The state government’s proposal to merge three of Western Australia’s universities doesn’t need a business case. It just requires asking one question: will the creation of a public sector behemoth lead to efficiencies and excellence?
Once everyone has stopped rolling around on the floor laughing, we can move to the next item of business.
But the state government is not going to take that approach. It has decided that a merger would be beneficial and it has announced a review to develop a business case for a merger.
At the announcement, Tertiary Education Minister Tony Buti said, "at present, we have duplicated offerings, fragmented investment and limited scale across our universities.”
If this is true, it’s not clear why a merger is the solution. Our universities are already very large institutions and each has undertaken significant investment in the past decade.
If there is too much duplication, surely the solution is to require universities to pursue greater differentiation and specialisation.
Dr Buti also said that WA's universities are in a "race to the bottom" and the reforms are necessary to ensure the sector is "world-class".
If that is the case, someone should point out that you can’t create an excellent organisation by amalgamating mediocrities. Bigger doesn’t always mean better. It often just means bigger.
None of the problems identified by the government are issues of scale. They are issues of management and governance.
Why is it that governments think mergers solve everything? It’s probably because they don’t know how to fix the problems that have been identified, so they go for the easy, magic fix of a merger.
The government has pointed to studies that found a merger would reduce costs and create efficiencies.
The problem with studies like that is they compare the actual current performance of individual universities to hypothetical future performance of the merged entities. They rely on subsequent behaviour matching the assumptions in the study.
It is the same process that businesses go through when considering mergers and acquisitions.
The difference with businesses is that there are rigorous attempts to wring savings and efficiencies out of mergers because the careers of senior managers and the jobs of the directors depend on it. If mergers fail, managers get replaced and sometimes the company is taken over.
There is no such accountability in the public sector. Senior managers just get a larger empire. Mergers take time, governments change, circumstances change and accountability for delivering the benefits of the merger fades away.
In the private sector, the costs of the merger are funded by cost savings. It has been suggested that the costs of merging the universities, which will be significant, will be funded by asset sales.
This is a terrible idea. It implies that there won’t be cost savings and depleting the universities’ assets will make them financially weaker.
A more effective course of action would be to create a better form of oversight to ensure that our universities are heading in the right direction.
Excellence is not a function of scale. In fact, scale is the enemy of excellence because it drags everything to the average or, worse, the lowest common denominator.
Oxford and Cambridge universities each have about 25,000 students, a similar size to UWA (27,000), Murdoch (24,000) and Edith Cowan (30,000). Curtin has 52,000 students, a bit more than Oxford and Cambridge combined.
Our universities have sufficient scale to be excellent but they are competing in a crowded market for talent and students. Scale won’t fix that. Leading academics and students won’t flock to an enlarged university.
Great universities are built brick by brick over a very long time. They cannot be magicked out of a merger.
Not every university can be great, in the same way that not every football team can win the Grand Final. Each university must find its place in the world and set out its offering accordingly.
Most students are not seeking PhDs or careers as professors. They just want a good education. Unfortunately, universities appear to be focused on international rankings, which are based on research, and finances. The students, who are the customers who fund universities, come a distant third.
The ranking of universities on the basis of research has led to universities struggling to move up the rankings by increasing their research quality and output. It’s a zero-sum game because every university is trying to crawl over each other to move upwards.
It’s a pity that they don’t focus on their customers, the students. Has anyone ever heard of a great teaching university in Australia?
Research is everywhere and it’s published. Our students don’t need to attend a research factory; they need to attend a learning institution. They need great teachers, not great researchers.
Our universities could be a lot better, but a merger is not the solution.
