Our universities are one of the UK’s greatest success stories – they produce world-class research, drive innovation across the economy and remain critical to equipping people with the skills they need to get on in life. Skills are, of course, crucial to economic growth and a successful industrial strategy, both of which we support.
However, we know that many higher education providers are facing very challenging financial situations and that greater collaboration between universities could help support the sector. This is where competition law – and the Competition and Markets Authority (CMA) – can play a role.
While some collaborations are more problematic under competition law, there are many areas where they are beneficial and pose no competition law risks. We can also support collaborations that benefit the UK by making clear that we won’t prioritise enforcement. This was the case in the development of cutting-edge cancer therapies and businesses working together to achieve their environmental goals. We think the higher education sector could benefit in a similar way.
So, we have been working with the sector and the government to understand concerns which may be preventing higher education providers from working together in ways that could be good for students or the economy.
What makes a good collaboration
Before we go into the types of beneficial collaboration that are unlikely to attract competition law scrutiny, here are some helpful points to consider if you’re thinking about pursuing a project jointly with another provider:
- define the purpose of the collaboration, what it aims to achieve and what benefits it may bring about
- articulate why the full benefits of collaboration could not be achieved by each higher education provider acting alone
- consider what effect collaboration may have on competition – for example, what impact it may have on choice for students
- make sure that any reduction in competition brought about by collaboration does not go beyond what is strictly necessary to achieve its beneficial goals
- be careful to ensure that discussions do not stray into the sharing of competitively sensitive information such as confidential details about market strategy – we have clear guidance on this
Where higher education providers can collaborate
Some forms of collaborations that could be beneficial to the higher education sector are unlikely to give rise to competition law concerns. These could include:
- jointly purchasing certain good or services. Universities could explore working together for procurement purposes in areas such as buying equipment or wellbeing services, which can help maximise savings and efficiencies
- sharing certain services and infrastructure. Providers could consider sharing back-office functions, libraries, or sports facilities to reduce costs. They could even explore more transformative ventures like sharing a data centre for AI research
- working together to facilitate student and staff movement. Providers can work together should they need to move students or staff from one provider to another – for example, if a course is closed
- discussing the possibility of merging with another provider. Providers can engage in discussions about potential mergers – there is nothing stopping them from doing so. Read our guide if you're considering this
- participating in conversations with government, regulators, and public bodies. Higher education providers can engage in conversations about improvements to policy and regulation to support the sector – for example, on delivering the right skills provision or on the focus of research efforts
What's next
Providers may also want to collaborate on course provision, such as jointly run courses. This type of collaboration may not be a problem – an example might be where there are many providers offering a course nationally and the course tends to attract students from across the country who will have other good options. However, because this is a more complex area, we are working to understand what collaborations may be under consideration and how these fit with the overall plans for higher education reform.
The CMA is committed to supporting collaboration which could help the higher education sector and ensure they don’t fall foul of the law. We will keep you updated on our thinking as it develops, as we continue to engage higher education providers and the government on how we can best assist the sector – for example through providing bespoke advice or issuing further guidance. This will support work by the government, which expects to set out its plan for higher education reform by the summer.
Higher education is one of many sectors we’re considering as we explore ways that we can help enable collaborations that support economic growth and the government’s industrial strategy. Our door is always open if you think that your industry could benefit in similar ways to those we have set out today.
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