1. Drivers for change

1.1 Budgetary pressures

Information and Learning Services (ILS) has been set stiff financial targets by the University, in particular that moves be made to reduce the annual revenue budget by �300K. From this Information & Communication Systems (ICS) has been set its own savings target of �100K. All avenues will need to be explored to meet this challenging target. Potential savings from all areas in ICS, including in Media Production Services (MPS), will need to be considered.

1.2 Wider ILS review

The Deputy Vice-Chancellor (Resource Development), Professor Peter Evans, (DVC(RD)) has initiated a wider review process of the role and the nature of all work within ILS. It is understood this will take the form of a number of smaller reviews, examining each area of work of ILS. The reprographic activities of Media Production Services, specifically central photocopying, litho, and print finishing, are the first areas to be addressed by this process.

1.3 Current production hardware is at the end of its useful life

The DVC(RD) has noted that two of our most expensive pieces of equipment, the high volume photocopier and the litho press, are at or close to the end of their useful lives. Other bulk copiers in the smaller campuses are also due for replacement. Replacing such items represents a major commitment by the University. The DVC wishes a full review of reprographic activities to be made before entering into such a large commitment. This is the reason that reprographic activities are to be the first to be reviewed as part of the wider ILS review process.

1.4 HECA

Through the national Higher Education Copying Agreement (HECA), departments are able to obtain powerful copiers with no capital outlay, that are capable of bulk work and a reasonable degree of finishing. Before HECA, such devices could only have been provided via a central facility. The cost of a HECA copy (1p + VAT for each click) is less than the current MPS central copying click charge. The fact is that HECA, while good news for departments, undoubtedly makes it less easy to justify a large central copying facility. It is essential that we aim to undercut the HECA price with our central service, whilst recovering us much of our own costs as possible. If we cannot better the HECA rate, departments may choose not to use our service.

1.5 The possibility of outsourcing services

Where the University feels it can obtain a service of equal quality for less cost from an external company, it will consider outsourcing this service to the external company. This has happened, for example, in the case of management of the halls of residence. However, the University is not dogmatic about wishing to outsource under any circumstances: where a University-run service proves cheaper than an outsourcing option, the University will keep its own service. This has happened, for example, in the case of Estates maintenance work. The onus is increasingly on support services such as MPS to justify that they provide better value than an outsourced solution.

1.6 Changes in VAT regulations

MPS takes advantage of its status as a ‘self-supplier of stationary’ to keep its costs to customers down. In a number of circumstances, this status allows MPS to reclaim VAT, and not levy VAT on its own charges. The VAT rules are rather technical, and change from time to time. The University has recently been advised that MPS activities might need to be moved under the umbrella of the University of Plymouth Trading Company Ltd. (UPTC) for VAT reasons. Our current understanding is that this particular change would be relatively transparent from the point of view of staff, and is a relatively minor issue in comparison with the other drivers for change.

2. Options for change

2.1 Minor changes only

The review might establish that our reprographic services meet the needs of the institution at an acceptable cost, and any reduction would damage the academic work of the University. However, it is only fair to point out that the pressure to drive down costs at present is substantial, and many of the methods of improving efficiency employed in the private sector have not really been tried in Universities on a wide scale so far.

2.2 Move to shift working

At present, reprographic work takes place on expensive machines during normal office hours, plus overtime as appropriate. For a large proportion of time, the machines are idle. In principle, one could reduce costs by reducing the number of machines and running them for longer. Within the University, Estates Services have moved some of their maintenance staff on to continental shift working patterns, with an early shift running from 06:00 to 14:00, and a late shift from 14:00 to 22:00. Such a change within MPS might, for example, allow us to drive down the central copying click charge to below the HECA rate.

2.3 Rationalisation of services at the smaller campuses and PBS

At present, in addition to the central bulk photocopying facility in Kirkby Terrace, smaller satellite facilities exist at Seale-Hayne, Exmouth, Exeter and PBS. In all except Exeter, staff involved in central copying are paid from the MPS staff budget. In principle one would be able to reduce costs by closing down one of more of these smaller facilities, and transferring work to one of the others. In this scenario, clear service level agreements covering the transport and delivery of completed jobs between sites would be required, to ensure that customers continue to receive a satisfactory service.

2.4 Partnership with a commercial organisation

Even under a continental shift arrangement, powerful machinery in Plymouth would be idle between 22:00 and 06:00. There are no other bulk copying facilities available in the city, and it may be that a commercial operation would pay good money to MPS to run a night shift in a prime city centre location, using its own staff. The income generated could be used to reduce MPS’s charges to University customers. There are a number of other ways in which such a partnership might work to the benefit of both parties, so this is potentially a very attractive option.

