Researchers waste money by 'failing' to take advice

June 4, 1999

University researchers are likely to come under fire this month for wasting public money in a report by the public spending watchdog.

The National Audit Office is expected to warn that researchers could save millions of pounds by taking advice on the purchase of equipment and services, and improving procurement practices.

Researchers' determination to keep hold of their budgets has hindered co-ordination of university-wide purchases for equipment and reduced universities' buying power, it is feared.

Researchers maintain tight control of spending on specialised goods, such as laboratory equipment, but fail to consult experts on generic purchases.

The report will come just weeks after the NAO revealed that the sector could save Pounds 22 million if it improved its procurement practices across the board. The report, Procurement in the English Higher Education Sector, said that despite spending Pounds 3.25 billion a year on goods and services, a third of universities did not employ qualified procurement experts.

Large institutions were more likely to employ experts: 90 per cent of universities with a budget over Pounds 25 million employed experts, but only 53 per cent of those with smaller budgets used professional advice. Small institutions, however, needed the expertise most, as they lacked the "purchasing power" of their larger counterparts.

The NAO also warned that institutions that did employ experts often failed to use them properly. "It is important that (experts') skills are used across the range of non-pay expenditure," the report said. "For instance, the procurement of equipment, furniture and other items required to fit out new buildings is an area where procurement managers can add value."

Institution-wide co-ordination is also hindered by poor management information, the NAO said. "Procurement systems remain one of the least-developed areas of management information within the sector," said the report. Universities also had underdeveloped registers of interests and widely varying procedures for putting large purchases out to tender.

The NAO found that 22 per cent of universities did not initiate tendering processes for expenditures of less than Pounds 30,000, while 9 per cent wasted money on administration by inviting tenders for expenditures of less than Pounds 10,000.

But the report also found the sector had made significant improvements since a similar examination in 1993. It estimates the sector saved Pounds 130 million from 1993-94 to 1996-97, and commended the work of the Higher Education Funding Council's joint procurement policy and strategy group for its work setting up value-for-money guidelines.

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