13/12/2021 - 09:00

Unis, officials split on mergers

13/12/2021 - 09:00

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It’s unclear what benefit WA would receive from merging its universities into a single institution.

Unis, officials split on mergers
Peter Klinken has been chief scientist since 2014. Photo: Jessica Mascione

Peter Klinken was an academic before he was Western Australia’s chief scientist.

Through a nearly three-decade period in which he obtained his PhD from, and later taught, at the University of Western Australia, Professor Klinken lived through the feted market-based reforms of the Hawke-era that yielded the creation of Curtin University in 1987 and Edith Cowan University in 1991.

Competition across the state’s four public universities has been fierce since then.

While that’s led to a spate of specialisation, such as in ECU’s prioritisation of cyber security research or UWA’s penchant for biomedical research, it’s also led to domestic competition for staff and students who already reside in the state.

At the same time, WA’s proportional share of international students, whose fees have in recent years plugged financial holes left by federal funding cuts, has nearly halved over the past decade, with increasingly higher hurdles set for universities to access research and enrolment grants.

It’s a dynamic Professor Klinken has in recent years begun likening to shuffling deck chairs on the Titanic.

“I was just sort of shaking my head, looking at this and thinking, ‘There’s got to be a better way of doing this’,” he said.

Few could argue with the assertion that Australia’s university sector is struggling.

None of the country’s 39 public universities qualified for JobKeeper funding in 2020, meaning many have either dipped into their reserves or embarked on widespread cost-cutting measures to stay afloat.

Guaranteed funding for all domestic enrolments, a stopgap measure to preserve a major source of income at the start of the COVID-19 pandemic, has been taken away this year, meaning universities are likely to have worked with even less money than the year before.

Couple that with reforms to higher education that have cut the cost of degrees believed to result in more employable graduates while reducing funding for the departments that teach them, and the onus has fallen on university administrators to deal with the fallout.

Many have chosen to bide their time and continue enrolling international students in the hope borders will come down in the New Year.

Some, like the University of Tasmania, have chosen to support recently legislated changes to funding on the premise the changes won’t adversely affect enrolment trends.

Professor Klinken, however, has in recent weeks returned to a regular refrain of his since his appointment as WA’s top scientific adviser in 2014: consolidate all universities, and reap the benefits of the merger. He’s not the first to have raised the issue.

Murdoch University and UWA engaged in a dialogue on the matter in the 1980s amid a nationwide push to consolidate all higher education institutions into universities.

The process even received the tick of approval from the state government, until the Nationals sunk it in the upper house amid concerns over the fate of Murdoch’s veterinary school.

The conversation reignited in 2005, when ECU attempted to join a proposed merger of Murdoch and Curtin amid decreases in federal funding for public universities.

That plan fell over, too, in part due to disagreements over who would lead the newly created institution.

What sets Professor Klinken’s latest comments apart, disclosed to state parliament by Chris Tallentire, chair of the education and health standing committee, in September, is the extent to which the sector is expected to contract in the years ahead.

Universities Australia, the sector’s top lobbying body, has estimated $1.8 billion and 17,300 jobs were lost across the country’s universities in 2020, with further losses of $2 billion earmarked for this year.

And while the financial standing of WA’s four public universities isn’t quite as bad as some others, just two finished in the black in 2020, with UWA, by far the most profitable of the four, embarking on widespread redundancies nonetheless.

At the other end of the spectrum, Murdoch, which reported the steepest loss of the four, has operated on a short-term renewal of its university status since July, while it manages material risks to teaching quality highlighted by the Tertiary Education Quality and Standards Agency.

This time around, powerful supporters of a whole-of-sector merger are more numerous, with Premier Mark McGowan having gone on record with his openness to the possibility.

Infrastructure WA, which will report to the premier’s office in the years ahead on long-term planning decisions, has even flagged possible consolidations in its draft strategy document currently under review.

Such an institution, which would hypothetically teach to about 78,000 undergraduate students and have netted a profit of $71.3 million in 2020, makes a lot of sense to Professor Klinken.

“You can reduce a lot of competition, each university could become a separate campus, they could focus on their strengths and build expertise around those different areas,” Professor Klinken told Business News.

“Suddenly, the world’s looking at that [and saying], ‘I either want to be a student there or I want to work there’.”

But not everyone is on board with this vision for a so-called University of Perth.

Edith Cowan University vice-chancellor Steve Chapman has been among the most vocal opponents of Professor Klinken’s idea in recent months, in part due to what he sees as a lack of appetite from executives in the sector.

He doesn’t oppose mergers outright, citing the amalgamation of two smaller institutions to create the University of Manchester in 2004 as a notable success.

In that example, though, he notes the merger was widely supported by the executives and boards of both institutions, coupled with financial backing from governments and the national regulator.

Instead, Professor Chapman likens the current proposal to that of efforts undertaken by the Welsh education minister in 2012 to merge three of the country’s nine universities.

While two of those institutions ultimately came together as the University of South Wales, Cardiff Metropolitan University was left out after repeatedly raising objections about the lack of a business case in favour of the process.

“If two institutions wanted to merge, I have no problems,” Professor Chapman said.

“What I’m against is, rather than going to the university and asking whether it would like to consider this idea, going into government and saying this [merger] should happen.”

