by Sector, 1994

Table 7.2: Apparent UK Market for Office Furniture (£m at msp), 1987-1992

Table 7.3: Apparent UK Market for Wooden and Upholstered Office Furniture (£m at msp), 1987-1992

Table 7.4: Apparent UK Market for Metal Office Furniture (£m at msp), 1987-1992

Travel

INTRODUCTION

SUPPLY

MARKET SIZE

RECENT DEVELOPMENTS

Training

INTRODUCTION

INDUSTRY SUBSECTORS

SUPPLY

MARKET SIZE

RECENT DEVELOPMENTS

Table 9.1: Number of People Participating in Government Training and Enterprise Programmes (000), 1992-1994

Table 9.2: Value of the UK Training Market (£bn), 1990-1993

Financial Services

INTRODUCTION

SUPPLY

MARKET SIZE

RECENT DEVELOPMENTS

Education Forum

UNIVERSITIES

FURTHER EDUCATION COLLEGES

SCHOOLS

CONCLUSION

Future Prospects

DEMOGRAPHIC CHANGES

GOVERNMENT SPENDING

RESOURCES

CLOTHING AND FOOTWEAR

CONTRACT SERVICES

REPAIR AND MAINTENANCE OF BUILDINGS

FURNITURE

TRAINING

TRAVEL

FINANCIAL SERVICES

GENERAL OUTLOOK

Table 12.1: Projected Numbers of Children and Adults Aged 0 to 25 Years-Old in the UK (000), 1994-1997

Table 12.2: Projected Numbers of Pupils in Maintained Schools (000), 1994/1995-1996/1997

Table 12.3: Department for Education's Planned Spending Programme (£m), 1994/1995-1996/1997

Table 12.4: Department for Education's Planned Spending on Grant Maintained Schools (£m), 1994/1995-1996/1997

Table 12.5: Department for Education's Planned Spending on Further Education (£m at current and constant 1995 prices), 1994/1995-1996/1997

Table 12.6: Department for Education's Planned Recurrent Funding for Higher Education via the Higher Education Funding Council (£m), 1994/1995-1996/1997

Table 12.7: Projected Take-Up of School Meals (000 pupil meals), 1994/1995-1996/1997

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

ICC INFORMATION SOURCES

ICC INFORMATION GROUP LTD

GOVERNMENT PUBLICATIONS

OTHER SOURCES

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EXECUTIVE SUMMARY

This report reviews the UK education system, including schools, colleges and universities, looking at levels of funding, where income is spent and trends in supply resulting from recent legislative, administrative and curricular changes.

Legislative changes since the beginning of the 1980s have dramatically altered the face of the UK education service. Among the most dramatic have been the implementation of the National Curriculum, the introduction of grant-maintained schools, the transference of colleges of further education and sixth-form colleges to an independent sector and the change to university status for polytechnics.

UK net education and related expenditure totalled £29.5bn in 1991/1992, the most recent year for which official figures are available, 10.7 percent higher than the previous year. Education expenditure currently accounts for 5.1 percent of UK gross domestic product. It is estimated that expenditure rose to approximately £32bn in 1992/1993.

THE CUSTOMER

In 1991/1992, there were 37,047 educational establishments in the UK, a fall of 18.7 percent compared to 1970/1971.

The 34,466 schools, which included nursery, primary, secondary, non-maintained, city technology colleges and special institutions, educated nearly 9.2 million students in 1991/1992. Local education authority (LEA) expenditure on schools, youth and community service and education support services totalled £20.8bn in 1991/1992, 13 percent greater than the previous year.

The Education Reform Act of 1988 made provision for schools to opt out of local authority control, provided that parental approval has been obtained via a ballot and that application has been made to the Secretary of State for Education for grant-maintained status. At June 1994, there were 928 grant-maintained schools, of which 594 were secondary. Government predictions of the rate of take-up of grant-maintained status have not been met.

In 1993, there were around 2,430 independent schools educating 578,399 pupils. The pupil role in the independent sector fell for the third year running to 1994, as recessionary pressures and increasing school fees have forced some parents to withdraw their children. The number of children receiving help with school fees rose from 123,346 in 1992/1993 to 126,522 in 1993/1994, nearly 22 percent of all independent school pupils.

In 1991/1992, 67.8 percent of pupils aged 16 continued their education on a full-time basis, 9.5 percent higher than in 1990/1991. Although a high proportion stays on at school, 24 percent go to further education colleges to pursue their studies. There are 418 further education colleges and 115 sixth-form colleges in England and Wales. From April 1993, these were transferred from local authority administration to become independent institutions.

In 1991/1992, there were 733,000 higher education students attending the 48 universities and 83 polytechnics. From autumn 1992, polytechnics acquired university status and both are now funded by the Higher Education Funding Council. University income for 1992/1993 totalled £5.2bn, an increase of 22 percent compared to the previous year. The most significant change in income source has been the gradual switch from exchequer block grant to fees and support grants.

RESOURCES

In 1991/1992, spending on text and library books totalled £95m in LEA-maintained nursery, primary and secondary schools in England, with an additional £3.8m being spent in Wales. A further £593.4m was spent on educational equipment, stationery and materials in schools in England and Wales. Spending on equipment and furniture in universities totalled £186.4m in 1991/1992, up 8 percent compared to the previous year, with an additional £146.2m being spent on 73 libraries (including staffing) and £79.4m on central university computers. Spending on text and library books is expected to rise in 1992/1993 and 1993/1994 to cope with the shortfall in text books. Spending on equipment and furniture in universities is also expected to rise by around 5 percent in 1992/1993.

