More UK universities consider mergers as financial pressures drive push for efficiency

“The findings suggest consolidation could become an increasingly prominent feature of the higher education landscape, with universities exploring mergers alongside digital transformation projects, shared procurement arrangements and strategic alliances to improve their financial sustainability. The survey of 48 university finance directors found that 81% of institutions are considering digital transformation, 71% are open to shared procurement options and 65% are exploring collaborative structures such as federations and alliances. While only a small minority have already undertaken large-scale structural change, 40% said they would consider or are actively considering mergers or acquisitions with another institution. The findings come amid growing financial strain across the sector and follow two major merger announcements in recent months. In May, King’s College London and Cranfield University unveiled plans to merge in 2027, while the University of Kent and the University of Greenwich announced a merger last year that will create one of the UK’s largest higher education institutions. “Universities are grasping the nettle to respond to the severe financial pressures they are facing,” said Vivienne Stern, chief executive of Universities UK. “Many have had to make significant cuts, but the survey also shows how the sector is finding creative, collaborative solutions to become more efficient and ensure it can continue to deliver the world-class education the UK is known for,” she added. Universities are grasping the nettle to respond to the severe financial pressures they are facing… but the survey also shows how the sector is finding creative, collaborative solutions to become more efficient Vivienne Stern, Universities UK Universities UK said institutions are increasingly looking beyond traditional cost-cutting measures and towards structural reforms that could deliver long-term savings. However, the organisation argues that significant barriers remain, including VAT rules, upfront costs and a lack of specialist expertise to deliver major transformation projects. The sector is calling for greater flexibility around VAT and the creation of a government-backed transformation fund to support universities pursuing large-scale collaboration and restructuring. Despite the growing focus on efficiency, the survey suggests many institutions continue to rely on cuts to balance their budgets. Nearly four in five universities (79%) have implemented voluntary redundancy schemes over the past three years, while the same proportion have introduced recruitment freezes or hiring pauses. Almost half have reduced course provision through consolidation (46%) or closures (44%), while 31% reported cutting academic research activity – more than double the proportion recorded in UUK’s 2024 survey. Student support has also been affected. More than a quarter of institutions (27%) have cut bursaries and scholarships, up from 15% in 2025, while 13% have reduced hardship funding. The financial pressures facing universities show little sign of easing. According to the survey, 92% of English and Welsh institutions said recent increases to domestic tuition fees would not fully offset the impact of planned policy changes and rising costs. The most frequently cited pressures were increases to employer National Insurance contributions (79%), changes affecting international student recruitment (67%) and pay and non-pay inflation (65%). “We are extremely grateful to the government for the tough decision to uplift fees in line with inflation in England and Wales, but as the survey results show, it just doesn’t go far enough,” Stern said. “Course closures, staff redundancies and reduced research, which ultimately hit students, local economies and national prospects for growth, cannot continue to be the only solution to the sector’s financial challenges.” The findings follow a recent report from the Office for Students, which found that 36% of English higher education providers were in deficit last year and warned that more than four in ten institutions could face shortfalls in 2025/26. In early 2025, a sector taskforce was set up – the taskforce on efficiency and transformation in higher education – in a bid to drive efficiency and cost-saving across universities in England through collaborative solutions, including the exploration of mergers and acquisitions. The post More UK universities consider mergers as financial pressures drive push for efficiency appeared first on The PIE News .

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