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Policy Exchange calls for universities to share services, help students and cut costs

by Paul Goodman

Screen shot 2010-12-22 at 16.01.16 Policy Exchange must be turning out a pamphlet a week.  Today, Alex Massey from its Education Unit calls for universities to reduce potential student debt and protect teaching and research by cutting their costs - for example, by outsourcing such functions as maintenance and accommodation.

In a research note called Higher Education in an Age of Austerity, Massey argues that there are big savings to be had from universities sharing such services as finance, human resources or student records - claiming that up to 30% of the total cost could be saved if more services were shared, meaning savings across the higher education sector of £2.7 billion.

But according to Massey, the Joint Information and Systems Committee (JISC) found that only 26% of HE institutions reported themselves to have any shared services at all, and fewer than 50% of HE managers would “readily consider” sharing services in any area of administrative operations.

He points to schemes such as “Manchester Student Homes” – a joint venture between Manchester and Manchester Metropolitan universities - which provides information and support through a single office, hugely reducing administration costs, and to UCL saving £250,000 a year by using Microsoft’s free email service.

Massey said -

“Too many universities operate in an outdated way. They’ve failed to recognise the savings and service improvements that could be obtained through engagement with commercial partners and the use of shared services.

“Too many university managers continue to regard the private sector with suspicion, rather than recognising the benefits that can accrue from productive collaborative arrangements.

“With students facing higher levels of debt, it is really time for universities to start taking efficiency and value-for-money seriously. Outsourcing and shared service arrangements would be a very good way to reduce costs and improve service quality.

There is no reason why activities like accommodation, IT systems, catering, administration and other non-core services should always be provided in-house, and far too many institutions replicate functions that could be carried out on a shared basis."

Massey's other recommendations include freeing universities from having to pay VAT on outsourced or shared services by giving them a similar exemption to that enjoyed by the NHS, and universities increasing private sector income through such activities as scientific spin-offs and a more entrepreneurial approach to generating revenue from commercial sources.



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