This blog was kindly authored by Professor Sir Chris Husbands, Director of Higher Futures and a HEPI Trustee. He was previously the Vice-Chancellor of Sheffield Hallam University.
When the Times Higher Education considered those who had shaped higher education in 2025, it gave top billing to Jane Harrington, Vice-Chancellor of the University of Greenwich. And understandably so: along with Georgina Randsley de Moura, the Kent vice-chancellor, Jane is leading the merger of Greenwich and Kent to form what will be the UK’s first multi-university group. The new entity won’t necessarily stop at two universities, since it has been set up explicitly to incorporate others later. None of this should be a surprise. English universities continue to face severe challenges. The most recent OfS assessment is downbeat about the sector’s financial prospects. The October 2025 Post-16 white paper proposal to raise tuition fees in line with inflation has not really alleviated the problems: the measure to be used for indexation has not been identified, and for many institutions, that makes a significant difference. Moreover, indexation begins from a fee level which has been eroded in real terms over the last thirteen years. The real-terms value of the base unit of resource for indexation is roughly the same as it was in 1998 when top-up fees were first introduced. And thirdly, what the White Paper gives with one hand – fee indexation – it takes away with another in the form of the international student levy. The challenges remain.
The White Paper envisages consolidation as one solution, asking ‘institutions to share resources and infrastructure, minimising duplication of effort’. It wants ‘more consolidation and formal collaboration in the sector, with the result that institutions will be stronger and more financially sustainable.’ The Greenwich-Kent announcement followed a flurry of interest in what KPMG and Mills called ‘radical efficiency’ measures from shared services to deeper collaboration to full merger. The expectation is that the future of English higher education involves fewer institutions, greater specialisation and more consolidation.
The higher education rumour mill has been spinning: a takeover here, a new group there, a university supposedly absorbing an further education college, a Russell Group member considering merger with its modern neighbour, all of them involving, as a long-running soap opera once put it, ‘neighbours becoming [more than] good friends.’ But repeatedly, rumours are either ill-founded or conversations collapse. Of course, mergers are difficult – and I should know, as I’ve led two of them, merging two higher education institutions and two sector agencies. But given the scale of the challenges, the surprise is that more has not happened. Understanding why this is may be one route to unlocking wider cultural change across the sector.
Consolidation has been slow for several possible reasons. One, which could date this comment quickly, is that institutions may have been waiting for the White Paper to see the government’s intentions. With the White Paper out, activity may speed up. But this seems unlikely. Although the government’s aspirations for consolidation and specialisation are clear, it offers weak change mechanisms. A reshaping of research funding is the clearest policy shift, but there are few other measures to drive ‘consolidation and formal collaboration’. There’s no transformation fund, no new policy levers, no active market-shaping.
Other reasons seem more compelling. One is the embedded culture of leadership and governance. Hyper-competitiveness has driven a robustly independent leadership culture, which means few leaders are well-attuned to the way to make collaboration work effectively. Boards are cautious. Universities have a range of governance forms; some are chartered, some are higher education corporations, and more recent foundations have other forms. The overwhelming majority have charitable status, with a board of governors owing fiduciary responsibilities to their own institution. In most cases, governors assume that their responsibility is to ensure that the university survives its current form, perhaps especially when the university bears the name of the place in which it is located: local pride matters. In fact, the responsibility of leaders and governors is to realise the objects of the charity, but the inclination to see their duty as being to the university rather than its objects is a barrier to change.
A second explanation lies in regulation. The Office for Students’ new Strategy commits it to being collaborative, and it has said that it will not erect unnecessary barriers to consolidation. But the detail is complicated. Mergers between (say) stronger and weaker institutions may nevertheless create concerns about student outcomes (the OfS B3 conditions), whilst mergers between two struggling institutions are more likely to be problematic for B3 conditions. Without regulatory bridging arrangements, the worry – perhaps especially amongst cautious lawyers advising institutions – is that a merger brings regulatory risk. And the OfS is not the only regulator. Chartered institutions require Privy Council approval for governance changes. Cross-sector ‘vertical’ mergers, such as between higher education and further education institutions, which have potential in a more ‘tertiary’ world, involve overlapping and different regulatory regimes. Charity Commission approval is another potential hurdle
Thirdly, there is a difference between mergers in for-profit and not-for-profit organisations. In the commercial world, mergers are almost always designed to increase shareholder return. The merger unlocks additional investment, capabilities, assets or routes to market expansion, which means higher financial returns. Even where a successful company takes on distressed assets, there are gains to be realised through intellectual property rights or the value in the distressed company’s assets. The initial costs of the merger – digital and management systems, restructuring – can either be met from reserves and the gains realised later, or by raising equity. Although universities are formally private sector institutions, in this respect, they resemble public institutions: they are not-for-profit and have charitable objectives. In other parts of the public sector, for example, further education colleges or academy trusts, mergers are often forced by the FE Commissioner or the Regional Schools Commissioner. Some public investment is often made available to handle transition costs – essentially performing the function of the financial markets in private sector mergers.
If this analysis is right, it helps to explain why, despite the challenges, cultural, financial and regulatory concerns are slowing the radical changes– continue the pop culture references here and quote the Spice Girls – ‘when two become one.’ Understandably, universities believe that they need to solve their problems through some combination of restructuring, asset disposal, workforce reform or portfolio reshaping. Of course, mergers can happen, and given the combination of the push of financial pressures and the pull of a new policy framework, 2026 may unlock more activity in both vertical (HE/FE) and horizontal (HE/HE) mergers. But we shouldn’t hold our breath.
The government could almost certainly have accelerated structural change through some sort of transformation fund. In the absence of that, others may bide their time and watch the Greenwich/Kent experience. It would be a missed opportunity if that is all they do.
Mergers may be challenging, but the difficulties facing so many universities call for radical cultural and leadership change: collaborative, cross-institutional and, above all, learner-centred thinking. Institutions need the leadership confidence to engage with deep structural collaboration. The elements for that are increasingly clear, involving collaboration to pool elements of strategy and organisation, both across HE and deep into the other elements of post-18 education; and there are valuable steps that can be taken without committing to full merger. 2026 provides a much-needed opportunity to test and shape such different approaches and models. Indeed, without such bold thinking, the opportunity to create a more coherent and effective system will not be realised.
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