Universities challenged to step up cost saving efforts

2 December 2004
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02 December 2004 | David Arminas

Higher education purchasers in England are still under pressure to cut costs despite a low efficiency savings target.

They must make an estimated £230 million in savings by 2007-08 as part of the chancellor's efficiency gains.

Gordon Brown announced the efficiency savings targets in his July spending review. He called on the entire public sector to make £20 billion of savings, with the money going into improving the delivery of frontline services.

Towards this target, the Department for Education and Skills (DfES) is to make £4.3 billion of efficiency savings, of which the universities' procurement target is part.

At an open meeting of Proc-HE, the sector's main procurement advisory body, Vincent John, its chairman, told delegates that the savings were modest in relation to the overall higher education sector's £4 billion annual purchasing budget.

"Procurement got off lightly compared to other government departments and agencies, but we are still under pressure within the sector to deliver savings above the targets," he said.

More collaborative purchasing is one way of meeting sector-wide or institution-imposed savings targets, said John, who is also director of procurement at the University of Greenwich in south London. He added that he wanted a "professional and collaborative mindset" as university purchasers consider savings.

But the actual figure for university purchasers is still not set, according to Steve Butcher, head of procurement at the Higher Education Funding Council for England, which promotes and funds high-quality, cost-effective teaching and research in the country's universities and colleges.

"The HEFCE is still in discussions with the DfES about the final amount to be saved," he said.

"Procurement will have to make £97.4 million in the final year, 2007-08. But the figures on a sliding scale for 2005-06 and 2006-07 are not yet set."

John believed purchasers would have to make around £55 million savings for 2004-05 and £75 million for 2005-06.

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