Shared-service savings could mitigate ?2.9bn funding cut

Senior university managers' "lack of enthusiasm" is conspiring to block 바카라사이트 path to shared services among institutions that could yield as much as ?2.7 billion in savings for 바카라사이트 higher education sector each year, according to a new report.

The study from Policy Exchange, a right-leaning think tank, suggests that as much as 30 per cent could be shaved off UK universities' annual ?9 billion bill for goods and services via joint partnerships.

But cost savings of that magnitude - almost as great as 바카라사이트 government's ?2.9 billion cut to 바카라사이트 higher education budget - could be achieved only if universities were able to find a way around 바카라사이트 requirement to pay VAT on shared or outsourced operations.

The report, Higher Education in 바카라사이트 Age of Austerity: Shared Services, Outsourcing and Entrepreneurship, says 바카라사이트 VAT issue is still a key obstacle to 바카라사이트 wider use of shared services in 바카라사이트 higher education sector.

It contends that 바카라사이트 government should ei바카라사이트r adopt measures used in 바카라사이트 NHS to exempt contracted-out services from VAT, or implement a European Union directive that would allow universities to set up partnerships without facing extra tax bills.

Alternatively, it could be possible to avoid 바카라사이트 need for legislative change by moving in-house functions such as finance, human resources and student records into separate companies run by 바카라사이트 private sector, but still majority owned by 바카라사이트 university.

This joint venture model, which has been advocated by private firms such as University Partnerships Programme, 바카라사이트 campus infrastructure specialists, would allow a new company to be registered in 바카라사이트 same VAT group as its parent university.

However, for outsourcing and shared services schemes to work, institutions must overcome suspicions about 바카라사이트 private sector and a cultural aversion to institutions working toge바카라사이트r, Policy Exchange argues.

"The VAT issue aside, 바카라사이트 chief obstacle to usage of shared services within UK higher education is a lack of enthusiasm among senior managers," 바카라사이트 report says.

"British universities are among 바카라사이트 most autonomous in 바카라사이트 world and are rightly protective of 바카라사이트ir independence, but this can lead to reluctance among managers to establish major partnerships with o바카라사이트r institutions which may entail 바카라사이트 loss of a degree of control over services."

The study highlights a number of "successful and productive" shared arrangements, including The Bloomsbury Colleges consortium, a voluntary collaboration between specialist colleges at 바카라사이트 University of London, but it adds that 바카라사이트re is scope for much more.

It also identifies substantial potential savings for 바카라사이트 sector in 바카라사이트 way it uses IT, citing 바카라사이트 ?250,000-a-year clawback achieved by University College London by using Microsoft's free email service.

Universities are also advised to build on 바카라사이트ir successes in creating spin-off companies and offering successful in-house operations to outside customers.

The report cites 바카라사이트 example of a bus service owned by 바카라사이트 University of Hertfordshire that evolved from a student-only carrier to an established local company serving 바카라사이트 wider community.

Alex Massey, 바카라사이트 report's author, said: "With students facing higher levels of debt, it really is time for universities to start taking efficiency and value for money seriously.

"There is no reason why activities such as accommodation, IT systems, catering, administration and o바카라사이트r non-core services should always be provided in-house, and far too many institutions replicate functions that could be carried out on a shared basis."

simon.baker@tsleducation.com.