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Shared services

January 5, 2012

George Osborne’s November commitment to exempt universities from VAT on shared services should appear in 2012 financial services legislation.

Though lacking the headline value of fees etc – this may be the most significant change amongst all of the government’s reforms. Especially in terms of jobs.

I, along with people like Andrew Fisher, have been stressing this for a while.  Here is a report from the Times Higher Education regarding a recent announcement from Malcolm Gillies, who as well as being vice-chancellor at London Metropolitan seems to be chair of a grouping of London Higher Education Institutions.

VAT on these services – such as payroll, ITC provision – has been an impediment to universities getting together to pool ‘backroom’ operations.  Gillies: “If every university tendered together for insurance, payroll or careers, you can see that would drive lower unit costs.” 

This is likely to stimulate a new round of outsourcing in general, but more significantly, for federal universities like the University of Arts London much of its raison d’être would disappear. (The less said about its centralised research, the better).


  1. This has already happened with Birmingham and Nottingham’s announcement that they would merge back-office services.

  2. Of course, in schools and FE the opposite occurs as they become independent of Local Authorities who used to pool back-office services with savings that are now lost as bureaucracy is recreated in each school and college. (Not that this would be a good idea for universities as you rightly indicate above.)

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