Published: 17 February 2016
A more commercial approach to procurement?
The big procurement news story for the HE sector in 2016 is likely to be the increasing boldness of universities to consider themselves outside of the regulated procurement regime. Following changes to the funding of higher education, outlined in the 2011 White Paper: Students at the Heart of the System, the funding model for universities shifted from a system of grants to repayable fees which are allocated on the basis of student choice. This was heavily trailed in the White Paper as reducing the regulatory burden on universities: “because, in the future, most funding will follow students in the form of loans and direct grant funding from the Government will decrease, fewer institutions may be subject to EU public procurement rules”. This position was met with some scepticism amongst the procurement community.
However, this year we have had sourced expert advice from a leading procurement Queen’s Counsel who takes the view that the funds provided to universities by the Student Loans Company and repayable by students on generous terms should be treated as “private funding”. As a result, this opens the way for those universities to adopt a more commercial approach to procurement. This allows universities the ability to move more quickly than the procurement legislation requires. My university clients all adopt a sensible commercial approach, so are likely to continue to adopt a procurement strategy involving widely advertised competitive tenders. The real business case lies in reducing the potential costs and delay of dealing with challenges by aggrieved bidders.