Universities 'scared of private sector'

Thursday, 23 December 2010 12:01 AM

By politics.co.uk staff

Massive efficiency savings which could drive down costs in higher education are only possible if university managers get over their suspicion of the private sector, Policy Exchange has claimed.

A report by the centre-right thinktank's Alex Massey published today argues that significant benefits are possible from "productive collaborative arrangements".

Up to 30% of the total cost of university administration could be saved if more services were shared, the report claims. Across the total higher education sector this amounts to £2.7 billion.

"In a more competitive and market-oriented system with tuition fees reaching £9,000, students will rightly have higher expectations of their universities," Mr Massey said.

"Outsourcing and shared services can improve the quality of non-core services while freeing funds to be focused on the delivery of a university's core functions of teaching and research."

Big savings from universities sharing services like finance, human resources or student records are believed to be possible. Maintenance and accommodation could also benefit from being outsourced.

Only a quarter of higher education institutions share any services at all, while less than half of higher education managers would "readily consider" sharing services in any area of administrative operations.

Mr Massey believes that, against a backdrop of massive cuts to the higher education budget, universities are missing out on opportunities to mitigate the damage.

"Too many universities operate in an outdated way," he added. "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."

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