Tender document details how company will run university

London Metropolitan tenders all services except teaching and vice-chancellor’s office

By David Hencke and Frederika Whitehead | 14 August 2012

Britain is set to see a private company run nearly all the operations of a public university. A document tendering the contract for the work shows that the winning bidder will run all the services of London Metropolitan university except teaching and the vice-chancellor’s office.

Plans for the UK’s first university to have its operations taken over by a private company are poised to be unveiled within weeks.

The university values the contract to run its own operations alone at £74 million over five years, with an option to extend by three years.

“There is not much hope of education as a public good”
– Nigel Thrift, vice-chancellor, Warwick university

The company will, effectively, be in charge of nearly all services in the university. But the university also intend to promote the winning bidder to take over services of other across England, in a deal worth up to £518 million.

The tender document says: “The successful tenderer may be required to become a service provider to a special-purpose vehicle created by the university, and any resulting contracts may be between the university’s service company and the chosen service provider.”

“The lowest estimated contract value reflects the business-case assessment of value where services are provided to the university alone, and the upper limit reflects the business-case assessment of the likely maximum value of the contract in the event that there is wider participation.”

The following extract from the tender document details the services to be covered:

• Information systems and services, providing IT infrastructure and day-to-day support to staff and students of the university; 

• Registry services, providing student-record maintenance from application through to award and alumnus; 

• Library facilities; 

• Estates, including infrastructure provision, facilities management; 

• Finance, including financial record-keeping and provision of regular information for decision support; 

• Procurement support; 

• Planning, providing support for decision-making using multiple data sources from around the university; 

• Student services, including counselling, financial advice on sources of student funding and careers advice; 

• Marketing and communications support; 

• Human resources, including payroll services; 

• Student recruitment support, for UK, other European Union and other international students; 

• University secretarial support.

London Metropolitan university was created in 2002 by the merger of two former polytechnics. It caters for some of the UK’s poorest students, with a much higher proportion of them coming from families of the lowest income groups compared with the national average.

The university’s drop-out rate is also much higher than average. In 2008, under previous management, the university was found to have misreported its drop-out figures.

As a result, it was forced to pay back £36.5 million of government funding. The ensuing financial storm cost 550 jobs.

However, other “shared-services” initiatives in higher education, such as the Bloomsbury Consortium of six colleges of London university and the M25 Consortium of Academic Libraries, see any savings ploughed back into college services.

Meanwhile, a private college in London is turning itself into a university. Regent’s College, a registered charity, is hoping to win university status after being given the authority to award degrees last month.

Under London Metropolitan university’s plans, any profits from running the institution will go to the private company that wins the tender.

Some senior university figures see privatisation of services as the future for the sector as government funding is reduced.

At Warwick university, the vice-chancellor, Nigel Thrift, was reported in The Boar, the student newspaper, to have argued for the need to accept privatisation. He was speaking in a public debate entitled, ‘The future of the public university’.

He was quoted as opening the debate by saying: “There is not much hope of education as a public good.”

Public universities would not be sustainable in light of increased student numbers, he argued. Most universities around the world were “some sort of public-private hybrid”. He said that Warwick received nearly a quarter of its revenue from the government, and is a private, not-for-profit institution “in all but name”.

And Cardiff Metropolitan university was reported to be considering privatisation as an alternative to controversial plans for a merger of three institutions in Wales.

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