2.5 Full outsourcing of MPS reprographic activities

It might be that a commercial organisation can offer to provide an equivalent service to MPS, but at lower cost to the University. If that were the case, University senior management, though mindful of the loyalty and commitment of the University’s own staff, would have take such an offer very seriously, as such a move would help the University meet its tight financial targets. However, it may be the case that a commercial operation would not be able to match MPS. There is no alternative volume reprographic service in the Plymouth area, and a commercial operation might be required to charge VAT on its service. MPS turns around 25% of its annual volume of work in a single month, at the start of semester one. Commercial operations are not usually geared for such an uneven workload. There are a number of other ways that MPS’s work is geared up to the particular needs of the University.

2.6 Electronic submission of jobs for volume laser printing

At present we are looking at technical solutions to make it as easy as possible for staff to use central volume copiers, by submitting jobs from their PCs via the network. Clearly this would need to be more sophisticated than sending a normal print job to an ordinary printer. Human input and quality control processes are required. This work would have proceeded regardless of the wider review, but has been given greater impetus by the new agenda, to make our service as accessible as possible to our customers.

3. Review methodology

3.1 Market testing

A fair and systematic method of choosing between the above options is required. In previous years, a value for money audit on MPS’s activities has been carried out by external auditors. This has always shown that our costs compare favourably with those in the commercial sector, and this is taken as a sign that our service is properly run. The important principle is that our own operation is compared with that of ‘the market’.

3.2 Levels of service

Other University staff are generally not interested in the precise detail of what goes on inside MPS. They are not generally interested in which copier was used, which member of staff was responsible, etc. They just want the work done to a proper standard and on time. The way we deliver against the expectations of all our customers defines the level of service that we provide. At present we do not have formal, written service level agreements (SLAs) with our academic customers, though there have been moves in this direction in a number of areas in the University. At present we are clearly documenting all levels of service that we provide, to feed into the review process.

3.3 Full cost of our service to the University

An analysis has been performed of the full cost to the University of MPS activities. Full costs include staff salaries, electricity, heating, space occupied, as well as the more obvious things such as materials, consumables, repairs, etc. There is a misconception in some parts of the University that MPS operates on a full cost recovery basis. This is not the case. Our analysis shows that for the reprographic side of MPS’s work to recover its full costs, we would need to increase our charges across the board by 20%, generating an additional �200K. To put this into perspective, the total annual turnover of MPS is approximately �1 million.

3.4 The OJEC tender process

Our financial regulations require that any large contract that the University is considering entering into must be subject to a formal public process called an OJEC tender. This is a lengthy process, which can take six months or more. First, brief details of the what the University wants are published in an EU journal that is widely circulated. Any companies that feel they might be interested in supplying the University respond by providing some simple information on their operations. A shortlist of responding companies is drawn up. These companies are then provided with the detailed requirements of the University, set out in an ‘operational requirement document’. They are invited to provide a detailed responses to this, with all costs declared, in a ‘tender document’. When tender documents have been submitted, the University judges between them in a systematic way. The University is not obliged to accept any of the tenders if none meets the University’s requirements.

3.5 The MPS OJEC tender

In the case of volume copying, litho and print finishing, it has been decided that the University will begin an OJEC tender process inviting outside companies to provide some or all of these activities, as defined by our current levels of service, on a partnership basis or as a fully outsourced operation. The University will then be able to tell if there is any interest from ‘the market’ in any of these areas, and how the ‘market’ costs compare with our own full costs. On the basis of this information, and any other relevant factors, the University will decide on the best way to proceed.

It must be stressed that the fact that an OJEC process is taking place does not mean that a decision has already been made to transfer some or all of MPS’s activities to the commercial sector. No such decision has been made, and this is a genuinely open-minded review process. The tender process gives a systematic framework for our own operations to be compared with ‘the market’, as has happened in previous value for money audits. Also, it must be stressed that any partnership arrangement as described in section 2.4 above, which might provide a very attractive solution for the University, could not take place without having been the subject of a formal tender process.

3.6 University of Plymouth Review Procedure

It must be emphasised that the MPS review process is taking place within the framework of the University’s guidelines for structures and reviews. These ensure that a fair process takes place, with full participation of trade union representatives where appropriate.

4. Implication of change for individuals

4.1 Long timescale of uncertainty

Because the review is tied up with an OJEC tender process, the timescale for the process is long. The uncertainly and anxiety that accompany any review process where staff fell their roles may be under threat is recognised.

The OJEC process is a formal, public process, and there is no question of trying to hide the fact that such a process is taking place from MPS staff. Instead the decision has been made to inform MPS staff at the outset what is taking place in as open a manner as possible.

