Have shared services reached the tipping point?

Three significant factors may have pushed public sector shared services into real viability?

Over the next 12 months we will be able to judge whether 2011 was the 'tipping point' year for public sector shared services. If it is, then three significant factors will have contributed to it.

First, the publication of the shared services map by the Local Government Association. It shows that 219 councils areengaged in 143 partnerships and evidenced that more than 80 of them are up and running, and have made cashable savings of over £80m to date.

This case study of public sector success was added to by the Universities UK report, Efficiency and effectiveness in higher education, which gives examples of over £100m cashable savings in shared service projects over the past five years. For many this evidence of success and 'banked savings' has been the missing element which has heldsome bodies back from exploring partnership working as an option.

The second event was that shared service project management became a profession. During the year more than 400 leaders and senior managers in local government, fire, police, higher education and further education stepped onto the shared service architect's programme, the first module in the postgraduate certificate in shared services at Canterbury Christ Church University. Those who complete the programme can request to be recognised as shared service practitioners. A number of those have gone on to undertake the full, six-month, postgraduate certificate and will become recognised as shared service architects.

Sir Merrick Cockell, LGA chair and leader of Kensington and Chelsea council, presented the first postgraduate cohort with their graduation certificates in July. Talking to the group, Cockell stressed the importance of training and developing the shared service skills and knowledge of both members and senior managers so that they can deliver the benefits of shared service activity effectively and rapidly. In December, the second cohort received their certificates from Baroness Hanham, Parliamentary Under Secretary of State at the Department for Communities and Local Government. Baroness Hanham echoedCockell, emphasising that shared services can be complex to develop and deliver, and that building public sector shared service skills and knowledge is very important to the success, and rapid delivery, of partnership projects.

The third change has been the announcement by the chancellor in his autumn statement that the government will introduce a VAT exemption for shared services, between organisations in further and higher Education and charities. The inability of these sectors to reclaim VAT on partnership activity has been perceived as a major stumbling block. The chancellor's statement came on the back of more than £16m in partnership seed-corn grants being released into partnership projects during the year by the Higher Education Funding Council for England, the Association of Colleges, the 157 Group and the Learning and Skills Improvement Service. Full story see http://www.guardian.co.uk/public-leaders-network/blog/2012/jan/06/public-sector-shared-services-tipping-point?newsfeed=true 

Removal of VAT barrier to encourage shared services

29 November 2011

By Simon Baker

A major barrier to universities saving money by sharing services is set to be removed by the government.

In his autumn statement today, the chancellor George Osborne said that the government would introduce a VAT exemption for services shared between organisations that are already exempt from the tax, such as universities.
In the past, universities have been deterred from saving money by sharing services such as payroll and procurement because any new operation would have to charge VAT back to the partner institutions.
This would mean that a shared operation would need to save at least the cost of VAT – currently 20 per cent – to be worthwhile.
However, the new arrangements – which had already been consulted on following the 2011 Budget – suggest universities could set up a new joint organisation to run services without facing an extra tax bill.
Nicola Dandridge, chief executive of Universities UK, said the move was “good news” for the sector and met a key recommendation from the recent Diamond Review of efficiency in higher education.

“Universities have wanted to develop more cost-effective operating models, and more creative collaborations with external partners.
“But to date, the VAT rules have acted to block this. We hope today's announcement will address this issue,” she said.
Meanwhile, the chancellor announced the launch of an online portal called HE Global to provide information and advice to universities on expanding overseas and also a vehicle to help the sector, government and business work together in selling “education offers” abroad.
Paul Marshall, executive director of the 1994 Group of smaller research-intensive universities, said: “Having ready access to insight and advice through a resource like HE Global will help institutions implement their own international strategies.
“We’ve also called for a collaborative approach to promoting cross-sector opportunities overseas. The new vehicle proposed in today’s statement will no doubt play a big part in making this a reality. We look forward to helping to take this forward.”
simon.baker@tsleducation.com

Creating Value conference: Who should attend and cost

A keynote address will be delivered by Zoe Radnor (Professor of Operations Management, Cardiff University), and there will be a number of workshops run by colleagues who have delivered efficiencies successfully, both from HE and organisations in the private sector (e.g. on shared services, lean, idea capture schemes etc.).

