Up to 30 universities 'could close or face merger' because of government reforms and dwindling student numbers

77 per cent of the university leaders interviewed believed a number of universities will fail or go bankrupt (Alamy)

Up to 30 higher-education institutions could face closure or merger within the next few years, according to a survey of university leaders.

The survey, by the PA Consulting Group, reveals 77 per cent of the university leaders interviewed believed a number of universities will fail or go bankrupt as a result of government higher-education reforms and dwindling student applications.

The biggest threats are a drop in demand for student places – because of rising fees coupled with a fall in the birth rate – plus the introduction of a more market-based approach to recruitment. This has allowed universities recruiting large numbers of students with top-grade A-level passes to expand, while the rest fight for a small share of the market.

In addition, fears were expressed that the Government’s curbs on immigration will make it more difficult for universities reliant on fees from overseas students to boost their finances to survive.

“Opinions are divided on the prospects for outright institutional failures or insolvencies but over 77 per cent expect significant rationalisation through institutional mergers and takeovers,” the report says.

Mike Boxall, a higher-education expert at PA Consulting Group, said: “We are witnessing a sea change in the dynamics of higher education.”