Curtin vice-chancellor Harlene Hayne broadly shares this view, noting she hasn’t been privy to discussions about, or seen a business case in favour of, a four-way merger.

“All I know is what I’m reading in the press,” Professor Hayne said.

“I have no insider information about the motivating factors; I have no idea if and how my university would be involved.”

Professor Klinken admits many of these criticisms haven’t punctuated his orbit. In his view, the proposition for a merger is straightforward: with 43 universities servicing a population of 25 million people, Australia’s higher education sector will necessarily need to consolidate as federal funding recedes and the market for international students becomes more competitive.

“Globally, there are a number of universities that are doing this,” Professor Klinken said.

“We’ve seen universities in Denmark condense from twelve to eight; the University of Copenhagen is in the top 30 [universities in the world].

“University of Manchester merged with Manchester Institute, they’re in the top 30.

“University of Paris-Saclay brought 20 different organisations together, and they’re 13th in the world.

“This is not just some crazy chief scientist’s idea.

“Some people might well think that [but] it’s not something that’s so radical.”

Even if there is precedent for the proposal, the lack of detail thus far has rankled some onlookers, Professor Chapman included.

Steve Chapman is vice chancellor of Edith Cowan University. Photo: Gabriel Oliveira

“I’m happy to have the debate, and we are now having this discussion, but I just wish the debate was a little bit more evidence based than it is,” he said.

“We’ve got a lot of evidence about what the status quo is like, and the status quo for [ECU] is that we’ve got the best teaching quality [and] the best student experience in Australia as a public university.

“For me, that’s good, that’s what I want, so someone would have to explain to me how I could maintain that in a larger university.”

Answering that question may be difficult, given many merger proposals in recent years have fallen apart before they can be quantitatively analysed.

Notably, a proposed merger between the University of South Australia and the University of Adelaide floated in 2018 outlined several benefits, including greater access for students from lower socioeconomic backgrounds, more room for staff and academics to engage in cross-discipline study and teaching, and the ability to climb league tables that otherwise eluded the state’s institutions.

That all proved less than persuasive to the vice-chancellors, who reportedly couldn’t agree on what to name the new institution.

Said merger has since been revived amid shrinking margins at both institutions.

Whether a business case would be useful is another question.

Gwilym Croucher, senior lecturer in higher education policy at the University of Melbourne, has written extensively on the topic of mergers in the past, including the Hawke-era reforms that yielded Australia’s current batch of universities.

He made the point that often there were no obvious answers as to why some mergers succeeded and others fell apart, including disagreements over naming rights.

“I’d be very hesitant to say cultural issues are the main reasons that mergers fall apart,” Dr Croucher said.

“There’s usually a lot going on there in terms of structures and different ways of doing things.”

For his part, Professor Klinken acknowledges that, despite conducting his own preliminary research and sighting analysis by a WA-based university into the benefits of a potential merger, there’s significant work needed before a four-way merger goes ahead, including a substantive and persuasive business case.

At least one piece of research he does cite is modelling conducted by two academics at Curtin University, which analysed the financial standing of all public universities, bar UWA, merged into a single institution.

Their research, published in 2015, purported to show a prospective super university could benefit from reduced operational costs and improved use of extensive property holdings.

Given the research focused strictly on a potential business model, consideration was not given to how the move may impact intangible aspects, such as how a single institution may affect student demand and the formation of a single, unifying workplace culture.

Emil Temnyalov, senior lecturer in economics at the University of Technology Sydney, is generally supportive of further consolidation in the sector, but raised concern with how merged entities may affect learning opportunities for students.

“On one hand, [university mergers] decrease competition, which could be bad for quality of education in the long run,” Dr Temnyalov said.

“On the other hand, they improve economies of scale, because when you look at the kind of the distribution of what universities spend their money on, less than half of the staff at universities these days are academics.

“A goal of agglomeration would basically be fewer resources going to support services, and more resources proportionately going into things like hiring better academics [and] building better research facilities, like research labs.

“There are clear benefits from the perspective of economies of scale. The question is, I think, a question of balance.”

In the case of Professor Klinken’s proposal, the premise of a merger hinges in part on declining revenue from international students in the years ahead.

It’s also driven by his belief that WA’s institutions, once merged, could leverage off each other’s strengths to climb global rankings and compete for a greater share of Australia’s overseas student intake.

Whether that argument proves persuasive is questionable, but not without merit, given the likes of UWA have long since made a virtue of their place in the top 100 of the three major world rankings of universities.

Some, such as Gary Martin, who served as deputy vice-chancellor at Murdoch in the 2000s, are circumspect when it comes to merging universities to achieve better league table rankings.

“The rationale for a merger of our four public universities needs to be much clearer, and not just that the merged entity would achieve a better position in the rankings,” Professor Martin said.

“We need to ask the question as to whether merging the four public universities is in the public interest.”

Professor Klinken would argue such a move, if pursued, would be in the public interest. He professes some surprise at the way in which his comments, made in passing to a parliamentary committee, have been taken up in recent months.

He’s also happy with the responses he’s received thus far, and remains eager to have a conversation he’s floated for many years.

“I’ve been really pleased by the number of academics, politicians and businesspeople who’ve got in touch with me who say this is a really good idea,” Professor Klinken said.

“Let’s have a mature conversation about this.

“Let’s put all the facts on the table and ask whether this is worth doing or not.”

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