Universities are facing a procurement dilemma

Will Green is news editor of Supply Management
3 April 2014

4 April 2014 | Will Green

Will GreenThe universities sector is facing competing pressures.

On the one hand higher education institutions are facing a more competitive and commercial landscape, as funding is channelled more via student fees and less from government grants. This means more competition to attract students, as funding will follow them.

At the same time, following the Diamond review, the sector is being challenged to push 30 per cent of its spend through collaborative agencies. This will mean a higher level of cooperation and more collaborative approach. This could prove confusing for purchasing professionals in the sector.

Sir Ian Diamond, answering questions at the London Universities Purchasing Consortium 2014 Conference, said it would mean “competing against each other in the same way that major industries do, by sharing where appropriate”. The industry that springs to mind is the automotive sector, but how easy will it be to replicate such a model? Sir Ian said the UK was “at the top of the chart” when it came to efficiencies, and that the competitive environment was part of the reason.

According to LUPC director Andy Davies, the sector is above the 20 per cent mark against the 30 per cent collaborative spend target, but how easy will it be to achieve the remainder? Presumably the quick wins have been made, though the LUPC is expanding its work to take on new areas of spend and more organisations.

A delegate at the conference summed up the dilemma when she asked what she should do when faced with the choice of using a framework or dealing with a non-framework, but more innovative, firm direct. It was suggested she go with the firm outside the framework.

Whatever happens, it can only mean more work for buyers. Davies says their skills will be called on more and more as institutions, many not used to commercial pressures, adapt to the changing environment.

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