Best Practice

Why you should renegotiate your school’s contracts now

How will the Covid-19 pandemic affect your purchasing power? Procurement consultant Naomi Clews says it makes sense to revisit your existing contracts now to secure best value for money for your school

Every threat to society creates winners and losers – brands, businesses and individuals who will profit from the pandemic and those who will lose out.

When buyers chose to stockpile toilet rolls at the beginning of the crisis, the unexpected surge in demand increased profits for the manufacturers of toilet rolls. However, these profits are short lived as some households were then sitting on their annual purchase of toilet rolls!

But here is the interesting thing – the time value of money means a pound today is worth more than a pound tomorrow, because inflation increases prices over time.

As the pandemic hit earlier this year, we experienced hyperinflation where the price of goods increased, eroding the real value of the pound. In theory, this means the toilet roll bought in March is better value for money than the same toilet roll bought today.

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