The term "deja vu all over again" may be a famous US sporting quotation, but that is exactly the feeling within the upper echelons of higher education in Wales at the moment as talk of consolidation and mergers permeates the senior common rooms of Welsh universities.
Take, for example, this article from the Guardian in 2000 looked very carefully at the scenario developing in Wales at that time.
A decade later, we now have a Minister for Education in Wales who is still carrying the torch for mergers, but in a far more forceful way than his predecessors.
A decade later, we now have a Minister for Education in Wales who is still carrying the torch for mergers, but in a far more forceful way than his predecessors.
The interesting aspect is whether the advice being given at the time by the top civil servant in the Department of Education still holds true in the Assembly Government today namely "They are independent institutions - we can't make them do things." Given the speeches emanating from DCELLS over the last few months, probably not!
Of course, Wales is not the only part of the UK to look at mergers as a way of increasing efficiency within higher education.
The University of Manchester and the University of Manchester Institute of Science and Technology (UMIST) formally merged in 2003 to become the largest university in the UK. However, the merger was generally supported by both institutions and funded by £65 million of extra funding secured from government and regional bodies, money that is now probably not available from the Higher Education Funding Council in Wales (HEFCW) or the Welsh Assembly Government for the 3-4 mergers that may be on the cards. In fact, this paper on the process in Manchester may have important lessons for any potential mergers in Wales and I sincerely hope that advice is currently being taken from those who, at the time, put together a very difficult marriage in the North West of England.
A year earlier, there had also been talk in the air about a potential merger between UCL and Imperial to create an academic powerhouse in London and there was much debate about this move amongst commentators in the sector. One of the most coherent notes on the subject was that produced for the Independent by the Oxford academic Alan Ryan who suggested that bigger universities did not necessarily mean better universities. As he wrote back in 2002:
"How big are the best American universities? Harvard has 6,500 undergraduates, Princeton 5,000, Stanford 6,600; Oxford 11,000, ditto Cambridge, ditto UCL. Imperial looks much the same size as Harvard, with 6,700 undergraduates and 2,700 graduates, although Harvard is overall much bigger than Imperial – its professional schools in law, education, business, government, medicine and dentistry add another 6,000 students....The best undergraduate teaching in the US is at places like Williams College – where there are 2,000 undergraduates and a devoted faculty. Williams has an endowment of £900m, and charges £17,000 a year in fees; so does Stanford, with £6bn in the endowment and a £1.2bn turnover.
Alan Ryan's argument that size is not related to academic excellence still holds true today.
Harvard - the best university in the World - currently has 6,700 undergraduates (Harvard College) and 14,500 graduate and professional students. The second best university - Caltech - enrolls approximately 950 undergraduate and 1,200 graduate students and employs about 300 professorial faculty. MIT, third on the world list, enrolled 4,232 undergraduates and 6,152 graduate students for 2009–2010. Of course, all three (and Stanford and Princeton) are private universities but the point remains valid in the context of "big is beautiful". Indeed, a large number of my colleagues in Cardiff University still bemoan the fact that a top ten research position was sacrificed on the corporate altar of getting a medical school (University of Wales College of Medicine) and, as a result, membership of the Russell Group. As a report in the Times Higher back in 2009 noted "The University of Cardiff insists that there is a simple explanation for its slide down the Times Higher Education Table of Excellence - its merger with the University of Wales College of Medicine in 2004. This year's rankings, a spokesman said, simply did not compare "like with like". The University of Wales College of Medicine was 48th in the table at the time of the 2001 RAE. If the two institutions had been combined back then, "we would, we believe, have been 22nd - exactly the same position as we are now in the table in 2008", the spokesman said."
Therefore, it may be difficult to argue that mergers will necessarily lead to better universities in Wales, as other forms of collaboration (such as joint research centres) could have the same result.
Another point being made about the potential Welsh HE merger is in relation to access. i.e. that mergers will open up greater opportunities to those from deprived backgrounds. However, I came across a fascinating article that highlighted a study showing that students from disadvantaged backgrounds and those entering higher education from state schools are less likely to drop out if they are studying in a small university or college.
GuildHE – the body representing these smaller institutions - has argued that the more intimate and supportive environment of smaller universities and colleges such as those represented by is better suited to students from disadvantaged backgrounds and those who may be first in their family to enter higher education. The level of support provided makes these students less likely to drop out than they would be if studying in a larger institution.
GuildHE – the body representing these smaller institutions - has argued that the more intimate and supportive environment of smaller universities and colleges such as those represented by is better suited to students from disadvantaged backgrounds and those who may be first in their family to enter higher education. The level of support provided makes these students less likely to drop out than they would be if studying in a larger institution.
So is there a case for mergers within higher education in Wales?
To date, much of the arguments have been about political imperatives rather than on securing a structure that is best for the future of the Welsh university sector.
