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Challenges and opportunities in the new environment

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Challenges and opportunities in the new environment …

Challenges and opportunities in the new environment
Professor Nick Petford, Vice-Chancellor, University of Northampton

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  • 1. Facing the future: Challenges and opportunities in the new environment Professor Nick Petford Vice-chancellor, University of Northampton & Chair, Procurement UK
  • 2. Overview • What do we do in higher education? • Efficiency & value for money – drivers & responses • Challenges & opportunities – the benefits of new approaches?
  • 3. The UK higher education sector... ...is hugely important to the UK economy Worth at least £59bn, creates >660,000 jobs, £5.3bn in exports ...is successful on the global stage With relatively lower investment and 1% of global population, the sector: • • • • Hosts 369,000 overseas students Undertakes 5% of global research Produces 12% of all citations Produces 14% of highly-cited papers ...is seen as an effective performer UK ‘top performer’ out of 28 countries in both teaching & research – UK a case study of ‘good practice’ in EU study
  • 4. Success in delivering savings Reporting period Target (£m) Delivered (£m) 2005/06 151 134 2006/07 150 150 2007/08 198 202 2008/09 126 159 2009/10 241 273 2010/11 363 462 1,229 1,380 Total Efficiency savings in the HE sector (Source: HEFCE) • Delivering world class HE: UK higher education as a global success story • Demonstrating leadership: Taking ownership of difficult decisions on research costs, pay & pensions • Succeeding on efficiency: Towards a 10-year track record of efficiency and value-for-money
  • 5. …however “Higher education in the United Kingdom is undergoing a period of significant change. This is being driven by a number of factors: political, cultural, economic, and technological. The trends are global in their scope, and far reaching in their impact. They affect every aspect of university provision, the environment in which universities operate, what they will be required to deliver in future, and how they will be structured and funded…” Source: Universities UK (2012) Futures for higher education: Analysing trends
  • 6. The Efficiency and Modernisation Task Group • UUK established EMTG in 2010 to look at operational efficiency  Focus on ‘back office’– ICT, finance, estates, procurement, HR, admin  Combined sector engagement and public/private sector expertise  Remit: identify good practice, strategies for change, areas for improvement • Review identified strategies HEIs can use to work more efficiently     process improvement and simplification shared services and outsourcing more effective use of benchmarking better use of collaborative procurement • 17 recommendations for institutions, sector bodies and govt  Sector-level commitment to developing supporting infrastructure  Commitment to monitor, evaluate and report on progress  Responsibility of institutional leaders to address efficiency ‘at home’
  • 7. Efficiency & modernisation project phase II: Overview of the implementation plan 1 Leadership, implementation and monitoring 2 Data, benchmarking and costs 3 Regulation Managing change in universities 1b Supporting implementation: Pilot projects, case studies and guidance 1c 2a 2b 3 Dissemination and evaluation Data and benchmarking to support efficiency A framework for commodity costs Regulation and the efficiency agenda 4 Procurement 4a Strategic leadership in procurement 4b Towards better collaborative procurement 4c Improving capability and capacity in procurement Lead Delivery Partners 2, 6 A framework of resources to support change management AHUA , HEFCE, LFHE, UCEA, UHR, UUK LDPs will produce of framework of resources that HE leaders can use to manage change. The group will identify gaps in provision and make recommendations for further action. 3, 4, 6 Identifying efficiency priorities in operational areas Professional bodies engaged with the EMTG will produce short action plans identifying priorities and outlining how the Diamond recommendations can be applied in their areas All Supporting best practice: Case studies and guidance AHUA , AUDE, BUFDG, UCISA AHUA , AUDE, BUFDG HEFCE, JISC, UCISA 17 Efficiency, academic practice and the student experience HEA, LFHE, RCUK, UUK LDPs should work to identify opportunities for extending recommendations into areas of academic practice and delivery. RCUK and UUK will address efficiency in research. 6 Creating an Innovation and Efficiency Hub JISC, UUK A web-based resource to support and promote efficiency and innovation will be created. The portal will provide access to advice, guidance, case studies and other resources. 16 Establishing a high-level evaluation panel UUK A high level panel will report on progress against the IP. Key sector bodies and the public and private sectors will be represented. An annual report will be made public. 