Many vice-chancellors in England believe that outright university closures ¡°will be mitigated through facilitated mergers and takeovers¡±, and that full-scale shutdowns would be ¡°politically and socially unconscionable¡±, according to a survey.

The of heads of UK higher education institutions, published on 17 January, also found many vice-chancellors expressing anxiety about fractures created?by the 2012 tuition fee regime and the abolition of student number controls in England, such as the highly controversial growth of unconditional offers and the intense politicisation of university funding. ¡°We have been sleepwalking into the predictable consequences of an unregulated mass market,¡± one leader quoted in the report said.

The survey gathered responses from 160 institutional leaders from across the UK. In previous editions, up to 70 per cent of respondents have viewed the prospect of institutional failures as ¡°highly or quite likely¡±. Yet in this year¡¯s survey, despite widespread concern about the financial future of some universities, ¡°only 9 per cent of respondents thought institutional failures to be?very likely and?27 per cent quite possible,¡± write the report authors, PA Consulting¡¯s Mike Boxall and Paul Woodgates.

Notwithstanding warnings from the Office for Students and ministers that failing institutions will not be bailed out, ¡°vice-chancellors mostly believe that outright institutional closures will be mitigated through facilitated mergers and takeovers and/or through rationalisation and shrinking of failing provision¡±, the report continues.

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One vice-chancellor told the report authors: ¡°I¡¯m absolutely certain there will be market failures, though through mergers rather than outright closures.¡±

Fifty-nine per cent of respondents judged ¡°significant numbers of?institutional mergers or takeovers¡± to be ¡°highly likely¡± or ¡°quite possible¡±, while 74 per cent gave these answers when asked about an ¡°overall shrinking of provision and choices across the sector¡±.

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The report adds: ¡°Some suggested that any facilitating interventions were more likely to come from other directions than the OfS, such as HM Treasury or regional authorities. There was a strong view that the disappearance of struggling universities in economically vulnerable towns or regions would be politically and socially unconscionable, whatever ministers and the OfS might say, and that the sector collectively would rise to the challenge of finding remedies ¨C as they had done in past cases.¡±

Mr Woodgates told?³ÉÈËVRÊÓƵ?that ¡°there was scepticism among vice-chancellors at the likelihood of outright institutional failures, if that meant locking the gates and sending the students elsewhere ¨C a prospect so unattractive to all concerned that ways will be found to avoid that¡±.??

But ¡°that is not the same as saying things will carry on as they are¡± and sector leaders believe that ¡°there will be significant rationalisation¡­where a university gets into trouble¡±, which will be addressed ¡°by the government or perhaps¡­by the sector itself¡±, he added.

On funding and student number controls in England, the report says that a quarter of vice-chancellors said that their institutions ¡°had found the shift?to fee-based funding highly beneficial, while 55 per cent had benefited significantly from the lifting of SNCs. But these changes had been highly damaging for up to one-fifth (7 per cent from SNCs and 18 per cent from fee-based funding).¡±

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Mr Boxall said that the survey highlighted how swiftly the English sector has ¡°moved towards a mix of winners and losers¡±, in which the gains of some institutions ¡°have been pretty much at the direct expense of others¡±.

john.morgan@timeshighereducation.com