| 2 March 2007 |  |
| To | Heads of HEFCE-funded higher education institutions |
| Direct Line | 0117 931 7300 |
| Direct Fax | 0117 931 7203 |
Circular letter number 05/2007
For further information contact Ian Lewis, tel 0117 931 7336, e-mail i.lewis@hefce.ac.uk
Dear Vice-Chancellor or Principal
Procurement in the higher education sector: next steps
1. In August 2006 we invited views on the development and strategic management of procurement in the higher education sector (see HEFCE 2006/33a). A summary of responses to the consultation was published with that document on the web.
2. In the light of the outcomes of the consultation, we have discussed and agreed the next steps with the Scottish and Welsh higher education funding councils.
3. Currently central funding for procurement initiatives, including Procureweb (the sector's information hub which supports procurement within universities and colleges and the Research Councils), is provided by the funding councils through Proc-HE. Proc-HE was set up with funding for a limited period. It has achieved much in developing good practice tools and guidance, development and delivery of training in specific areas of need, and moving forward the thinking on procurement management information systems. However, recent changes, such as the increasing focus on efficiencies and shared services, have led us to consider where our support for procurement is likely to be most effective in the future.
4. We therefore intend to refocus our efforts on two fundamental areas:
- Engaging with institutional senior management to increase awareness and understanding of the role that effective procurement can play in delivering institutions' aims and objectives.
- Integrating and co-ordinating collaborative procurement activities in the higher education sector, building on the successful arrangements that already exist.
5. In light of this change of focus and the outcomes of the consultation, we have agreed with the other higher education funding councils to cease funding Proc-HE after 31 July 2007. Additionally, the Universities UK procurement group has been established to address the need for a strategic approach to procurement which is more inclusive of institutions and institutional senior managers. It is therefore well-placed to provide a leadership role.
6. It is important, though, that Proc-HE's good work is carried forward. We will therefore look to embed these activities with existing procurement bodies in the sector.
7. Many of the responses to the consultation document highlighted the importance to the sector of Procureweb. The funding councils recognise Procureweb's value and potential, and have agreed to continue funding it, but we also recognise that it requires a more permanent and secure home than it has had until now. We have considered a range of solutions and the preferred option is to transfer the management arrangements for Procureweb to the Joint Information Systems Committee (JISC) as from August 2007. As part of the JISC portfolio of services, Procureweb will have access to the technical expertise required to manage the service so that it operates effectively, and it will be able to develop to deliver the functionality required by an increasingly demanding and knowledgeable user base.
8. This has been agreed by the three higher education funding councils. Management arrangements for Procureweb will transfer to JISC as from 1 August 2007.
9. As far as HEFCE is concerned, we continue to see our role as being to promote and support best procurement practice, but we believe that the lead on this should be institutions themselves. We see our future role as:
- supporting institutions' efforts to improve procurement performance, and
- responding to government procurement initiatives on behalf of the sector.
10. We will also consider how best to assess progress through our assurance processes, without increasing the accountability burden on institutions.
Yours sincerely
Professor David Eastwood
Chief Executive