4.2 Job security issues

The possible outcomes of the review cover the widest possible spectrum, from minor changes with little impact on staff at one extreme to closure of parts of MPS at the other. Clearly the closing down of parts of MPS has a large impact upon staff.

The University is a large organisation that values the loyalty and professionalism of its staff. If it turns out that some aspects of MPS activities close at some time in the future, the University will do everything it can to avoid any staff leaving the institution. This might mean in some circumstances that staff will be presented with attractive opportunities for retraining in areas related to their current work.

It is also accepted that any move towards shift working, should it be decided upon, may impact upon particular staff. The University will do everything it reasonably can to work around such problems.

Any decisions made as a result of the review will be phased in over a period, to ensure that transitions are made with the minimum of stress and disruption.

5. Information on the consultation process

5.1 Current situation

A number of MPS staff have already realised that something not prescribed by the ordinary is taking place. Whist many HECA photocopiers have already been installed in departments, similar machines that were due to be installed in the central print rooms have not arrived. Maintenance contracts on several existing central machines are about to expire. Up to this point, staff have not been given a clear explanation of the reason for these delays. It is felt that it is not reasonable or credible to keep appropriate information from staff any longer.

5.2 Initial schedule of meetings

It is proposed that all staff are informed of the review during the week beginning 1 October 2001, according to a planned schedule. The Media Production Services Manager will be present at all meetings with staff. The Head of Customer Services will attend all meetings at the smaller campuses. The Head of Information & Communication Systems will attend the meeting in Kirkby Terrace.

5.3 Ongoing dialogue

Following these initial meetings, a schedule of further meetings with be drawn up according to the wishes of staff and advice from Personnel. It is essential that staff are kept properly informed of the progress of the review during what will be a lengthy process.

Dr Phil Richards

Head of Information & Communication Systems

30 September 2001

Initial response and observations by UNISON  (answers provided by Phil Richards at the 25th October meeting shown in red)

The figure of �300k was given by the Chancellery of the University, as the ILS contribution to the wider saving that the University is required to make.  The decision to allocate �100k of savings to ICS was made by the ILS Management Team (ILSMT). This was on the basis of allocating savings to be made roughly in proportion to existing budgets. The consequences of not meeting the targets are not known at this time.

ILSMT is due to meet with the DVC(RD) on 30 October 2001 to discuss in more detail the nature of the wider review.

The current MPS cost is 1.5p per click.  For most University work, this sum is exempt from VAT.  This is the same at all campuses, as part of a centrally managed service.  Direct feedback from departmental staff, corroborated by volume of requests for new HECA machines, is evidence that departments regard HECA as good news.  Workloads within departmental offices is a matter for departments, and is therefore outside the direct scope of this review.   However, we do wish to make the central charge for copying as attractive as possible, so as much volume as possible is put through the central service.

Departments can already go commercial with their copying, if they so chose.  There is no compunction on them to use the central service.  One of the aims of the review is to examine whether it is possible for the central MPS service to compete with the new HECA rates.  We do not know whether we can achieve this at this stage of the review.  I would speculate that the departments would choose to use their HECA machines rather than a more expensive hypothetical outsourced option.  This would be a choice for departments, and my understanding is that there would be no way for the University to force departments to use a hypothetical outsourced option.

At this stage, we are considering inviting Devon Audit Services to undertake an analysis of our current levels of service, and of the needs of our users, which is at the root of the above questions.  UNISON input into the precise remit for this analysis would be welcomed. The entire review process will be transparent.

The academic body, as users, will be consulted by Devon Audit Services in a matter [manner?] to be determined as part of of the review process.   One example of a possible way of improving efficiency, which has not been employed in MPS, is increasing utilisation of expensive hardware by a shift working approach.   The University regards itself as a public service whore core business is teaching and research.

Staff will be fully consulted at every stage in the review process, including that cited above with respect to shift working.  It is too early a stage in the process to talk about hypothetical consequences - as part of a genuinely open process there cannot be a pre-defined answer to this question at this early stage.  If shift working allows MPS to better the HECA rate, this would not mark the end of the review; the market testing element of the review would still take place.

The devising of procedures for assuring that service levels will be met is likely to comprise an important part of the review process.  Escalation procedures leading to remedial actions are likely will [to] be devised as appropriate via discussion during the review.

It is too early to give a specific answer to the work continuity question, though this is certainly an issue that we would wish to pursue with any potential commercial partner should the review lead us in that direction.  Examples of ways that a partnership might benefit both parties are:

• using volume production machines for as long as possible can reduce unit costs;
• external work can bring in income to subsidise University charges;
• new services, not currently available, might be offered under a partnership.