All are welcome, and the conference is specifically aimed at managers in university professional services, who want to find out more about how their department or unit could work more efficiently and effectively.

Online booking will open in mid-October. To find out more about the conference, visit the website at: http://www.exeter.ac.uk/spc/stratplan/hefcecreatingvalue/conference or contact the conference organisers Steph Sanders (s.a.sanders@exeter.ac.uk) and Iain Springate (i.e.springate@exeter.ac.uk).

Researcher and Project Manager- 'Creating Value'

Strategic Planning and Change

University of Exeter

http://www.exeter.ac.uk/spc/stratplan/hefcecreatingvalue/

www.twitter.com/morewithlessHE

I.E.Springate@exeter.ac.uk

01392 726195

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Creating Value conference: Provisional programme

The provisional programme is subject to change, and will be updated as speakers and their precise topics are confirmed. 
9.00-9.45: Registration and refreshments
9.45-10.00: WelcomePatrick Kennedy, Director of Strategic Planning and Change, University of Exeter.
10.00-11.00: Keynote address, followed by questionsProfessor Zoe Radnor, University of Cardiff
11.00-11.20 Break and refreshments
11.20-12.10: Workshops 

• Implementing Lean thinking- Capgemini. Lean is a generic process management philosophy, looking to make processes as efficient as possible, whilst delivering maximum value for the customer. The aim of the workshop is to introduce the concept of Lean, and consider what the benefits of implementing it might be for universities, based on the example of a large institution that is currently implementing Lean.
• Data mining to identify potential efficiencies. This workshop will discuss how large datasets relating to core university processes can be interrogated to look at how efficient processes are, where savings and improvements could be made, and to provide an ongoing measure of efficiency of processes. The workshop will use as a case study work being done at the University of Exeter to identify gaps in data being collected and to fill them, as well as to interrogate existing datasets in order to identify and deliver savings.
• Using idea capture schemes to gather intelligence from staff on working more efficiently and effectively- Anthony Denatale, Ideas UK. Staff often have great ideas about how their organisations could work more efficiently and effectively. This workshop will look at the benefits of staff suggestion schemes, and how to plan and run one successfully in a university.
• Making shared services successful- Carol Mills, Director of HR, University of Liverpool. Shared services has been identified by Universities UK, among others, as a potential way for universities to make savings. This workshop will look at how universities can make shared services a success, particularly drawing on experience from Liverpool.

12.15-1pm Speed updatingThis session will include several brief updates on how universities are delivering efficiencies and improving effectiveness successfully, and the launch of an online learning resource to help managers deliver savings.
1-1.45pm Lunch
1.45-2.30pm Workshops (repeated)
2.35-3.30pm Making it happen: Increasing efficiency and effectivenessThis session will involve a panel discussion and question and answer session, focusing on ways delegates can take forward some of the ideas presented at the conference, including key challenges and change enablers.
3.30pm Conference close

Creating Value conference: Who should attend and cost 

The conference is open to all, and is specifically aimed at managers in HE working within professional services, who want to find out more about how their department or unit could work more efficiently, and save time and/or money.

Examples of staff that might like to attend are:

• Faculty/School managers
• Assistant Faculty/School managers
• Directors/Assistant of Planning/Projects
• Directors/Assistant Directors of finance
• Project Managers
• Team leaders.

The cost is £145.

Creating Value: Delivering more with less in Higher Education

The University of Exeter is organising a conference entitled ‘Creating Value: Delivering more with less in Higher Education’ on the 5th January 2012. Delegates will hear about practical approaches that universities and those from other sectors have used to successfully deliver more with less, and increase efficiency and effectiveness.
This is important given the difficult economic climate, which, allied with the new funding regime, increasing expectations of students, and increasing global competition, means that to succeed, universities need to become more efficient, agile, and skilled at delivering more with less.  
The conference will focus on different ways that universities have successfully delivered efficiencies, as well as examples of what those in other sectors have done that are applicable to HE, and will aim to provide information and ideas for HE staff to take away and apply in their institutions. The conference will draw on good practice from within and beyond HE, including the work of the HEFCE-funded ‘Creating Value’ project, which has developed an evidence-based set of resources to aid managers in HE to deliver more with less.
The conference will include:

• Keynote presentation from Zoe Radnor (Professor of Operations Management at Cardiff University Business School), who has conducted important research into how institutions, including universities, are improving efficiency/effectiveness
• Practical workshops on delivering efficiencies (e.g.  implementing Lean, data mining to deliver efficiencies, idea capture schemes focused on making savings, and sharing services effectively)
• Speed Updates from several universities about how they are delivering efficiencies
• Launch of a set of online resources to help managers in universities deliver efficiencies
• Panel discussion focused on how to take the ideas from the conference and put them into practice.

