Moving from Vertical Integration of Services to Privatization

Garrett and Poole (2006) agree that one contributor to the cost disease in higher education at many institutions is the vertical alignment in regard to services offered to students, faculty, and staff.  College and universities are responsible for providing education, but many also are responsible for in-house operating of food service, facilities maintenance and cleaning, housing, and management of records (Garrett & Poole, 2006).

These services are necessary on college and university campuses and contribute to providing a successful learning environment for students.  When all of these services are operated in-house by the University, it may be hard to pinpoint exactly how much each service is costing the institution.  Paying individual staff members and providing benefits may be accounted for in multiple areas of the institutional budgets.  Garrett and Poole (2006) encourage institutions to consider outsourcing these services.  When companies and institutions have contractual agreements, costs are spelled out on the front end, and it makes it easier to account for exactly how much these services are costing the institution.  As a result, funds can be earmarked for specific services with little worry that the cost may be greater than what is allotted in budgets (Garrett & Poole, 2006).

Reference

Garrett, T. A. & Poole, W. (2006).  Stop paying more for less: Ways to boost productivity in higher education.  The Regional Economist.  Retrieved from http://www.immagic.com/eLibrary/ARCHIVES/GENERAL/US_FRS/F060100G.pdf