Colleges 'waste money' on services

26 July 2000
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27 July 2000 | Liam O'Brien

Higher education's £5 billion support-service budget is often poorly spent and presents huge scope for efficiencies, according to the author of a new report.

Robert Holmes, a former director of purchasing at the University of Glasgow who has been drawing up guidance for the Joint Procurement Policy and Strategy Group (JPPSG), told SM the sector had relatively poor standards of support-service buying.

Many universities are eight years behind best practice in the private sector, he added.

Guidance on the Procurement of Services for HE Institutions, due to be made public in August, hints that substantial savings can be made through better organisation and management.

A savings target of 5 per cent would realise £250 million a year, suggested Holmes, and would go a long way towards reducing top-up fees.

"The purchasing and management of support services needs to be brought rudely into the 21st century," he said.

"We are looking at universities sharing support services that do not compromise their inter-competitiveness, and at the possibility of outsourcing many services that have traditionally been supplied in-house."

The guidance sets out, among other things, how universities in the same city could share non-core services, such as accounting. It also suggests that they should use the Internet more for purchasing.

Inefficiencies cited include faculties within a university doing their own thing with, for example, maintenance contracts for scientific equipment.

"We are really saying: 'Have a look, think about things and go back to basics'. Up until now, institutions have not looked at strategy and modern ways of supplying services," said Holmes, a procurement consultant.

Karen Watson, head of purchasing at Nottingham Trent University and chair of the Association of University Purchasing Officers, said that while some institutions had fallen behind the times, many were putting leading-edge practices in place.

"At some of the old universities, purchasing is viewed as a stuffy arm of finance and there is someone in the basement who checks the books and issues a bit of stationery," she said.

"There are still a lot of purchasing-officer titles around, which says it all really, but there are also some terrific examples of good work."

Watson added that support-service buying decisions were often limited by understaffing, and that some purchasing departments are run by just one or two people.

Dr Steve New, a lecturer in management studies at the University of Oxford's Saïd Business School, agreed that there was "enormous scope for rethinking the fundamentals" of service buying.

But he also warned against over-simplistic solutions: "It is easy to overstate the advantages of consortia buying, but the costs of managing a consortium can outweigh the savings.

"And services need to be tackled differently - outsourcing is not always appropriate," said New.

The JPPSG guidance follows a report in March by the Higher Education Funding Council for England, which concluded that universities could get much better value for money by co-ordinating their facilities management more effectively.

SMjul2000

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