1, 2, 5 Developing data and benchmarking to support efficiency and delivering better public data Coordinating work to provide a better understanding of costs 2 Establishing a coordinated commodity cost framework BUFDG Clarification on graduate contributions and public funding BUFDG, UUK 14, 15 Producing an estimate of the costs of regulation in HE HE BRG 7, 9 Understanding the implications of the VAT Cost Sharing Exemption BUFDG, HEFCE, UUK 2 1a Project 13 Work stream Recs 1, 2, 5 Programme Providing guidance on competition law for universities UUK UUK will commission legal advice on competition law, with particular guidance on shared services and sharing data. This will be disseminated throughout the sector. 12 Procurement UK: a new strategic procurement group UUK A high level group will be convened to lead strategic change in HE procurement. The group will include APUC, ENP, HEPCW, BUFDG and procurement experts, and will lead 4b 12 Delivering more effective collaborative procurement Procurement UK Procurement UK will develop a strategy for delivering more effective and joined up procurement and moving the sector towards the 30% collaborative procurement target. 12 Monitoring the 30% collaborative procurement target Procurement UK Procurement UK will develop a mechanism for evaluating progress against the 30% collaborative procurement target, and commit to reporting against this. 12 Establishing the Academy for HE Procurement BUFDG, CIPS A coordinated programme of education, training and guidance will be developed and tailored to the needs of universities. This will enhance in-house capacity in procurement. 12 Extending procurement capability and capacity assessments BUFDG, CIPS Capability and capacity assessments available to the sector will be extended to increase the effectiveness of university procurement functions. FSSG, HEFCE, HESA, NPG, SCoNUL, UUK TDG, TRAC Review Team Summary LDPs will draw on their existing expertise and resources to identify case studies and best practice relating to process improvement, shared services and outsourcing. This substantial project will have three objectives: (1) to create better and more appropriate data for universities to use; (2) to create a benchmarking framework that will support efficiency in operational areas; and (3) to improve the quality of high-level data on costs in higher education that is publicly available. The engage with the ongoing review of TRAC to help coordinate activity to give universities a better understanding of costs and support more efficient working. BUFDG will develop a coordinated approach to commodity costs across the HE sector. This framework will support more effective benchmarking and procurement. The LDPs will work with BIS to clarify the status of graduate contributions as public funding. Guidance and recommendations may follow subject to the outcome. HE BRG will produce an estimate of the costs of regulation to the HE sector. This work can then be used to make recommendations for action. The LDPs will coordinate work to interpret HMRC guidance on the VAT Cost Sharing Exemption, to identify opportunities for use and to support implementation.
  • 8. Projects led by UUK • Procurement UK Objective: To provide strategic leadership on the development of collaborative and more effective procurement to meet the objectives set out in the Diamond report. • Delivering efficiency through effective benchmarking Objective: To ensure the HE sector has access to a robust, effective and accessible tool to evaluate operational costs in core operational areas • The Efficiency Exchange – a joint project with Jisc Objective: To develop a dynamic multi-media platform that supports HE professionals to embed efficiency, by improving access to sources of advice, guidance and expertise. Go to the new site and tell us what you want the Efficiency Exchange to do: http://www.efficiencyexchange.ac.uk/
  • 9. State of play • Progress recognised by government: “the message on efficiency has got through” (Vince Cable, Sept. 2013) • Continued engagement and enthusiasm: £481m in efficiency savings in 2011/12 – clear momentum to build on progress so far throughout HE sector • No end to austerity: spending decisions to be taken in 2015/16 will be made in a challenging fiscal environment • Universities must continue to invest: human & physical capital key to competitiveness – but context of VfM vital
  • 10. Example: The challenge of capital investment #2: HEI capital expenditure #1: HEI surplus Source: Universities UK (2013) Trends in income and expenditure for higher education institutions
  • 11. Local example of ‘insourcing’
  • 12. Challenges & opportunities: How do we… …build on the excellent work around asset-sharing and disseminate the benefits across the sector? …improve space utilisation, and what is the narrative we should be presenting to government and the wider public? …develop the HE workforce to ensure that we are fit for purpose in the new environment? …build on the work set in train by the Wakeham review to ensure research is efficient and remains sustainable? …effectively monitor, quantify and communicate efficiency savings to government and the public? …ensure that our efforts to deliver both value for money and social value in all that we do?