Procurement strategy: look after the pennies

May 13, 2010

Next year's recurrent grant announcement signals difficult times ahead for England's academy. Of course, it is just the start.

To meet the challenges ahead, we will have to be more creative with the resources we have, and that will mean looking after every penny we spend. Some institutions will see an impact on staffing and the courses they offer. However, staff costs rarely add up to more than 60 per cent of total expenditure. Changes in the way we buy goods and services would go a long way to closing the funding gap.

Many institutions employ procurement professionals who have driven value-for-money improvements across the sector. But in too many cases they are undersupported, under-resourced and undervalued. Only the enlightened see procurement as a strategic rather than an administrative activity.

There is so much more that the sector can achieve from collaborative procurement. Last year, the four not-for-profit higher education purchasing consortia, which we represent, saved more than £70 million for institutions from a spend of more than £500 million at a total operating cost of about £1.5 million.

Recent research shows that simple behavioural changes can make a huge difference to spending, and we don't just mean tightening belts and cutting back. For example, we've found that business travellers in our sector could save 16 per cent on air fares just by booking flights an average of three weeks earlier.

The only limits to our potential are the commitment of institutions and the resources at our disposal. So we call upon everyone in the sector, including academics and managers, to buy into collaborative procurement. We have already shown what it can achieve.

Andy Davies, director, London Universities Purchasing Consortium; Paul Tomany, managing director, North Western Universities Purchasing Consortium; Simon Toplass, head, North Eastern Universities Purchasing Consortium; Susan Wright, head, Southern Universities Purchasing Consortium.

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