Hefce survey reveals bigger procurement savings

The introduction of purchasing cards for staff expenses has contributed to savings
English universities’ procurement efficiencies have saved tens of millions of pounds in a year, according to a survey by the Higher Education Funding Council for England (Hefce).

Hefce has published the results of the procurement efficiency measurement model (EMM) survey for 2012-13, which show that procurement improvements including e-marketplace systems and collaborative procurement are contributing to savings.

The survey, coordinated by the British Universities Finance Directors Group and the North Western Universities Purchasing Consortium, received 94 responses from English institutions for 2012-13, an increase of over 20% on the previous year.

The headline results include:

  • Procurement efficiencies, achieved through arranging lower prices, improving the quality of the goods and services procured and improving process, amounted to £153m for 2012-13. This ompares with £132m in 2011-12.
  • Following previous Hefce investment in institutional e-marketplace systems through the Universities Modernisation Fund, 57 institutions reported £745m in e-marketplace transactions, saving £35m compared with a 2009-10 baseline.
  • Use of staff purchasing cards for expenses such as travel and accommodation was reported by 87 institutions, with transactions totalling £356m in 2012-13. This represented £16m in efficiencies compared with a 2009-10 baseline.
  • Institutions reported spending more than £800m in total through purchasing consortia in 2012-13, resulting in £46m in efficiencies
  • The survey also collected data on local collaborative purchasing arrangements for the first time. Expenditure of more than £295m was reported in this category for 2012-13.

Hefce says the results understate the true savings because only a sample of organisations took part. It will now discuss the findings with stakeholders in the higher education sector to help disseminate best practice.

The results will inform the next round of the survey, which will be launched in October 2014 and will collect data for 2013-14. Hefce encourages all institutions to participate.

For more information, see the Hefce website.

Rosie Niven
Rosie is the content editor at Efficiency Exchange