Magazine article Times Higher Education

It Pays to Share: Hefce Offers Cash to Promote Back-Office Tie-Ups: News

Magazine article Times Higher Education

It Pays to Share: Hefce Offers Cash to Promote Back-Office Tie-Ups: News

Article excerpt

Sector yet to take full advantage of tax break for 'cost-sharing groups'. David Matthews writes.

Universities are being offered Pounds 250,000 as an incentive to share back-office services and take advantage of a tax break introduced last year.

After concerted lobbying by universities, the government made new "cost- sharing groups" exempt from VAT, a change announced by chancellor George Osborne in November 2011. But so far take-up of the exemption has been slower than hoped, with potentially embarrassing consequences for the sector.

The money is being offered by the Higher Education Funding Council for England and can be accessed by cost-sharing groups "in the process of formation" to "work through challenges" and provide examples for others to follow.

Steve Butcher, Hefce's head of procurement, said in March that he expected to see a glut of cost-sharing groups in the summer after rules governing the exemption were clarified in May, but so far few projects have exploited the tax break.

One deal in the works in the spring planned to share repair and maintenance services between an unnamed university, a housing association and two further education colleges.

It was hoped that the tie-up would save the university about Pounds 300,000 a year through economies of scale, but PwC, the consulting firm working on the deal, has yet to announce whether or not it will go ahead.

However, FX Plus, a company formed this year that employs non-academic staff at Falmouth University and the University of Exeter, has used the exemption. …

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