London Metropolitan University to outsource most services to private firm

A London university has drawn up an ambitious outsourcing programme in which a swath of services, from managing its estates to marketing and finance, will be carried out by a private firm. London Metropolitan University, which has more than 16,000 undergraduate students, has produced a tendering document under which all services except teaching and the vice-chancellor's office will be outsourced. The contract is valued at £74m over five years, according to the Exaro News website. The services include IT, library facilities and student services, such as counselling and careers advice. Three companies – Wipro, BT Global Services and Capita – are on the university's current shortlist. A spokesman for London Met said it will pay a fee to any company brought in to manage services, which will have "zero ownership" of the university. "If London Met decides to set up a subsidiary company, it will be 100%-owned by the university. Staff would be working for this wholly-owned subsidiary of London Met." The university's vice-chancellor, Malcolm Gillies, has argued that the outsourcing model could be used to share services with other universities. In an article for Times Higher Education , he wrote: "Working with external operators, London Met wants to go further: to realise a model of new-era shared services that other institutions may want to adopt or join." The university spokesman said the contract to run services will be awarded in the autumn. The spokesman said: "We hope to develop a pioneering approach to improving services by investing in our people, reducing cost and putting the university on a sustainable financial path.We believe that there are opportunities to share services between higher education institutions." In last year's autumn statement, the chancellor, George Osborne, announced a VAT exemption for services shared between organisations that are already exempt from tax, such as universities and charities. Nicola Dandridge, chief executive of Universities UK, said at the time: "Universities have wanted to develop more cost-effective operating models, and more creative collaborations with external partners. But to date, the VAT rules have acted to block this. We hope today's announcement will address this issue."