DENNIS Not entirely sure what you are asking here, please can you give me a little more information.

I though an institution can come up with a percentage which is acceptable and also impower the tutors to work out the semilaries for originality improvement

Different schools, different policy there is no UNIVERSALLY ACCEPTED similarity index.  

In some universities, they penalize students who >70% similarity but in the University where I am employed we allow 15% similarity while university does it at 10%.  I tend to subscribe to turn-it-in's dictum that the best way to "deter plagiarism is turn plagiarism into teachable moments."

We don't even have an institutional policy. It's typically at the department level but even that isn't consistent.

I argue strongly against a "magic number" rather the student & marker should look at what is similar. (note: Similar NOT plagiarised) For example, you may have a lot of frequently used phrases (e.g. discussing how a survey was carried out - there are only so many ways of describing it). 
If a student has 30% of their essay made up of those sort of phrases - e.g . lots of <2% similar fragments), then that's probably a very different scenario from a student who's got 20% similar  which is made of up 1 whole page identical to another source in a 5 page essay. 

However, what if there's a 2% similar chunk - but that 2% is the conclusion of an essay - and on reading, the marker realises they found a great conclusion - so wrote the essay to fit ...