Higher education white paper could open the doors to private sector and shared services

Will the long-awaited white paper give private colleges the boost they are looking for?

• guardian.co.uk, Monday 20 June 2011 19.31 BST

Postgraduate students at BPP University College, the first private institution to be granted university college status in over 30 years. Photograph: Susan Swindells for the Guardian

As the dust settles on the launch of AC Grayling's New College of the Humanities (and rarely can so much spin and marketing have generated so many column inches), attention turns to the more serious business of the higher education white paper, expected soon.

The two are linked since this much-delayed policy paper should determine how far the government intends to push its mission to boost the private higher education market. The direction of travel was set soon after the general election, when ministers granted university college status to the BPP University College of Professional Studies.
BPP is owned by the for-profit US education corporation, Apollo Group, which runs the fast-growing Phoenix University, where student enrolment has mushroomed from about 20,000 to almost half a million over 15 years. Does the future lie with multinational, for-profit, education companies? Compared with the booming echo of the expansion plans of this commercial giant, the New College of the Humanities is muted sherry party chatter.
There is potential for the private market to expand in Britain. Globally, private institutions deliver about 30% of higher education, yet in the UK it is much less. Exactly how much less is hard to say as, according to a recent report from the Higher Education Funding Council for England (Hefce), private providers are not required to report student enrolment numbers.
BPP is currently one of only four private providers with their own UK degree-awarding powers. And, although the private sector already operates in higher education in other ways, it remains niche, providing mainly professional, graduate-level qualifications in business, management, law and finance.
So looking to the market to expand mainstream undergraduate teaching requires a leap of faith. But as well as its ideological commitment to the market, the government (or at least the Conservative bit of it) desperately wants to find ways of boosting the supply of undergraduate places at little or no cost to the taxpayer. It also hopes that competition from private providers will reduce unit costs among traditional universities.
The for-profit sector certainly sees opportunities in the UK once the cap on tuition fees rises to £9,000. The principal of BPP, Carl Lygo, told a parliamentary committee last month he has "aspirations to make a wider subject offering" than the current focus on business, law and health. He noted that Apollo already runs universities in arts, communications and wider health subjects, and that "is certainly the aspiration for BPP".
So what does the white paper need to do to boost the private sector? A big risk for private universities is that their degree-awarding powers are only granted for a six-year period. If they lose those powers, their entire business case collapses. Extending that period, or making it permanent, would encourage market entrants.
The other big issue is public subsidy. In the US, for-profit private universities rely almost entirely on student fees since they lack endowments or direct public funding. However, as a recent University and College Union study of the US model showed, there is an indirect public subsidy behind their fee income since students at private universities in the US are eligible for federal student aid. Indeed, it has been claimed that without this indirect subsidy the model would barely be profitable.
At present, in the UK most students at private institutions do not receive state financial support, although they are eligible under certain circumstances. As Lygo told MPs last month, this area is "opaque and obscure, so it is not surprising that the whole of the private sector does not know about that particular source of potential funding". Any white paper measures clarifying this could be a shot in the arm for the private sector.
But what are the risks of opening the taps to greater private provision? The universities minister, David Willetts, should know since his department received a private warning from Hefce last July and that advice has subsequently been published.
In it, Hefce highlighted the risk that private providers could cherry-pick profitable courses, ignoring the high-cost science and technology subjects the country needs. This brings the further risk of destabilising existing universities that, more altruistically, attempt to offer the full range of courses.
Hefce concluded that, taken together, the dangers of greater private sector involvement "may amount to a reputational risk for UK higher education". So, if the white paper does herald a rush to the market, ministers cannot say they were not warned.

mikebakereducation.co.uk