Higher education saves big

Feb 25, 2015
New research shows improvements in procurement across England’s higher education sector over the last five years have resulted in a rise in savings and efficiencies of more than 50%.
 
Some £153m was saved during 2013-14 thanks to procurement efficiencies achieved through arranging lower prices, improving the quality of the goods and services procured, and improving or streamlining processes to deliver savings.
 
That compares with £100m in 2008-09 and a further £75m in 2010-11 and reflects the growing sophistication of higher education procurement.
 
The findings come in the latest survey of Efficiency Measurement Model (EMM) data carried out by North Western Universities Purchasing Consortium (NWUPC) on behalf of Procurement England Ltd (PEL), a company that brings together the four English Purchasing Consortia, including LUPC.
 
The study is designed to provide an overall picture of efficiency in the sector and for the last two years has used a new model developed by NWUPC to collect data.
 
The latest data has been released ahead of Sir Ian Diamond’s soon to be published final report to the government on higher education efficiency.
 
The first Diamond review challenged the sector to collaborate on 30% of its non-pay spend in order to drive better value for money. Data from the EMM survey shows collaboration, whether through regional consortia or local arrangements, is now increasingly commonplace.
 
Key findings include:
 
  • some 62 institutions accounted for £1bn of e-marketplace transactions last year, delivering £50m in efficiencies through digital rather than paper transactions
  • universities spent more than £860m via purchasing consortia in 2013-14, a rise of over 8% on the previous year, which resulted in £48m in savings
  • local collaborative purchasing is on the rise – some 54 institutions reported expenditure of over £295m through local arrangements compared with £285m in 2012-13
  • 86 universities used purchasing cards for £192m worth of transactions last year – these charge cards are designed to improve efficiency and saved £16m compared with five years ago
Rex Knight, Chair of PEL and Vice-Provost of University College London, said: “PEL was formed to help coordinate the level of collaboration across the sector and the EMM survey was supported by its four constituent consortia. The results suggest that the Diamond review has assisted in raising the profile and impact of procurement especially in terms of collaboration.”