56 | VWV: OPINION | F INANCE AND MARKETS
S H A R E D
S E RVIC E S : A BR AV E
NEW WO R L D ?
Generating efficiencies through sharing services is nothing new, with a wide range of models already in use across the sector. But one size does not fit all and there are a wide range of potential structures. Gareth Edwards and David Hansom, from leading national education law firm Veale Wasbrough Vizards, look at some of the issues
Shared services are high up the agenda across the higher education sector. In 2013, Universities UK's modernisation task force identified "millions" of possible savings. This builds on the major efficiency drive by institutions which BIS estimates has reportedly already saved the sector £1.38bn between 2005 and 2011. Barriers to sharing services are well
known, ranging from concerns over potential cost and complexity as well as dealing with changes to staffing and property requirements. In 2014, with institutions having to respond to a further 3% reduction in funding and ever more competition for students both nationally and internationally, many of these old barriers are starting to be broken down. From a legal perspective, the decision
to share services can create a wide range of problems including employee issues, property needs, assets, treatment of intellectual property and data protection. What is important, however, is that legal considerations alone do not drive the project. The first step in any decision to share services is a commercial one to identify the overall objective of the collaboration. For example, is the main driver to simply take cost overheads out of the institution, to drive up service quality, or both? Regardless of the aim, it will be imperative for institutions to maintain their reputations for quality and excellence. Once the aim is identified, the
institution will want to be clear on the scope of the collaboration. So-called 'back office' services (including HR, facilities management, payroll, security, estates, legal services and even procurement) have been shared and outsourced in the wider public sector for many years and are perhaps the most immediate candidates for collaboration in higher education. There is no need to stop there. Some institutions have taken sharing even further and examples include a partnership between a university with a local NHS trust to develop their own combined heat and power plant to reduce energy costs, as well as proposed projects to share student registry services.
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