Higher education – sector in financial crisis

Globally, there are approximately 20,000 accredited Higher Education Institutions (HEIs) including universities, colleges, polytechnics etc. recognised by the UNESCO-backed Higher Education Database (i).  Given the sheer number of HEIs around the globe, mergers among universities and colleges are relatively rare, but not unheard of. In Australia, this may well change.

In 2020, half of the 30 universities who have reported their financial positions for 2020 are reporting an operating deficit, in 2019 it was three (ii).  The sector finds itself in an age of “new” financial challenges brought about by the pandemic and shifts in the international market, on top of the “old” financial challenges largely brought about by cross-subsidisation of research and hefty fixed costs, and more recently, funding pressures on teaching brought about by the jobs-ready graduate package.  As a result, we may well see shifts in the higher education landscape, with governing bodies running out of areas to cut, one might expect an increasing number to be looking at their options for merger, in the not-too-distant future.

In this vein, I have taken a quick stocktake of the state of HEI mergers across the western world. It is not an exhaustive review, but a glance at what is currently known, at least publicly (and largely from media reporting).

HEI mergers – a global state of affairs

In Europe, there were 129 HEI mergers reported for the period 2000-2019; 27 which involved four or more institutions, 23 with three or more, and 79 involving two institutions. Interestingly, 62 mergers involved two different types of institution (eg a university and a specialist institution); 40 were identified as “homogenous mergers” ie same status, and 27 were mergers or clusters between three or more types of institutions (iii). The majority of multi-lateral mergers occurred in France, as a result of a 2013 law requiring universities to “group” themselves into wider communities of practice (iv).

In North America, State-based HEI systems are commonplace, creating networks of both universities and community colleges; the former providing higher degree programs and the latter technical training.

There is a live example of a proposal to create a new HEI system being driven by the State of New Hampshire. The proposal was floated in 2019 by Governor Sununu, who asked the leadership of the University System and the Community College System to meet to discuss the possibility of combining their structures. Currently the University system includes four institutions that serve just over 20,000 students, the Community College system includes seven colleges and serves about 26,000 students.  Talks between the systems’ leadership have been cautious, with an eye on mistakes other states have made (v). The merger is expected to realise cost savings to the State and expand opportunities for students at two- and four-year colleges to transfer between institutions. The Governor has committed that each university and college would maintain their own campus, and their own brand. The change, in his view, will avoid “each separate campus wasting time and money and frankly just competing with each other…” (vi).  While the proposed merger of the Boards of the College and University systems was flagged for July this year, no formal announcement has been made in relation to their combined future.

Other “live” merger discussions in the United States include Philadelphia’s St Joseph’s University and the University of the Sciences (the financial position of the latter has been downgraded by ratings agencies) (vii) and the consolidation of the University of Wisconsin System with the Wisconsin Technical College System (viii).

In the United Kingdom, growing financial pressures caused by the pandemic, have been met by Universities UK, the lobby group for all UK universities, calling on the government to create a transformation fund “…to support universities over the next two to three years to reshape and consolidate through federations and partnerships, or potentially merge” (ix). The Government has responded by establishing a Higher Education Restructuring Regime, with an advisory Board assessing restructuring proposals from English HEI providers who are at risk of insolvency, to determine the terms and conditions of any financial support (x).

In both the UK and Australia, HEI mergers have been largely unheard of since the sweeping sector reforms of the end of the last century. In the UK, local authority colleges merged to create polytechnics and then became universities; and in Australia, the Dawkins reforms heralded the merging of Colleges of Advanced Education and Technical Colleges, to create a new generation of universities.

Since this period, only a handful of HEIs have successfully merged in the UK, the most notable success being the Manchester merger (more on this later). Other mergers were explored, including Imperial College and University College London (UCL) (xi) Birmingham and Aston universities (where threshold issues included the name, academic complementarities, comparability of research performances and leadership, among others (xii) and Aberdeen University and Robert Gordon University (xiii), but these were all abandoned at an early stage.

