The Super University Age Is Upon Us

The proposed merger between the University of Greenwich and University of Kent has been described in the press as creating a “super university”.  In fact, the new institution is likely to be just the first in a series of mergers as the HE sector adjusts to a new reality. Despite another surge this year in the overall number of undergraduate applicants, the growth in demand has not been shared evenly across the sector; there have been big winners and big losers in the annual competition for new students, and international student recruitment is worryingly sluggish. Inevitably, this means more financial headaches for many universities, which is why the Kent/Greenwich development is going to become a new normal for HE in England.

A report from the formidable pairing of consultants KPMG and lawyers Mills & Reeve – “Radical Collaboration: A Playbook” (July 2025) - continues the work of Universities UK’s Transformation and Efficiency Taskforce in trying to find solutions to the funding crisis universities face. Its main theme is to explore the idea of a shift towards a model based on partnership and cooperation, rather than markets and competition. As the FE sector has found, the most stable and sustainable solution is to go for a full merger, whether through the standard process of one institution dissolving into another, or through federated models similar to Multi Academy Trusts in the school sector.

Whatever the solutions, the paradigm of a competitive market that has dominated Higher Education policy for the past decade is beginning to break down. But it’s always been a difficult model to sustain; if universities are in a market, then it’s a very peculiar one, with two highly unusual features.

One is that customers can only use vouchers – A-Levels or their equivalents – to make a purchase. These are supposedly available to everyone who has the ability to do well in the annual competition to get them, but in practice the winning consumers are almost all from the same demographic: young, middle class, from relatively affluent backgrounds. Amongst the many reasons for this, it’s clear that the appetite for going to university is much lower in low-income communities. This year there was a modest increase in the number of 18 year olds from the most deprived areas of the country entering university, but they only make up just over 9% of the total. 

The most peculiar aspect of the HE market is that the price of HE services is virtually the same everywhere. It’s hard to imagine a car market where the most powerful and prestigious vehicles are sold at exactly the same price as the basic economy models, but this is exactly what we have in higher education. Whether we like it or not, some UK universities are seen by the general public as having a “Rolls Royce” brand compared to the “average family car” image of others, something particularly important for securing a well-paid graduate job. Not surprisingly, customers with enough qualifying vouchers rush to buy the luxury models, and HE retailers in the prestige sector are lowering the qualification threshold to bump up their sales volumes. A record 41% of UK applicants got into high-tariff universities this year, as did a record 69% of international undergraduates.

There’s no doubt that HE expansion has raised the overall qualification level of the UK population, but following a market model to achieve this has generated three big problems. First, there is a misalignment problem; the number of graduates in Engineering and Technology subjects is simply not enough to fill the skills shortages bedevilling key industry sectors, and this shows little sign of changing. Secondly, there’s a lifelong learning problem as the system doesn’t encourage those in the workplace to upskill to keep up with advances in their field, or reskill to switch from declining to growing industries. Thirdly, there’s a social cohesion problem, as the system shuts out people from low income backgrounds and thus fails to fairly distribute the benefits of higher education across Britain’s population.

In reality this is a pseudo-market that has been artificially constructed since student fees and loans came in. The rules of market entry, the prices on offer and to a large extent the nature of the products on offer, are set ultimately by government. We have ended up in 2025 with a situation that has been created by design, not by any invisible hand. Which means in theory it could be re-engineered to look very different. But there are few signs of the Government leading on this, the sole exception being the introduction of  the Lifelong Learning Entitlement, due to start in AY 2026/27, which is an attempt to open up higher education to meet the skills needs of working adults, and could have a significant impact over time on re-shaping the market.

Meanwhile, the number of burning boats in the HE sector mean that whatever the forthcoming Post-16 White Paper contains, the HE market is going to have to conduct emergency surgery on itself through a wave of institutional mergers. But while this will help stabilise university finances, it won’t necessarily fix the underlying flaws in the current system. For that, the government needs to find policy solutions to address the three problems the current system has left us, and find solutions to improving access to opportunities, better aligning provision with skills needs, and fostering a culture of lifelong learning.