Put services cash to good use, sector told

Hefce-backed campaign aims to channel funds to social enterprises. David Matthews reports

June 7, 2012

Universities should spend at least £1 billion of their procurement budgets through social enterprises by 2015 to benefit society.

That is the aim of a campaign spearheaded by the University of Northampton and backed by sector bodies including England's funding council, to be launched next week.

Nick Petford, Northampton's vice-chancellor, said the aim of the campaign - titled the £1 Billion University Challenge - was a "fairer society".

"We're not ashamed to say that," he added.

As an example of what could be done, he cited Northampton buying its furniture from Goodwill Solutions, a firm that employs ex-offenders and people who have been out of work for long periods of time.

Funnelling money through social enterprises - which Professor Petford defined as companies where profits are reinvested in the business rather than paid out as dividends - would also support the student experience and promote entrepreneurship, he said.

Northampton owns a minority stake in Goodwill Solutions and other social businesses, which means it is able to place students in the organisations as volunteers or on paid work experience.

"It's a way of guaranteeing them work placements," said Professor Petford. "We do want something in return: this is a business transaction."

Universities spend around £7 billion a year procuring goods and services, according to Northampton, so the challenge would involve them spending roughly a seventh of their budgets through social enterprises.

Professor Petford said his institution would have to at least double its spending in this area to hit the target.

Sir Alan Langlands, chief executive of the Higher Education Funding Council for England, said the campaign was an "excellent example" of how universities were boosting economic growth, and encouraged others to get involved.

Universities UK, Social Enterprise UK and the British Universities Finance Directors Group (BUFDG) have all backed the scheme.

It comes at a time when universities have been urged to combine their buying power to save money.

In September 2011, UUK produced a report, Efficiency and Effectiveness in Higher Education, that called for more bulk buying in the sector to cut costs.

But Karel Thomas, executive director of the BUFDG, said the challenge, which will be launched on 12 June, was "ambitious and very worthwhile", and the sector should support it alongside the targets in the UUK document.

Professor Petford acknowledged that restricting some procurement to social enterprise would cost "a bit more". Yet slightly greater spending now could reap big social rewards in a couple of years, he said.

He drew a parallel with the Public Services (Social Value) Act 2012, which will require local councils to consider the impact on "economic, social or environmental well-being" when deciding from which companies to buy services.

"Universities have enormous purchasing power" and their buying decisions could make a difference, Professor Petford said.


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