If recent reports on government budget cuts are anything to head by then higher education isn’t yet out of the woods. Latest figures show that BIS will face reductions in its departmental expenditure limit of £150m in 2013-14 and £280m in 2014-15. Long term projections (2015 to 2018) reported recently show BIS facing reductions of nineteen.2%. And keep in mind that these are only numbers to start out the conversation.
The budgetary threat to the sphere remains high and savings might want to be found. But from where We predict that the reply lies in procurement, not only by channelling procurement savings to more productive uses and building a war chest for capital development and recruitment, but as an essential component of university strategy.
The 2011 Universities UK report, Efficiency and Effectiveness in Higher Education, led by Professor Sir Ian Diamond, vice-chancellor on the University of Aberdeen, made several key recommendations, among them the will for the arena to think and act more strategically on procurement.
Every year the world spends within the region of £10bn buying goods and services – a more joined-up approach has the opportunity of large savings. A key recommendation within the Diamond review was that non-pay collaborative spend reach a target of 30% by 2016 from a current baseline figure of 10.42%. So what does this mean for the sector
UK Universities are already good at working collaboratively on procurement. In Scotland the Advanced Procurement for Universities and Colleges (APUC)has made great progress and Wales also has its own body, the upper Education Purchasing Consortium Wales (HEPCW). In England there are four regional purchasing consortia, in London, the North East, the North West and the South.Together these consortia represent nearly all of UK universities plus associated FE colleges and affiliated public organisations.
In addition chairs and heads of the four English consortia, in addition to other specialist purchasing bodies, make up English National Procurement (ENP), the arena representative for collaborative procurement. And this month saw the primary meeting of Procurement UK, arrange at the back of the Diamond Review to offer high level strategic direction.
Despite this good work there remains a scarcity of institutional understanding and engagement with the procurement process. Put bluntly, it isn’t an attractive topic. But there are a couple of simple things which might be done now to make procurement work better. One is to lift awareness among senior university leaders about what these key staff do. Another is to enhance the talents and competencies of procurement professionals, something the British Universities Finance Directors Group (BUFDG) is co-sponsoring throughout the establishment of the Procurement Academy.
We also have to collect auditable data that evidence improvements and impact. Efficiency measurement model (EMM) statistics, collected by Hefce for this purpose, are a start. But we have to take more seriously other available data on capability and capacity of institutional procurement activity. Surveys of procurement activity called procurement maturity assessments (PMAs) just do this but soak up by universities continues to be too low.
Given their importance, i believe there’s a strong case to make PMAs compulsory. We also need more openness and transparency around the sector. Why should an establishment not be capable to see how the deal they’re getting compares with others There are methods of doing this that don’t fall foul of EU and competition law that must be explored more fully.
There also are other considerations. In January the Social Value Act came into power, requiring public bodies to seem beyond lowest price and think about community benefits when choosing to award a freelance. This ties in with the 1 Billion Pound Challenge launched by the University of Northampton in 2012, asking the world to focus more at the 68,000 social enterprises that contributed £24bn to the united kingdom economy last year []. New EU legislation can be at the way with implications for procurement so one can form the main focus of a forthcoming conference organised by Social Business International and E3M.
All this is often set against a backdrop of accelerating sector pressure distinct from direct budgetary cuts. Confusingly, while higher fees and market volatility are resulting in increased financial pressure, the external message to politicians and the broader public (neither particularly well informed about university finances) is that by charging more to get in, universities are in clover.
The political message is obvious. Government want auditable evidence the world is taking action to enhance efficiency and effectiveness in any respect levels. And the field must get thinking about savings with regards to investments that enhance the coed experience, help build new laboratories and recruit new professors. Provided that savings are expressed as tangible outcomes will people sit up straight and take notice.
Professor Nick Petford is vice chancellor of the University of Northampton – follow him on Twitter @nick_petford
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