The higher education ‘market’: competition that breeds collaboration?

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Almost three years have passed since the government’s decision to increase the tuition fees cap, but the impact of competitive forces on universities’ relationship with the private sector seems to be more keenly felt than ever. Andy Shenstone, market director for Capita’s consultancy business, explains.

‘Business-university collaboration’ has proved something of a BIS mantra since 2010, with the department commissioning two wide-ranging reviews – both aimed at improving links between higher education and the private sector – over the last three years. However, bar a few notable exceptions, shared service ventures involving HEIs and commercial organisations have been slow to come to the boil. According to Andy Shenstone, that could be about to change.

Shenstone, who manages Capita‘s education consultancy business, recently spoke at an event on the future of shared services and was struck by the support now available to universities interested in establishing jointly-run functions. He believes that HEFCE and UUK initiatives such as the Efficiency Exchangecould provide a springboard for further collaboration between institutions and private sector companies.

“The higher education eco-system has started to come together to provide opportunities for universities to get better value from some of the services they necessarily consume,” he says.

“There is an awful lot of support out there. I think there is a real challenge for individual institutions to assess themselves against those opportunities.”

Shenstone, who thinks this autumn could see a number of institutions issue tenders for joint ventures, highlights Capita’s strategic arrangement with one new university client as an example of how HEIs can make the most of private sector partnerships. Capita and the university are creating a joint Partnership Contribution Fund, through which they will fund research, teaching and knowledge exchange activities. This opportunity to contribute to the university’s research, teaching and knowledge exchange activities will produce valuable business benefits for both Capita and the university, as well as enhanced educational and employability benefits for the institution’s students and graduates.

This represents a real departure from the traditional domain of shared services, which has tended to centre on back-office functions such as HR, procurement and IT. Shenstone thinks that this is just the start, highlighting student contact and communication services as potential ports of call for future outsourcing.

“From my perspective, any key strategic partnership between an organisation like Capita and a university needs to not only include transactional elements, but needs to address clearly the value added to the student experience,” he says.

“That might encompass any part of the student life cycle, from how the partnership might contribute to recruitment and retention through to graduate employment.”

The diversity of business models that could emerge, together with the fast-changing nature of universities’ raison d’etre and income streams, leads Shenstone to conclude that the transition from higher education sector to market-centered “system” is underway.

“Universities recognise the increasingly market-driven environment in which they’re operating means they have got to think carefully about their ongoing resilience and quality of service they can provide,” he says.

“The changed funding environment requires universities to be much leaner and to make a much greater net return so they can invest in capital expenditure, in a way they never had to do in previous years.”

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Universities recognise the increasingly market-driven environment in which they’re operating

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