Merging institutions involves much more than simply doing the maths

So the Government has confirmed massive cuts in funding for universities, realising the worst fears of many a finance director and going so far that even the president of Universities UK felt it necessary to get stroppy with ministers.

Described in the media as "a real Christmas kick in the teeth", these cuts are so deep that they will inevitably cause catastrophe for some institutions. Worse, we expect more (and probably greater) cuts immediately after the general election.

It did not surprise me therefore that journalists across the broadsheets and airwaves decided that a rash of mergers and takeovers in the sector was inevitable.

Their logic focuses on the unsustainability of costs for small institutions and the potential savings large institutions might make by coming together. Maintaining expensive academic facilities such as libraries, while also having to sustain the costs of essential services such as running the estate, IT, marketing, finance and personnel, imposes, self-evidently, a lesser burden per student on larger institutions.

Unable to expand government-funded student numbers to make up the funding shortfall, tiny institutions will simply find that the maths cannot be made to add up and they will have no alternative but to merge with a partner that can share costs. In those many cities where there are two universities and each has a library, sometimes even on the very same street, surely to goodness, the commentators argue, merging is the obvious answer.

In the UK, relatively few university mergers have taken place. In recent years in Wales there have been attempts to force mergers top-down, no doubt with the aim of mirroring a successful initiative in Denmark that halved the number of institutions. The authorities in Scotland toyed with a similar idea. Some locally inspired institutional groupings have looked set to make it to the altar, but in the end the parties walked away still single. Examples include University College London with Imperial College London, and St George's, University of London, first with Kingston University, then Royal Holloway, University of London.

There have been some shotgun weddings - most famously University College Cardiff and the University of Wales Institute of Science and Technology. Some have been great successes: Manchester University and UMIST is one such example. Others, such as Thames Valley University and Reading College, have struggled.

Merging institutions is about more than simply combining those departments that support academic activity. Institutional culture also plays a role, as do local politics, right down to the level of institutions' governing bodies. When considering a merger, it matters who will be chair and where the members of the combined governing body are from. Each governing body will have its own anxieties about who will lead the combined institution and what will happen to those for whom roles cannot be found.

If the Government wants to encourage mergers to ameliorate the university funding crisis, it must address a number of issues.

First, it needs to spell out what the selflessness of governing bodies (as required by the Nolan principles of governance) means when it comes to considering mergers.

Second, it will need to make available some serious cash by way of dowries. Without doubt the single most important prohibitor of mergers currently, and the reason they will happen only in extremis, is the combined effect of research assessment exercise outcomes and league tables.

All other things being equal, no governing body is going to vote to merge with an institution that will drag down its RAE or league table score, so intra-city mergers are generally ruled out at first base. The availability of a serious amount of extra cash for a bailout, or to close the research gap, or for other key strategic purposes such as new buildings - possibly in new locations - can make (and, indeed, often has made) a merger possible. Additionally, the revamp of the RAE into the research excellence framework must open up mergers as a more attractive option to governing bodies.

Doing all of these things may still not be enough. The issue of institutional cultural difference is harder to deal with. To paraphrase Justice Nolan, writing in the US in the 1990s, universities are not fungible: they have usually been created to perform certain missions.

So often in life, that which it is intellectually self-evident we should do may, when cross-multiplied with human considerations, turn out not to be an attractive option. Why else do we have more than one high-street supermarket, high-street bank or high-street clothing retailer?