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Irrational for UCT to ban outsourcing: Economist

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The University of Cape Town (UCT) could find itself incurring more costs following its “irrational” banishing of outsourcing, according to an economist.

This week the university committed to doing away with outsourcing of services, including cleaning and security, after two weeks of protests by students and workers.

Economist Chris Hart said on Friday the university’s costs for insourcing would include pension benefits, medical aid and insurance.

He said outsourcing was sometimes about getting specialised expertise, especially when it came to security.

“It is irrational to say you can’t have any outsourcing, but cleaning staff can be insourced. As long as you make sure you are not insourcing to cut costs and salaries. That’s where indignity comes in.”

Hart said a move from outsourcing always resulted in fewer jobs and there were always people left out in the cold.

He said the insourcing costs were not always black and white and had to be viewed in terms of how it added value.

Besides job losses, outsourcing sometimes resulted in higher costs and less efficiency, Hart said.

“I’m not necessarily saying it will lead to a reduction in efficiency, but we have seen instances where that has happened. Eskom is an example of where you have insourcing and a huge acceleration in cost and UCT might find itself in the same situation.”

On Friday October 23, President Jacob Zuma announced a 0% fee increase for universities in 2016. This came after days of protests by students countrywide.

Since the announcement, UCT has been on a drive for funds.

On Thursday, UCT Vice Chancellor Max Price told the reporters some wealthier parents had offered to pay the fee increase in a bid to ensure poorer students had access to higher education.

“We’ve been really happy to receive offers, many from the parents and families of wealthier students who understand the problems of funding higher education, who acknowledge they can afford the fees we charge.

“They are saying they are willing to pay the increases to ensure other people have better access and the quality of education we offer at UCT is preserved.” News24

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