Rooms, with a view to more

Firm seizes chance to exploit cuts in funding for sector's capital projects. Melanie Newman reports

April 8, 2010

A private company is looking to run a university's entire infrastructure following the announcement of a sharp reduction in state funding for capital projects in the academy.

In allocations for 2010-11 unveiled last month by the Higher Education Funding Council for England, capital funding will fall by £135 million or 15 per cent.

One response could be for universities to hand over responsibility for parts of their infrastructure to the private sector.

University Partnerships Programme already provides and manages about 20,000 student rooms at 11 UK universities. Now it has set its sights on moving into teaching and research facilities.

Sean O'Shea, chief executive of UPP, said: "Many institutions are now using private money to help fund residential accommodation. I think we can do the same thing with other parts of the infrastructure.

"I definitely see an opportunity to roll out our model to provide teaching spaces without recourse to the public purse or the university balance sheet."

The company has already supplied lecture theatres to the universities of Kent and Plymouth, and is looking to make a more concerted move into this market.

However, Mr O'Shea said UPP would not be seeking to "build an entirely new campus from tomorrow", adding that it would be "a gradual thing".

Under the model that UPP has applied to student accommodation, it designs, builds, finances and operates a building, over which it holds a 40- or 50-year lease.

During the period, it receives student rents, which are set jointly with the university. At the end of the lease it will hand the building over to the institution.

UPP has been lobbying the government and shadow ministers for recognition of the private sector as "a solution to the funding gap", Mr O'Shea said.

"We have invested more than £1 billion in the sector," he said, adding that UPP hoped to invest a further £1 billion in the next two years.

The company sells itself on its skills in private-finance procurement, project management, design, sustainability and construction.

"Universities don't tend to have that expertise in house. Managing this kind of building project is a lot of hard work," Mr O'Shea explained.

In its most recent project, finalised last month, UPP was granted planning permission to build 740 student rooms for King's College London.

Mr O'Shea acknowledged that there were "cultural barriers" to private expansion in the university sector.

Other private operators, such as INTO University Partnerships, a provider of access courses to foreign students, have come under fire from campus unions.

The University and College Union said it provides less favourable terms and conditions to staff than those available to university employees.

However, UPP said that its facilities staff, such as cleaners, may be better off than those employed by universities directly, who it said were often treated as "second tier".

"To us they are core," Mr O'Shea said. "Our philosophy is not to sub-contract. Students get to know the receptionists and cleaners and they become part of the social structure, rather than a continually changing set of contractors."

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