Leicester cuts its take of consultancy fees

November 30, 2007

Academics may charge more for their outside work - and keep a greater share of the income. Zoe Corbyn reports. Academics at Leicester University will be allowed to keep a higher proportion of their earnings from consultancy work as part of an initiative to encourage staff to work harder to sell their expertise to the outside world. They will also be able to charge more for consultancy than the current rough maximum of £1,500 a day.

The university is understood to deduct 40 per cent of academics' consultancy fees as its "overhead", allowing 60 per cent to be kept by the academics, in addition to their regular university salary.

But the university has confirmed on its electronic bulletin board that "the university's overhead rate has been significantly reduced, bringing us into line with many of our peer universities and helping with our competitiveness".

Allister Smeeton, the university's consultancy services manager, declined to give a figure for what the new percentage deducted from fees would be. He said the university's work on the issue was not yet finalised, but new guidelines could be expected in the next few months.

Across the UK, the amount deducted by universities ranges from zero up to 60 per cent.

"We want to encourage academic staff to undertake consultancy as a regular part of their work," said Dr Smeeton, adding that the university had been criticised by staff in the past for taking too much. He said consultancy work both generated revenues and offered staff an opportunity to raise their profiles.

The change is part of a wider overhaul to consultancy at the university.

Leicester is also adjusting the way consultancy fees are charged, moving from a formula based on salary to a market-based rate. Dr Smeeton said most academics were currently able to charge customers rates of between £450 and £1,500 a day, but this could be "considerably more" under the new rules.

The university has also introduced a five-working-week cap on the amount of time staff can work as consultants and has set up an office called "Consult Leicester" to market its consulting expertise more broadly.

"The university has never really proactively marketed its expertise before, but it decided the benefits derived would outweigh the costs," Dr Smeeton said.

The consultancy office will be funded with cash from the Higher Education Innovation Fund.

Leicester's move comes just weeks after an article in the magazine of the Centre for Economic Performance, Centrepiece , highlighted evidence that universities giving academics a greater share of royalties from the commercial exploitation of their inventions earn more from such activities than institutions that are less generous to staff.

The report, by Mark Schankerman, professor of economics at the London School of Economics, argued that monetary incentives produce greater effort by researchers to exploit their work and that the most entrepreneurial of researchers gravitated towards the most generous universities.


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