One of the elements implicit in the on-going discussion about higher education reform in England concerns the extent to which changes in the funding and governance structure of HEFCE (to be transformed into the Office for Students, or any other format that results from the consultation run by BIS) can free English universities from their duty to comply with EU public procurement law.
The issue is recurring in the subsequent waves of higher education reform in England, and the same debate arouse last summer following BIS statements that the most recent reform (lifting the cap on student numbers) would relieve English universities of their duty to comply with EU public procurement law (see discussion here).
Overall, then, there is a clear need to clarify to what extent English universities are actually and currently obliged to comply with EU public procurement rules, both as buyers and as providers of services. That analysis can then inform the extent to which in the future English universities are likely to remain under a duty to comply with EU public procurement rules.
In this study we provide an up-to-date assessment of
situations in which universities are bound by public procurement rules, as well
as the combined changes that market-based university financing mechanisms can
bring about in relation to the regulation of university procurement and to the
treatment of the financial support they receive under the EU State aid rules.
National differences in funding schemes are likely to trigger different answers
in different EU jurisdictions. This study uses the situation of English
universities as a case study.
The first part focuses on the role of universities as
buyers. The traditional position has been to consider universities bound by EU
public procurement rules either as state authorities, or because they receive
more than 50% public funding. In the latter case, recent changes in the funding
structure can create opportunities for universities to free themselves from
compliance with EU public procurement rules.
In the second part, we assess the position of universities
as providers. Here the traditional position has been that the State can
directly mandate universities to conduct teaching and research activities.
However, new EU legislation contains specific provisions about how and when teaching
and research need to be procured if they are of an economic nature. Thus,
accepting the exclusion of university services from procurement requirements as
a rule of thumb is increasingly open to legal challenge.
Finally, the study assesses if and in how far universities
can benefit from exemptions for public-public cooperation or in-house
arrangements either as sellers or buyers.
We have submitted our piece of research to BIS as part of the consultation on the green paper. We hope that our research and the insights it sheds can inform the discussion on the new mechanisms for the allocation of the teaching grant to English universities (and particularly the discussion around Q18 of the consultation).