Durham University blazes an IT trail

8 Oct 98
Durham University has outsourced its information technology services in the first such Private Finance Initiative (PFI) scheme in higher education. The contract covers the university's IT systems for student administration, finance, payroll, personnel, re

09 October 1998

The contract was won by Unisys, the international IT company, and signed despite early opposition from staff. It is believed to be worth more than £3.4m, the threshold at which European Union procurement rules apply.

Durham's is only the second PFI Pathfinder project to go to contract, following Falmouth College of Art. Pathfinders are funded by the Higher Education Funding Council for England (Hefce) from 1993, in a scheme in which the Hefce contributes half the cost of professional advice.

Contracting out services to the private sector is still regarded as innovative in higher education. Colleges tend to be secretive about the value of contracts.

Three new Pathfinders were announced by Hefce in April and it is to publish case studies and guidance for higher education colleges later in the year.

Of the eight Pathfinder projects now on Hefce's books, one is a combined heat and power scheme for a consortium of London colleges. In another, the University of Westminster is considering passing the management of its student accommodation to an outside company.

All of the schemes must meet the government's PFI rules for councils and health authorities, whereby the private sector must bear some of the risk. Most are 20 or 30-year contracts giving clients and lenders 'step in' rights if the contract goes wrong. Transfer of Undertaking rules apply in all cases.

Tim Russell, private finance adviser with Hefce, said: 'Our objective in the pathfinders is to show what works and gives good value for money and to pass those lessons on.'

Durham University's new IT system will integrate student admissions with its finance and management software. There will be no redundancies and some of the university staff will transfer.

Nigel Sternberg, a partner at Eversheds, the solicitors which advised on the deal, said that the Durham contract represented a 'major opportunity' for the university. If it succeeded, Unisys would have its eye on the other 135 higher education institutions in England, as a potentially lucrative market.

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