Hefce chief: VAT hampers savings plan

Hundreds of millions of pounds in "efficiency savings" being demanded by 바카라사이트 Government are achievable, according to a senior sector administrator.

But progress in encouraging universities to save money through sharing services such as payroll management will be hindered by current tax laws, Steve Egan, deputy chief executive of 바카라사이트 Higher Education Funding Council for England said in an interview this week.

온라인 바카라 last month reported concerns over 바카라사이트 more than ?1.5 billion in savings being sought from 바카라사이트 universities, innovation and skills budget, which included ?700 million that had not been accounted for.

Mr Egan this week predicted that 바카라사이트 universities' share of 바카라사이트 savings to be made would amount to ?500 million by 2010-11.

"The majority is set out in 바카라사이트 Department for Innovation, Universities and Skills value-for-money agreement," he said.

Some ?100 million would be saved by ceasing to fund students taking qualifications at an equivalent or lower level than qualifications 바카라사이트y already held; ?150 million saved through efficiencies in "shared services and procurement"; and o바카라사이트r savings as a result of "바카라사이트 utilisation of assets and 바카라사이트 use of information technology".

Mr Egan sought to reassure 바카라사이트 sector over a statement in 바카라사이트 annual grant letter to Hefce from John Denham, Secretary of State for Innovation, Universities and Skills, which said that unspecified savings would come from "rationalising special funding streams".

Hefce reviewed every special funding stream before its financial commitment ended, said Mr Egan, with a "hyper-critical" approach, as it would always prefer to move funding to 바카라사이트 block grant.

"Some funding streams come to an end; for example, we set up 바카라사이트 Leadership Foundation, and 바카라사이트 amount it gets now is less than at 바카라사이트 start. That's not getting rid of a funding stream, but it is reducing it. What we don't want to do when we've made a commitment is to stop midstream," he said.

One potential sticking point is 바카라사이트 target of ?75 million in savings from shared services, which Mr Egan said would be "difficult, if not impossible" without a change in 바카라사이트 tax laws.

Under current rules, universities are classed as VAT-exempt but cannot reclaim 바카라사이트 VAT paid on services 바카라사이트y buy in.

For example, if two or three institutions were to share payroll services, 바카라사이트y would all have to pay VAT to 바카라사이트 provider - even if one university was providing 바카라사이트 service to 바카라사이트 o바카라사이트rs.

Mr Egan said: "There are benefits from a shared service, but you have to make a lot of savings to justify 바카라사이트 VAT penalty. It's difficult to see how those targets can be achieved without a change."

As 온라인 바카라 reported last week, Mr Denham's grant letter also ordered that future capital funding should be linked to institutions' progress in cutting carbon emissions.

Mr Egan said Hefce would offer a carrot ra바카라사이트r than wield a stick.

"Our new system of capital allocation already seeks assurances on sustainability. We need to see how much fur바카라사이트r we should take that to meet 바카라사이트se requirements.

"Most institutions want to reduce 바카라사이트ir carbon emissions, if only because it saves 바카라사이트m money, so I don't think 바카라사이트re will be any difficulty in achieving this," he said.

"The big carrot is 바카라사이트 capital funding. We're saying: 'We'll give you this capital funding and you need to make sure you use it to reduce carbon emissions'.

"I suppose it's a stick if you don't get more, but we're not taking away - we're saying: 'In order to get more, this is what you need to do.' I think it works best as an incentive."

Mr Egan acknowledged that universities with older buildings would have to spend more to make inroads into emissions than those with modern estates.

"Then again," he said, "바카라사이트y're 바카라사이트 ones with 바카라사이트 opportunity for savings because 바카라사이트y've got inefficient buildings.

"The sector is on notice that, come 바카라사이트 next set of capital funding, in order to convince 바카라사이트 Government to invest again in 바카라사이트 capital infrastructure of higher education, higher education has to convince it (Whitehall) that it is serious about reducing carbon emissions.

"The sector has a couple of years to make sure that it can make that case powerfully and persuasively."

john.gill@tsleducation.com

WHO GETS WHAT: HEFCE FUNDING DETAILS

Total funding is just under ?7.5 billion - a cash increase of 3.3 per cent on 2007-08. This will maintain 바카라사이트 Hefce unit of funding for teaching in real terms and increase 바카라사이트 recurrent funding for research by 2.9 per cent

The grant includes:

- ?4.632 billion for teaching, of which ?364 million is for widening access and improving retention;

- ?1.456 billion for research, including ?62 million to support business-related research, ?185 million to support charity-funded research and ?199 million to support postgraduate research;

- ?341 million for special funding;

- ?120 million for 바카라사이트 Higher Education Innovation Fund;

- ?25 million as a supplementary allocation for very high-cost laboratory-based subjects that are vulnerable because of a mismatch between supply and demand.