Magazine article The Times Higher Education Supplement : THE

Outsourcing Plan Hits the Wall

Magazine article The Times Higher Education Supplement : THE

Outsourcing Plan Hits the Wall

Article excerpt

London Met scales back shared services project amid financial uncertainty. John Morgan reports.

London Metropolitan University has shelved a major outsourcing and shared services project in the wake of the loss of its licence to recruit overseas students, as internal papers reveal fears of financial instability.

Under the shared services/outsourcing contract, worth Pounds 74 million over five years, all London Met services bar teaching would have been provided by an external company.

In the later phases of the three-stage project, London Met was to set up a shared services partnership with a private firm to deliver its non- teaching services, and it was then to create a "special purpose vehicle" with the firm to provide those services to other institutions.

The scheme, the first to try to take advantage of the chancellor's VAT exemption on shared services for organisations such as universities, would have signalled a major shift towards externally delivered non-teaching services in higher education.

But following a report by the Exaro news website on 19 October, London Met confirmed that it had shelved the bulk of the project. The university will now proceed only with the first stage, in which a private firm will reshape non-teaching services but they will remain in-house.

"The university has decided to stop the shared services procurement and to replace it with an extensive and rapid business process re-engineering exercise, focused on our support service areas," a London Met spokeswoman said. …

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