Think big and move for more mergers

Why are there so many universities in the United Kingdom? By this question I do not mean to imply that there are too many students, as some commentators claim. On the contrary, I have argued for some time in these pages, and elsewhere, that the UK has too few students and the participation rate should be allowed to increase to that of our main economic competitors - circa 40 per cent.

My opening question refers to the size of individual UK universities (and a number of London University colleges). Of a hundred or so universities and the university of London colleges which are members of CVCP, there are a number with fewer than 5,000 students, almost a third with 5-10,000 students, another third with 10-15,000 students, about a quarter with 15-20,000 students and just a few with more than 20,000 students.

This is in stark contrast to many other developed countries with which comparison seems reasonable - the United States, Canada, Australia, Germany, France and Japan. A quick scan of university student numbers in those countries shows many universities exceeding 20,000 students, and that it is not uncommon to find universities with 30,000, 40,000 and even 50,000 students.

The problem is that each self-standing UK university has to provide a wide range of central services for its students and staff. These services include personnel, payroll, finance, publicity and public relations, international office, child-care, and many others. They all have to be staffed and range from large departments with perhaps 50 or so staff, down to small units with only two or three staff. Central services account for around 40 per cent of a university's total expenditure. With total university turnover of all CVCP members estimated at Pounds 10 billion, we are looking at a total cost to the sector of these central services of about Pounds 4 billion.

Do all 100 universities need to provide all these services? Well, the answer is that they do if they are self-standing. If, however, two universities get together there are clearly substantial savings to be made. For example, from two universities each with a Pounds 100 million turnover, and therefore with about Pounds 80 million a year going towards central services, we might expect savings of at least a third of their combined total, say Pounds 26 million. But this could only be achieved if there was a total integration of the two institutions, that is a "merger".

But here we are at the end of the 20th century, in a state of financial crisis, facing the certainty that no government will put more total resources into higher education and yet with a desire to expand student numbers. We have a large number of fairly small institutions each having to carry a heavy burden in terms of overheads. A solution that would free up substantial resources - institutional merger - is staring us in the face and, so far, it has not been raised in public. It is the policy whose name no one dares speak.

Prime contenders for merger would clearly be those institutions in the same place. In some cities two universities are separated by a hedge (Hull and Humberside) or a road (Leeds Metropolitan and Leeds). There are four universities in Manchester (only one of them, Manchester Metropolitan, of an internationally respectable size - with 30,000 students). There are pairs of universities in or close to many other cities - Birmingham, Brighton, Bristol, Cambridge, Coventry, Edinburgh, Glasgow, Lancaster, Liverpool, Nottingham, Oxford, and so on, and many more within 20 or so miles of each other. There is also a substantial number of London colleges and universities in and around London - eight London University colleges large enough to be members of CVCP (but nevertheless all, except two, are relatively small) and 12 universities which are not part of London University. Many pairings would still only create institutions at the 20-30,000 level - not large by international standards.

Supposing one third of UK universities were to be merged? Let us assume savings of a third are achieved. Using average figures for all universities, savings of up to Pounds 450 million per year could be achieved. This is a huge sum of money and would make an enormous difference to the financial position of those universities.

Over time it is probable that savings greater than one third of the current levels of expenditure on central services could be achieved.

Efforts to merge universities have been unsuccessful because of staff resistance. It is time to reconsider. It is also time universities stopped sitting back, waiting for a white knight, in the shape of a new government, to provide extra funds.

Talk of greater collaboration is, of course, good sense, but the economies achieved are likely to be small in absolute terms and very small compared to savings achievable by merger. Collaboration is only tinkering. Merger is a more radical solution and no other policy could achieve such savings.

Frank Gould is vice chancellor of the University of East London.