The academic and professional book sector accounts for 25.6 percent of total book publishers' revenues. Since 1989, cutbacks in educational funding have led to poor sales of academic books, while the introduction of the National Curriculum has both benefited and caused problems for book publishers.

In 1993, an average LEA primary school had 12 computers and an average LEA secondary school had 98 computers, representing 18 computers per pupil and 9 computers per pupil respectively. Surprisingly, independent schools have a lower ratio of computers per pupil than either LEA or grant-maintained. The Government has made considerable investment in IT in education including significant grants to support software development and IT training for teachers, in addition to the funding of research.

The boom in purchase of audio-visual equipment which was seen in the education sector during the 1980s has waned, mainly as a result of lack of funding and many institutions now are forced to make do with the equipment which they already possess.

The education sector is a major stationery user; demanding office stationery, school notebooks, examination paper, writing equipment and a myriad of other items. Prices for educational stationery are very competitive while usage is heavy. The negative effects of the recession are only having a limited influence on demand, while the increasing numbers going on to further and higher education have buoyed sales. Retail sales of educational stationery have one major peak -- the end of summer, beginning of autumn term and a smaller one pre-Christmas.

CLOTHING AND FOOTWEAR

A growing number of schools have instigated a relaxed uniform rule, with flexibility allowing for different styles of dress, providing the colour is correct. To kit a child out in school uniform is costly. The price of a new school uniform may cost upwards of £115, depending on the quantity and quality of items purchased. In addition, several different sizes of clothing will be required over a child's school life from age 11 to 18, and the cumulative cost for uniform may be enormous. In response to this, many schools have introduced a second-hand clothing system, often run by parents, offering uniform items at substantially reduced prices. A major influence of the UK recession, especially for parents with children at fee-paying schools, is for the entire uniform to be purchased from second-hand sources, whereas in the past second-hand shops concentrated on expensive items, such as coats.

CONTRACT SERVICES

The 1988 Local Government Act extended the Government's compulsory competitive tendering (CCT) to include building cleaning, school meals and other catering services, grounds maintenance, street cleaning and refuse collection. Expenditure on tendered services in nursery, primary and secondary schools in 1991/1992 totalled £25.2m. The Universities Statistical Record gives a figure of £94.1m for cleaning and custodial services for 1992/1993, 4.7 percent higher than the previous year. This implies that the average university spends £1.96m on cleaning and security.

CONSTRUCTION

A review commissioned by the Department for Education in 1986 estimated that between 5 percent and 10 percent of authorities' maintenance budgets for schools is used to repair wilful damage. In 1994, losses from schools due to vandalism, theft and arson are estimated to cost LEAs about £70m. LEAs estimate that £439m was required to fund its committed building work in schools in 1993/1994. The annual capital guideline (central government support) for this work totalled £266m. Spending by universities on repairs and maintenance totalled £146.7m in 1992/1993, a considerable increase of 13.4 percent compared to 1990/1991, in addition to long term maintenance provision totalling £77.2m. Grants for building work in universities totalled £24m in 1992/1993, a real growth of 93 percent since 1988/1989.

FURNITURE

Many educational institutions have multipurpose areas used for several activities, such as for dining and for assembly, where the furniture used must be flexible enough to meet the different demands or be easily moved and stored. Systems furniture is becoming increasingly popular.

TRAVEL

Cutbacks in educational budgets have meant that the many schools have very limited resources to pay for trips, even if they are directly curriculum related. This may mean a search for alternative sources of funding, such as a direct approach to parents or using of school funds. In further and higher education, trips are usually funded by the students themselves, although some educational travel grants may be available. When the trip is part of a course, there may be limited departmental funding and travel grants are offered by the Research Councils, although competition for additional funding is great.

TRAINING

There are around 29,500 training providers in the UK employing about 500,000 individuals, with total sales of approximately £21.9bn in 1993. It is estimated that around 480,400 people passed through government-sponsored training programmes in the year to February 1994, with a further 250,000 attending colleges for vocational training programmes and as many as five million other individuals and employees receiving training across a wide range of subjects and levels by various methods.

FINANCIAL SERVICES

The educational sector is a major customer of financial services, both in terms of the educational institutions and the students, or their parents. The financial services which may be demanded by educational institutions include leasing facilities, insurance, account and loan facilities. Financial services are also be required by individual students and their parents, such as saving facilities and financial help with school fees and insurance services,

THE FUTURE

Educational spending by the Department for Education in 1994/1995 is expected to total £10.49bn, 6.8 percent more than 1993/1994 when spending totalled £9.82bn. The Government has restated its priority to boost the number of grant-maintained schools and has announced substantial rises in both recurrent and capital spending for these schools.

Government policy that the education sector must increasingly look to the commercial world for additional funding is likely to continue, necessitating an alteration in outlook to one of selling skills and facilities and becoming economically competitive and commercially aware. Although this means that some sectors of the educational supply industry will need to cut costs in the increasingly competitive environment, it is expected that the changes will also open up markets for innovative suppliers.

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