Welsh universities might have to merge if they want to survive

The Welsh and UK higher education sectors are facing huge financial challenges.

As this column pointed out a few weeks ago, there has been increasing attention on the financial position facing UK universities, largely due to the growing dependence on international student income and recent changes to visa regulations that have significantly affected this market.

However, the situation appears to be worsening, with 57 UK universities announcing or confirming redundancies as well as course or departmental closures. There are also rumours in the higher education sector that more announcements are imminent, and that some universities have been cutting costs by not renewing fixed-term contracts or reducing the hours of hourly paid lecturers.

While university leaders have remained silent about the current situation, it is noteworthy that John Rushforth, executive secretary of the Committee of University Chairs (which represents the chairs of university governing bodies), stated that the current situation is a problem that is not going to disappear. More relevantly, he noted that this was “not a blip that we have to weather for six months, so institutions have to take some proper action”, otherwise some universities could go out of business.

While there is a view that conducting these actions properly through voluntary redundancies is far preferable to waiting until things get out of control and having to resort to massive compulsory redundancies, the problem, of course, is that even voluntary redundancies may not save those universities that have focused their futures, for whatever reasons, on attracting overseas students.

In Wales, there are already signs that the sector is attempting to cut costs. According to the University and College Union, Aberystwyth University has announced it will axe its entire postgraduate teaching course, Cardiff University plans to cut ancient languages, and Bangor University’s International College is reducing its administrative staff and permanent tutors.

At Swansea University, nearly 200 members of staff have already left under a voluntary severance scheme, while Cardiff Metropolitan University has also initiated such an arrangement for its staff. Finally, the University of South Wales has announced a “voluntary exit” scheme for colleagues without articulating how much they have to save, how many people they want to leave, and whether the cost savings would go towards filling a deficit or a shortfall against target cash generation.

Many in the sector fear that this may not be the last time Welsh universities will be forced to reduce spending, although what will happen will depend on how exposed they are to the decline in overseas postgraduate students and their current financial state. Some have bet heavily on attracting international students from countries such as India and Nigeria, which have been hard hit by visa regulation changes, and things could worsen when the main intake of students is due in September 2024.

At best, there may need to be a situation where shared services agreements between institutions to cut costs, although that is unlikely to make much difference. The other option is that the structure of higher education in Wales may have to change dramatically, and having spoken to some senior people within Welsh universities, there are suggestions that there may need to be a realignment of the higher education system through mergers and structural changes.

While this would require a financial emergency with one or more institutions in danger of failing, one potential scenario could see the number reduced to four, with Cardiff and Swansea universities remaining independent, a potential merger between Bangor and Aberystwyth, and the creation of a new super “Polytechnic of Wales” comprising the University of Wales Trinity Saint David, University of South Wales (UWTSD), Cardiff Metropolitan University, and Wrexham University.

It clearly depends on the financial position, but there could also be a further variation on that, with Swansea-Bangor-Aberystwyth creating a new ‘University of Wales’, or even the (unlikely) prospect that Swansea and Cardiff merge, or at least share resources and costs in the future. Other options could be based on regional configurations such as Swansea-UWTSD, Bangor-Wrexham, and Cardiff Met-University of South Wales, which would also partly align with the new regional economic and skills agenda in Wales.

However, if the financial situation does not change – and it is difficult to see either home fees increasing or rules around dependents being changed anytime soon – then the only option for reconfiguration could be either a managed decline in the viability of some Welsh universities or even closure.

While international students bring much to any higher education sector, university leaders in Wales have also been quite open about how international fees essentially subsidise both research and home students, and it is clear that any further decline in the numbers of overseas students coming to Wales will have a serious effect on the viability of the sector, something which the Senedd or the Welsh Government needs to examine as a matter of urgency.

This is already happening over the border, with the House of Commons Education Committee launching an inquiry into international students in English universities which will examine the changes in numbers of international students in recent years, the impact of such students on university funding and availability of places for domestic students, and whether universities are achieving an appropriate balance between international and domestic students.

Given the importance of universities to Wales in so many ways, it is critical that a similar inquiry to that taking place in Westminster is undertaken soon to determine what is going on in Welsh higher education before it’s too late and events overtake the sector.