Briefing
The great consolidation
British universities are opening up to mergers as they tackle a precarious landscape of budget cuts, negative sentiment and political will.
By John O’Leary
18 June 2026
In brief
- Forty percent of UK universities consider mergers as they navigate a precarious landscape of funding cuts and political shifts.
- Plunging enrolment and a looming demographic cliff force institutions to slash staff, research activity, and vital student services.
- Survival hinges on "the great consolidation" and convincing a sceptical public that higher education remains a primary growth driver.
Two in every five UK universities say they are open to the prospect of merger, such is their concern over higher education funding and the policy directions of all the main political parties. None of the parties are promising the rebalancing of funding that universities regard as essential to avoid damaging cuts and institutional closures.
King’s College London and Cranfield University are the latest to announce an amalgamation, which will take place in 2027. Kent and Greenwich universities have also announced that they will become the London and South East University Group this August, although they will continue to use their traditional names for student recruitment.
A survey, conducted between March and April 2026 by Universities UK (UUK), asked respondents in which areas they had already made cuts due to financial necessity, and where they would consider future reductions if required.
More than 80 percent said they were considering digital transformation, 71 percent were open to shared procurement options and 65 percent had discussed collaborative structures such as federations and alliances.
Staffing cuts were among the most common means of balancing budgets, with almost 80 percent of universities pursuing voluntary redundancies and 79 percent implementing temporary or permanent freezes to recruitment over the last three years.
Cuts to student services had also increased since the previous survey, with 27 percent cutting student bursaries and scholarships and 13 percent reducing hardship funding.
Almost a third of institutions reported making cuts to academic research activity in the last three years, up from 14 percent in 2024. While recent increases to home undergraduate tuition fees were welcomed as having a positive impact on finances, more than 90 percent of English and Welsh institutions said the fee uplift would not fully compensate for the financial impact of other policy changes.
The National Union of Students (NUS) and UUK issued a rare joint statement this month warning that the financial foundations of world-leading universities were under threat. They claimed that the UK government makes the smallest financial contribution to universities of any country in the developed world, and added that recent governments had pushed more of the fiscal burden onto students.
The latest British Social Attitudes (BSA) survey, which has been conducted by the National Centre for Social Research since 1983, found that the proportion of people who believe a degree is not worth the time and money has jumped from 14 percent in 2005 to 34 percent last year. This finding correlates the first ever drop in the proportion of British young people pursuing an undergraduate degree.
The proportion of people who believe those who go to university will end up a lot wealthier than those who do not has plummeted, down from 50 percent to 36 percent.
The right-wing Daily Mail newspaper devoted its entire front page to a story headlined “Is university a waste of money?” reporting think tank research which found that half of all graduates were earning less than the national average five years after leaving university. The Policy Exchange report found that only 57 percent of graduates were employed 15 months after graduating.
Nick Hillman, the Director of the Higher Education Policy Institute (HEPI), has a more positive interpretation of the figures. “While university still benefits most graduates most of the time, the lack of substantial economic growth means the rewards are not always as great as people hope beforehand,” he says.
“However, despite years of negative rhetoric, it is still only one in three people who think university is not worth it.”
Nevertheless, the enrolment of international students in the four most popular English-speaking countries – the United States, UK, Canada and Australia – continued to decline in the first five months of 2026. The declines were greatest in Canada and the US, with 24 percent fewer undergraduates in Canada and 24 percent fewer masters students in the US. Australia and the UK saw 16 percent and 15 percent declines in masters students.
A new report published by HEPI, sees demographic decline as a more potent long-term threat to UK universities. The report, Demographic decline and predatory recruitment: The twin threats to English higher education into the 2040s, shows that the young population from whom 80 percent of undergraduate students are recruited, will decline rapidly after 2030, and within 10 years the income universities earn from this source will decline by nearly 20 percent.
However, some universities will feel the effects more than others. The most prestigious universities are already recruiting students whose school achievement is lower than they would previously have considered in order to maintain the size of their intake.
While the 18-year-old population has been increasing (as it will for four more years), some of the lower-tariff universities have maintained their numbers while many have not. However, when the demographic decline sets in after 2030, if the higher-tariff universities continue their recent recruitment practices, HEPI believes the rest of the sector will face real problems.
At UUK’s annual Political Affairs conference, Vivienne Stern, the organisation’s Chief Executive, said universities faced an “extremely messy and increasingly fragmented landscape”, with rising support for the extremes of the political left and right. But she struck a more positive note, urging universities to do more to convince people that their courses represented the best protection from unemployment while their research was an effective driver of growth. “We need universities to be optimistic about the future of the UK,” she said.
The keynote speaker, Rachel Sylvester, Political Editor of the Observer and among the UK’s leading commentators on politics, said universities had the opportunity to influence the government and politics more generally, but would also take a risk in the attempt.
Sir Keir Starmer, the British Prime Minister, was looking for a legacy, although he had disowned the longstanding target of 50 percent participation in higher education in favour of two-thirds participation in all forms of post-school education. Andy Burnham, his most likely successor as Labour leader had said that universities had been “overpromoted” and only Wes Streeting, of the likely leadership candidates, had cast doubt on the extra emphasis on vocational education in case it presaged a return to attitudes that steered the working class towards vocational courses, with the middle classes dominating academic degrees.
Sylvester said universities should be careful not to be seen as part of the elite – only 9 percent of graduates supported the right-wing Reform Party, for example, compared with 40 percent of the remainder of the voting-age population. But the acknowledgement of the importance of scientific research during the pandemic and in the development of AI more recently were causes for optimism for universities in the struggle for political and public support.
MEET THE AUTHOR
John O’Leary is an education writer, journalist and consultant with over 30 years experience. He has served as Editor of the Times Good University Guide, Editor of the Times Higher Education Supplement from 2002 to 2007 and Education Editor of The Times, having joined the paper as Higher Education Correspondent in 1990.
Briefing
The great consolidation
British universities are opening up to mergers as they tackle a precarious landscape of budget cuts, negative sentiment and political will.
By John O’Leary
