The State Government is developing a business case into the potential merger of UWA, Curtin and Murdoch, basing its case on the findings of a cost benefit analysis by consultancy firm Deloitte. In this opinion piece, Vice Chancellor Professor Andrew Deeks argues the report’s case for mergers is based on weak assumptions and flimsy evidence. Rather, he says, mergers will consume time and resources while reducing student choice and delivering little genuine benefit to the State.  

So Deloitte’s Rapid Cost Benefit Analysis (RCBA) of the case for merging WA universities has finally been released, and apparently there are billions of dollars of benefits to be had!

Perhaps these consultants have been able to identify opportunities the Vice Chancellors leading our WA universities - who between them have more than a century of university experience - have overlooked. But let’s look at the Deloitte report in more detail.

The RCBA evaluates the financial benefits of a potential merger using three things:

1. Improving the six-year undergraduate completion rate and a proxy for the postgraduate completion rate;
2. Improving the research grant capture per academic staff;
3. Improving the income per international student.

In each case they assume that a merger helps the lesser performing universities catch up with the top performing university on each measure by narrowing the gap by 50%. (Why 50%? Well, as a good consultant does, they took 30% to be the low scenario, 70% to be the high scenario, and 50% to be the core scenario.) Nice round numbers. You can see why they earn the big bucks.

In the case of the six-year completion rate, Murdoch University has a large proportion of mature-aged part-time students - many of whom balance work and caring responsibilities with their studies. Although these students may not finish within six years, they do finish. (Deloitte, however, assume that if they have not finished by six years, they don’t finish. This is a fundamental error in the analysis.)  

And why would the progress of these students accelerate in the case of a university merger? It is the life circumstances of these students that means some students take more than six years to finish.

In the case of the research grant capture per academic, UWA is already doing better than all but one other university in Australia, because the university has long made research performance core to hiring decisions, and indeed has recruited good researchers from other WA universities!

Grant capture is, to a large extent, an ability of the individual researchers and the teams of researchers. Merging universities does not change the people, and, where it is beneficial, our researchers already collaborate across the WA universities on grant applications. So there is no realistic prospect that a merger will improve the average research grant capture across the merged institutions.

Finally, the RCBA assumes the merged university will be able to retain all the international students of the lower-priced universities, but increase the price for those students, closing the price differential by 50%.

This has two problems. Firstly, how does the merged university operate with two different prices, potentially for the same courses?

Secondly, many international students are highly price sensitive.

Rather than go to a higher-priced, higher entry merged university, they will go elsewhere. Even if they go to ECU and continue paying a lower price, while they are not lost to the State, the merger benefit is lost. And anyway, the merged university would need to charge a single price – either stick with the high price and lose the price-sensitive students or drop the price to maintain some of those students.

Having worked in the senior leadership of universities here, in the UK and in Ireland, and facilitated strategic planning modules for senior university leaders from around the world in the International Association of Universities Executive Leadership Program, I can assure you that if there were simple ways to improve the performance of universities by billions of dollars, universities would have adopted them already.

The competition for high-performing academic staff at all levels is a global phenomenon, as the research track record of the academics is the single biggest factor contributing to the research performance of a university. Because research funding is a fixed pool, winning research funding is a zero-sum game. Merging universities does not change these fundamentals. Moreover, the amount of research funding won by a university does not reflect into the student experience.

The competition for fee-paying international students is also a global phenomenon. Merging universities does not change the students who are considering coming to study in Western Australia, but reducing the number of price points and entry standards does, in a negative way.

And mature-aged students taking more than six years to do an undergraduate degree while they work and/or undertake family duties should be seen as a positive, not a negative. The financial and career benefit their studies bring to their own lives and society at large does not change based on how long they take to complete.

All that a university merger will do for WA is cost a lot of time, money and energy, while reducing choices for students and alienating alumni, at a time when our universities need to focus on the challenges and opportunities of generative AI, and how we prepare our students to take their place in an AI world.

That the Western Australian Government continues to be taken in by this nonsense is extraordinary. Another fail for Deloitte.

Professor Andrew Deeks is the Vice Chancellor of Murdoch University and President of the International Association of Universities.