Universities must collaborate to cut costs

Adam Leach is a freelance business journalist
26 September 2011

The UK’s higher education sector should aim to direct 30 per cent of its indirect spend through collaborative procurement.

According to Efficiency and effectiveness in higher education  published this month by representative organisation Universities UK (UUK), the sector must step up collaborative purchasing efforts to fully realise potential savings on offer.

The report calls for the Strategic Procurement Group (SPG) – set up as part of UUK in 2008 and whose work finished this year - to be charged with providing “high-level leadership and strategic co-ordination” in developing purchasing across national higher education sectors in England, Northern Ireland, Scotland and Wales in order to meet the target.

It says a refocused SPG should be established by spring 2012 and hold the first meeting that summer to develop an action plan to buy 30 per cent of indirect spend together. Led by Universities UK and run in collaboration with the various national procurement bodies, it should have senior-level membership with a vice-chancellor as chair and be staffed with representatives from both the public and private sector.

Professor Ian Diamond, vice-chancellor of the University of Aberdeen and chair of the Universities UK Efficiency and Modernisation Task Group, said: “Our aim is not to identify how universities can save money in the short term. We want to show that it is better for students, universities and our economy if universities place efficiency at the heart of their long-term plans, so we can continue to enjoy an autonomous and diverse sector made up of effective universities providing the high quality teaching and research we have come to expect.”

The report’s recommendation follows the success of Advanced Procurement in Universities and Colleges (APUC) in Scotland which has delivered annual savings of £10 million in cashable and non-cashable benefits through collaborative purchasing. Initiatives launched by APUC Scotland included an e-procurement system called PECOS, which is used by 47 institutions enabling them to pool their buying power. There are also a number of sector- and institution-wide programs.

The report calls for the relevant sector bodies in England, Wales and Northern Ireland to set up versions of APUC, calling APUC a “good basis” for developing a collaborative purchasing strategy.

"A great deal has been achieved by APUC in Scotland," said Andy Davies, director at London Universities Purchasing Consortium. "It just goes to show what can be achieved with political will, empowerment and proper funding. APUC received £2m a year from the Scottish Government for a small number of universities relative to England. It'll be interesting to see if Universities UK's recommendations can attract funding to the same degree."

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