A more commercial approach to procurement? Reply to Uddalak Datta

The extent to which English universities are bound to comply with EU public procurement rules is an issue of growing practical relevance and increasing attention in public debates. 

In his recent blog piece 'A more commercial approach to procurement?',  Uddalak Datta (Senior Associate at Shakespeare Martineau) argues that

'The big procurement news story for the [higher education] sector in 2016 is likely to be the increasing boldness of universities to consider themselves outside of the regulated procurement regime. Following changes to the funding of higher education, outlined in the 2011 White Paper: Students at the Heart of the System, the funding model for universities shifted from a system of grants to repayable fees which are allocated on the basis of student choice. This was heavily trailed in the White Paper as reducing the regulatory burden on universities: “because, in the future, most funding will follow students in the form of loans and direct grant funding from the Government will decrease, fewer institutions may be subject to EU public procurement rules”. This position was met with some scepticism amongst the procurement community. 
However, this year we have had sourced expert advice from a leading procurement Queen’s Counsel who takes the view that the funds provided to universities by the Student Loans Company and repayable by students on generous terms should be treated as “private funding”. As a result, this opens the way for those universities to adopt a more commercial approach to procurement. This allows universities the ability to move more quickly than the procurement legislation requires. My university clients all adopt a sensible commercial approach, so are likely to continue to adopt a procurement strategy involving widely advertised competitive tenders. The real business case lies in reducing the potential costs and delay of dealing with challenges by aggrieved bidders
' (emphasis added).

So, in short and on the basis of the legal opinion of J Coppel QC (as reported by Datta in a different blog post, which unfortunately requires subscription), Datta suggests that English universities can free themselves from the strictures of EU public procurement law.

I strongly disagree with this legal assessment, principally because under the applicable EU public procurement and State aid rules, the fees that the Student Loans Companies pays English universities on behalf of designated students remains "public funding" for the purposes of EU law. This is one of the main conclusions that Dr Andrea Gideon and myself reached in our paper 'When are Universities Bound by EU Public Procurement Rules as Buyers and Providers? - English Universities as a Case Study' (2016) 1 Ius Publicum, art 4.

Andrea and I very much look forward to any opportunity to further explain our position and to contribute to this important debate on the economic governance of English universities. If you are interested, please be in touch (a.sanchez-graells@bristol.ac.uk).