Facing the future: Challenges and
opportunities in the new environment
Professor Nick Petford
Vice-chancellor, University of Northampton &
Chair, Procurement UK
• What do we do in higher education?
• Efficiency & value for money – drivers &
• Challenges & opportunities – the benefits of
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
Success in delivering
Efficiency savings in the
HE sector (Source: HEFCE)
• Delivering world class HE:
UK higher education as a global
• 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
“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
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’
Efficiency & modernisation project phase II: Overview of the implementation plan
Pilot projects, case
A framework for
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
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
Supporting best practice: Case
studies and guidance
AHUA , AUDE, BUFDG,
AHUA , AUDE, BUFDG
HEFCE, JISC, UCISA
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.
Creating an Innovation and
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.
Establishing a high-level
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
Coordinating work to provide a
better understanding of costs
Establishing a coordinated
commodity cost framework
Clarification on graduate
contributions and public funding
Producing an estimate of the costs
of regulation in HE
Understanding the implications of
the VAT Cost Sharing Exemption
BUFDG, HEFCE, UUK
1, 2, 5
Providing guidance on
competition law for universities
UUK will commission legal advice on competition law, with particular guidance on shared
services and sharing data. This will be disseminated throughout the sector.
Procurement UK: a new strategic
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
Delivering more effective
Procurement UK will develop a strategy for delivering more effective and joined up
procurement and moving the sector towards the 30% collaborative procurement target.
Monitoring the 30% collaborative
Procurement UK will develop a mechanism for evaluating progress against the 30%
collaborative procurement target, and commit to reporting against this.
Establishing the Academy for HE
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.
Extending procurement capability
and capacity assessments
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
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.
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:
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
Example: The challenge of
#2: HEI capital
#1: HEI surplus
Source: Universities UK (2013) Trends in income and expenditure for higher education institutions
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
…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?