London Metropolitan University has abandoned plans to outsource its back office and campus management functions to a private sector partner – a move designed to cut costs by 50% - after a sudden change to its student and financial landscape. The UK Border Agency’s revocation of LMU’s ‘Highly Trusted Sponsor’ status, effectively its licence to offer visas, earlier in the summer led to half its international students switching to other institutions.
Given the dramatic change in its business, LMU’s decision not to continue with the major 'shared services' procurement, which was near completion, appears sensible. Of course that won’t make it any easier a pill to swallow for the three shortlisted suppliers – Wipro, BT Global Services and Capita – that had invested time and money in what could have been a ground-breaking deal. Instead of the outsourcing contract, the university is embarking upon an “extensive and rapid business process re-engineering exercise focused on [its] support service areas”. That’s likely to mean a different procurement and smaller, shorter contract; we understand that it hopes to have a partner in place by the year end. Perhaps, once it has its house in order, LMU will reconsider the outsourcing option in a bid to cut costs further (PublicSectorViews subscribers should see our recent UK Education SITS Market Trends and Forecasts Report for analysis of trends in the sector).
