The UK¡¯s competition regulator is working with universities to support more collaboration and mergers but institutions may need money from the government to make this happen, according to a new report.?

Universities UK¡¯s (UUK) transformation and efficiency task force has for improving efficiencies across the higher education sector as universities increasingly?experience financial problems, with nearly half of English providers?facing a financial deficit this year.

The task force identified ¡°widespread¡± appetite for closer ways of working between institutions, including full mergers, but found that fear of breaching competition laws is holding some back.?

¡°Universities are engaged in economic activities and compete on student recruitment,¡± the report says. ¡°As such, they fall within the scope of competition law and are understandably wary of breaching it.¡±

51³Ô¹Ï

This has made some university leaders ¡°cautious in initiating conversations about collaboration¡±, particularly related to teaching and students, it continues.

In May, the Competitions and Markets Authority (CMA) of collaborations ¡°that benefit the UK¡± and clarified that it ¡°won¡¯t prioritise enforcement¡± in some circumstances.?

51³Ô¹Ï

It said that there ¡°is nothing stopping¡± providers from engaging in discussions about potential mergers.

Earlier this year, City, University of London merged with?St George¡¯s, University of London to create a larger institution with greater focus on developing healthcare workers.?

However the CMA warned that institutions must be careful to ensure that ¡°discussions do not stray into the sharing of competitively sensitive information such as confidential details about market strategy¡±.?

¡°The CMA is committed to supporting collaboration which could help the higher education sector and ensure they don¡¯t fall foul of the law,¡± the body said. ¡°We will keep you updated on our thinking as it develops, as we continue to engage higher education providers and the government on how we can best assist the sector¡±.?

UUK¡¯s task force also said early consideration of mergers can involve a ¡°heavy financial and human resource burden¡± as well as ¡°very significant upfront costs that may be out of reach for universities under financial pressure¡±.

51³Ô¹Ï

It noted that, between 2015-16 and 2019-20, the government provided ?431 million to assist 45 further education colleges to cover the costs of mergers and other structural changes, mostly in the form of grants.

The report was published a week before the UK government¡¯s spending review, but there is little optimism universities will see any funding uplift from ministers.?

However, the report calls on the government to create a transformation fund to ¡°derisk and catalyse¡± new models of collaboration, as well as devote some of a wider transformation fund announced earlier this year ¨C focused on reforming public services and embracing digital technology ¨C available to universities for digital modernisation.?

51³Ô¹Ï

The task force also suggests that there are more opportunities for shared teaching to preserve ¡°vulnerable disciplines¡± and target cold spots as more universities cut courses and subjects in response to financial pressures.

¡°The focus of the previous UK government for more than a decade, on competition between institutions ¨C whilst supporting student choice ¨C has also created barriers to transformation through collaboration,¡± said Nigel Carrington, chair of the task force.

¡°We need to make sure the balance between competition and collaboration is right if we are to secure a sustainable future. Universities are clearly ready to think differently, and it is our job, and the job of government, to support them as they do so."

The next phase of UUK¡¯s efficiencies project will focus on transformation in specific areas of activity and ¡°securing action¡± from government and the sector to enable change.?

51³Ô¹Ï

helen.packer@timeshighereducation.com