A notable attempt at merger is observed in Wales, where the then Welsh Education Minister’s vision to merge three universities in 2012, the University of Glamorgan, Newport University and Cardiff Metropolitan (with threats of use of legislative power if necessary (xiv) was scuttled by the Board of Cardiff Metropolitan in 2012 (xv) which voted to keep their constitution intact and go it alone with an eye on top 10 status in the UK. The former two universities did merge, to create the University of South Wales. Cardiff Metropolitan University has not yet made the UK top 10.

In Australia, post-Dawkins merger discussions have been rare and State and Federal Governments have been relatively silent on the matter. Of course, Federation University was established out of a merger between the University of Ballarat and Monash University’s Gippsland Campus in 2013 (not a full-scale institution and institution merger) and there were various discussions in Western Australia about creating groupings of two and three between Curtin University, Murdoch University and Edith Cowan University (xvi).

In South Australia, there is a perennial merger exploration, most recently between the University of Adelaide and the University of South Australia in 2018 (disclosure, I was the Chief Executive, External Relations at the University of Adelaide for the last round of negotiations) which failed when governing bodies were unable to overcome threshold issues and strategic risks) (xvii).

The Manchester Merger

In part two of this series, I take a closer look at the successful merger of The Victoria University of Manchester (Victoria University) and the Manchester Institute of Science and Technology (UMIST) in 2004 with Alan Ferns, the outgoing Associate Vice-President External Relations and Reputation at the University of Manchester. Alan was Head of Public Relations at Victoria University and played a key role at the helm of communications and branding strategy for the successful merger. While the Manchester merger occurred 17 years ago, it provides a case study that universities in Australia and abroad might look at, should they be considering a strategic alignment or merger with another HEI

Inga Davis, is Principal, Research Strategies Australia


(i) International Association of Universities, World Higher Education Database, accessed 22 June 2021.

(ii) Hare, J, Unis in unchartered territory of slow-burn crisis, The Australian Financial Review, accessed 16 July 2021.

(iii) European University Association,  “EUA Briefing University Mergers in Europe”, April 2019, accessed 22 June 2021.

(iv) Ibid.

(v) Inside Higher Ed, “New Hampshire Merger Proposal Takes Shape”, accessed 22 June 2021.

(vi) Nietzel, M, “University merger talks on the rise”, Feb 2021, Forbes, accessed 22 June 2021.

(vii) Ibid.

(viii) Meyerhofer, K, “UW System looking at consolidation between UW branch campuses, technical colleges”, Feb 2021, Wisconsin State Journal, accessed 22 June 2021.

(ix) Universities UK, “Achieving stability in the higher education sector following COVID-19”, April 2020, accessed 28 June 2021.

(x) Department for Education, “Establishment of a Higher Education Restructuring Regime in Response to COVID-19”, July 2020, accessed 26 July 2021.

(xi) MacLeod, D, “Opposition ends Imperial and UCL merger dream”, The Guardian, 19 Nov 22, accessed 22 June 2021.

(xii) Higher Education Policy Institute, “Case Study 3: Aston University and the University of Birmingham”, no date, accessed 19 July 2021

(xiii) University of Aberdeen, “Minutes of the meeting held on 20 November 2002”, Senatus Academicus, 20 November 2002, accessed 19 July 2021.

(xiv) Kernohoan, D, “Merging universities forcibly: a Cooke and Bull Story”, WONKHE, May 2020, accessed 28 June 2021.

(xv) BBC News, “University mergers: Cardiff Met board in stand alone vote”, July 2012, accessed 28 June 2021.

(xvi) Turner, M & Brown, A, “Time for a Western Australian ‘Group of Three’?: A speculative essay”, Australian Universities Review, vol. 57, no. 1, 2015, accessed 12 July 2021.

(xvii) The University of Adelaide Newsroom, “University merger discussions come to an end”, The University of Adelaide, October 2018, accessed 7 July 2021.



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