Fortunately for the Assembly Government, the accountancy group PWC has only recently developed a position paper that examines the merger debate in Higher Education. According to the company, mergers tend not to be popular within the HE sector because they:
- have usually occurred in response to crisis, and not in pursuit of the strategic prize that might be available
- are often associated with a loss of institutional identity and there may be a perceived trade-off between the greater scale that comes with merging, and the pursuit of the core institutional mission
- are complex, difficult to plan and execute successfully and there have historically been relatively few large scale mergers among universities and therefore inevitably the knowledge that resides within the sector is limited.
Indeed, PWC do offer a number of options for HEIs to work more closely together (see below) and these range from informal collaboration to full merger.
One could ask whether any of these models might work just as effectively for the Welsh HE sector and, more relevantly, whether any studies have been undertaken by HEFCW to examine all the strategic options.
Fortunately for those wanting greater change, the paper does present a clear roadmap for higher education mergers, describing the potential benefits to universities that go through the process. These include:
- Securing cost efficiency - The economies of scale achievable from combined functions, adoption of common processes, and the removal of duplication within back office administrative functions. For example, property and infrastructure efficiencies; synergies from subject/module analysis, which eliminates duplication; lower stakeholder engagement costs across for example the HE sector, public sector providers and student services; andr educed management costs, including lower costs associated with executive team and governance arrangements.
- Optimising scale of operation - Seeking size and scale may be another factor that underpins merger initiatives in the current environment. In the context of a merger, size and scale may be aimed at gaining scale in specific elements of an organisation’s operations and using these elements to increase competitiveness and might include breadth of subject teaching offering; geographic spread of operations; and research strength and depth.
- Brand leverage - Benefits may be achievable around brand and particularly the greater leverage of brand for the legacy organisations. For example, association with a stronger more established brand may improve market positioning and unlock benefits in terms of attractiveness to students.
Of course, these are all business benefits for the institutions and, as such, it must be up to the individual organisations to determine whether a merger will give the new organisation a competitive advantage in the marketplace.
Perhaps the most important lesson from the PWC paper is that mergers simply cannot happen overnight in response to political imperatives alone.
Over the decades, research has consistently shown that a majority of mergers and acquisitions in the corporate world are considered unsatisfactory by their stakeholders, are outright failures, or fail to match the companies’ previous organic performance. The record in the public sector is no better. The National Audit Office reported earlier this year that over 90 reorganisations including mergers, have taken place in government. The report concluded that given the lack of a co-ordinated and rigorous approach, the success rates for public sector mergers is very low.
Over the decades, research has consistently shown that a majority of mergers and acquisitions in the corporate world are considered unsatisfactory by their stakeholders, are outright failures, or fail to match the companies’ previous organic performance. The record in the public sector is no better. The National Audit Office reported earlier this year that over 90 reorganisations including mergers, have taken place in government. The report concluded that given the lack of a co-ordinated and rigorous approach, the success rates for public sector mergers is very low.
Therefore, planning is critical and if mergers are to occur within the Welsh Higher Education sector, they must be carefully planned. In particular, determining a clear strategic rationale is especially important in the context of the HE landscape due to the diverse forms and functions of institutions and the differing levels of underlying performance.
Whilst mergers may an easy option in terms of political imperatives for higher education in Wales, the actual implementation may be much harder to achieve, especially if there is uncertainty over the actual business case for such mergers, which has yet to be properly made by the Welsh Assembly Government.
As the merger of Manchester University and UMIST has demonstrated, mergers can be undertaken successfully within Higher Education in the UK but the question remains whether that was the exception rather than the norm. The Manchester merger was also driven by the institutions themselves rather than any political pressures. Indeed, the "big is beautiful" argument has yet to be coherently made by anyone within higher education in Wales or, for that matter, by anyone in Government.
The main message for university mergers in Wales is that it simply won't happen overnight. Indeed, there will be an enormous amount of planning that needs to take place if they are to happen, it may disrupt the higher education system in Wales for years to come and, more importantly, there is no guarantee of any success at the end of the process.
If this process is to take place in Wales, then all the evidence from the PWC study shows that considerable time and effort is needed for merger planning, execution and then post merger integration. When two universities merge, then strategic intent, culture, leadership, governance, academic reputation, people and communications will be as crucial as cost synergies, technology and infrastructure support. And even if all that is achievable, can such factors be executed without sufficient funding resources to "oil the deal"?
If this process is to take place in Wales, then all the evidence from the PWC study shows that considerable time and effort is needed for merger planning, execution and then post merger integration. When two universities merge, then strategic intent, culture, leadership, governance, academic reputation, people and communications will be as crucial as cost synergies, technology and infrastructure support. And even if all that is achievable, can such factors be executed without sufficient funding resources to "oil the deal"?
To date, none of these issues have been discussed in the political arena but if mergers are the only feasible option available to the university sector in Wales, then they are all issues that must be taken seriously by all the stakeholders in Welsh higher education, especially the Assembly Government.
