Interview with Philip White, CEO, BESA member Syscap, by Caroline Wright of BESA

Introduction

pw_picture_syscao.jpgMany of you will be aware of the existing Government policy on leasing, which is currently putting unnecessary financial demands on schools; it insists that schools use operating leases rather than the more cost-effective finance leases. BESA has been working with the support of the National Association of School Business Management (NASBM), the Finance and Leasing Association (FLA) and BESA members RM and Syscap, to lobby the Government to change its policy on leasing in schools. In this month’s Insight, we interview Philip White, CEO of Syscap, to understand his passion for change.

Q: For our members’ benefit, can you briefly explain the problem with the Government’ policy on leasing?

Schools are currently not allowed to take out a finance lease which from an accounting perspective would be treated as a loan or borrowing. The products are still not owned by the school but there should be no unexpected payments at the end of the term of the lease, providing far greater certainty and predictability and more often cheaper whole of life costs. If we look at how this pales into insignificance against the country’s debt, many would question why we are bothering to invest our time in this campaign? It is about the principle. Why should schools spend additional amounts of their precious budgets when it is completely unnecessary?

Schools are currently limited to using operating leases which involve the school paying a rental fee for the hire of an asset for a period of time, similar to a rental agreement. At the end of the term of the agreement, for example three years, the products must be returned to the leasing company. The challenge lies in the fact that the leasing company is required to invest in a residual value into the agreement to ensure it is compliant based on accounting rules and government policy on borrowing. At the end of the period, more often than not the leasing company will dispose of the asset in an attempt to recover their residual value investment.

In the event that any asset is not returned in good working order, save for fair wear and tear the school will potentially be liable for costs. It is because of the nature of usage within schools and the lack of proper asset management that they may be open to onerous restitution charges by some leasing companies. The wear and tear costs could be priced extortionately high and schools should seek guidance or a “tariff” in advance of entering an agreement. For example, a tiny scratch on the display may be as much as £50, a damaged key on the keyboard – £75, a disc drive not working – £100. It is very easy for schools to be left with an un-budgeted remaining payment of several hundred pounds for computers that they have already returned thus proving uneconomical and greater than anticipated whole of life costs.

Q: What drove you to get involved with our campaign to change Government policy?

A: It has been through my role as CEO at specialist ICT funding solutions provider Syscap, that I have become aware of, what in my view, the adoption of inappropriate legislation driving inappropriate behaviour directed by outdated Government policy. However, it is not just commercial interest that motivates me to want to make this change because as a leasing company, we exist through arranging leases, whether they are operating or financial leases.

My passion is to change the policy which only allows schools to use operating leases. The reasons for this are three fold. Firstly, it is my position as a UK citizen to ensure our Government is working effectively; secondly, it is my status as a parent of four school aged children and finally, as a BESA member I feel we have an obligation to campaign for the best for the schools.

Q: Why wait until you joined BESA to start your mission?

A: We had actually been busy fighting the same battle for several years before we became a BESA member. We were already very aware of the potential dangers for schools in taking out operating leases. We had worked with the Department for Education to produce a short guide entitled ‘Tips for successful leasing in schools’. The advice was written in association with the FLA, of which I am Vice-Chair of their Technology Group, and NASBAM. On joining BESA, we soon realised that we were duplicating effort where our desired outcomes were virtually the same. We decided therefore that we should be working together to create a larger lobbying power.

Q: What have you been doing since joining BESA to support our campaign?

A: We have recently commissioned a White Paper from the e-learning Foundation pulling together their own information and of course information collated through BESA. This has helped us not only fully understand the size of the problem, but also to have the data to back our argument with the Government, who has noted our point of view but hasn’t yet made any changes. The knock on effect of this ‘non-action’ is highlighted by the findings of our research.

Currently, 436,000 computers in schools are classified as “ineffective” and 624,000 are more than five years old; the age of hardware in schools is being pushed out way beyond what sources would suggest is the economic life of a device. So while this month’s BESA ‘ICT in schools’ research reveals that for the first time spending on ICT has started to increase, this is not going to repair the damage caused by a lack of ICT hardware ‘replacement’ over the past few years. Without wanting to be an alarmist, we are now putting the good investment in technology over the years, at risk.

Working with BESA, we have been able to lobby at a ministerial level on both sides of the house. Combined with other activities, this has resulted in a Government policy meeting on the 8th October.

We want to want to encourage a substantial but sustainable investment strategy by the Government to revive the fleet of technology in schools to augment not hinder the learning objectives and agenda.

If we believe that it is critical to empower the learners of today to be the business leaders of tomorrow in order to ensure UK PLC remains at the top table on a global economic stage, then doing nothing is not an option.

Q: How has your BESA membership helped you as an organisation?

A: Firstly, it is invaluable to be a part of a suppliers group, to share information and advice with other members and have the ability to get the management team’s advice when needed. We are always happy to share our research data with other members who may find themselves in a similar situation. In terms of our White Paper, the majority of data came from BESA’s research papers, which always provide us with invaluable, credible insight into changes in the sector.

In summary, it’s about trying to ensure that our succession of differing Government administrations continue to pledge a commitment to one computer per child in our schools. After all, our learners of today are our business leaders of tomorrow.

 

Contact details for Syscap

E: contact@syscap.com

W: www.syscap.com

T: 0208 254 1975