The decision to proceed with the OJEC tender was taken by the DVC(RD), on advice from the University Procurement Unit.   Any partnership with a commercial organisation, which might benefit all parties, could only arise via a formal tender process.  Input into the contents of the tender document will be invited as part of the review process, subject to the legal constraints that surround any formal tender process. The Procurement Unit will advise on such constraints in due course.

The tender process has not yet begun, and the tender document has not yet been prepared.  The Procurement Unit will advise on the journal in which the tender will be placed in due course.

University financial procedures require tender decisions to be made in a transparent way.

It was probably not the ideal wording, but for example, steps 1,2 and 3 of Restructures and Reviews - Guidelines for Managers require a draft document to be agreed with the personnel Advisor, none of which involve Union input.  Therefore there are certain stages of the review where Union participation is not required.  This was all that was implied by the phrase in question.

The University will seek to minimise staff anxiety by involving staff at every stage of the review process, including an away day during which staff will be invited to contribute their own ideas to the review.

It is too early in the review process to be specific about other possible opportunities for staff.  Such opportunities will become clearer in due course, and may involve upgrading.

As part of the consultation process of this review, a mutually acceptable outcome between staff and employer will be sought, which meets the business needs of the institution and the employees' own needs.

It is difficult at this stage of the review to be precise about the timing of implementation of outcomes of the review, other than to say it will not be sudden.  It will be part of the consultation process of the review to discuss a possible timetable and phasing.

16^th October 2001

Additional Questions/Observations from Kathy Clark, SW Regional Officer

1.2 What is the purpose of the other reviews, are they cost cutting exercises too?

1.4 Has anyone ascertained why departments are installing their own machines rather than using MPS?  Is it cost/convenience/efficiency?  Obviously if it is not cost, then no matter what cuts you make, they will not use the services of MPS.

3.6 Rather than asking when it would be considered appropriate, I would inform them that they should keep UNISON fully appraised of every stage.

16th October 2001

MPS Meeting 25^th October 2001

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The meetings were called to update staff on the current review and to brief them on the new VAT regulation implications and how this might affect the review.

Phil outlined the progress of the review so far and the latest development that had refocused the priorities of the review. New VAT regulations placed MPS at a financial disadvantage which had to be addressed. Some concern was expressed about the dates surrounding the knowledge of the VAT information. UNISON drew attention to the delay in advising of the changes that placed MPS and effectively ILS under a potentially higher VAT burden. Phil recognised that the delay in receiving the information to be included at an early part of the review or even earlier was unfortunate and responded by saying that this would be taken up at a higher level within the University.

Three options were to be considered as a way to resolve the VAT issue. Phil highlighted the pros and cons of each option. The first two options either entailed significant increase in print prices or losing the former self-supplier VAT advantages.

The third option would be to create a trading company within the already established University of Plymouth Trading Company (UPTC). This would allow parts of MPS currently caught by the new VAT regulations to remain free of the new self-supply rules. The remaining part of MPS would not be affected. Phil and Francis discussed other potential benefits that the move to trading company status could allow with an independent financial status. The implications for staff would in practice be minimal as they would remain with the employ of the University of Plymouth and maintain all existing terms and conditions.

However, the reprographic/copying section of MPS could only be eligible for trading company status within UPTC if it had a sound financial basis. As the University effectively subsidises that part of MPS, savings to offset the subsidy in reprographics and copying would have to be made.

It is proposed that independent surveys are undertaken by Devon Audit Services and an appointed accountant to determine how costs might be recovered against the levels of service required by the institution taking account of all sites requirements. These surveys will probably begin in the New Year.

The implications of this was discussed with staff at all sites and a number of positive suggestions were made by staff to promote, enhance and even expand the current service in order to make it financially sound and attractive. The discussions at all sites revealed the commitment of staff to fulfil reprographic and copying requirements and how this service is highly valued at each location. Some detailed points were raised and in particular the potential ability of the units to attract work from outside. A proper vision of what the service ought or could offer would also be very welcome.

The potential for creating a professional and successful copying service that may actively compete for outside work was deemed to be high among staff and it was agreed that this factor should be fully considered when the independent surveys are undertaken.

The possible successful move to a trading company under UPTC may represent a significant market test that could fulfil a number of requirements of the review.

The potential disparity of competing with the HECA ‘click’ cost was also discussed. It was felt that a possible redirection of cost increase onto specialist services within MPS could help to reduce central ‘click’ costs that could be attractive for internal bulk work enabling print volumes to increase within MPS.

Staff were requested to keep a record of their work associated with copying and printing with regard to MPS tasks, that would be used as data in the independent surveys.