Lucy Hodges: The truth about this university mega-merger

There is no certainty that the knot will be tied, because university mergers are difficult to achieve

For years educationalists and ministers have moaned that British universities are too small and too badly funded ever to compete with the great colleges of America, or even Europe. Yet when the first moves to create a global competitor have come with the announcement of merger talks between Imperial and University Colleges in London, the educational establishment seems to have been caught completely off guard.

They shouldn't have been. All the signs are that mergers of this kind are the way of the future. What Imperial and UCL are doing is what David Blunkett called on the university sector to do back in February 2000 with his speech at Greenwich. They needed to make a common cause, become global players and play to their strengths, otherwise Britain would go down the tubes and watch while its global lead in higher education was whittled away, he said.

Full of chutzpah this week, Sir Derek Roberts, UCL's provost, declared that the merger would put Oxford and Cambridge into the shade. He has a point. The new institution will have superior research funding to either Oxford or Cambridge, and it could well overtake both ancient universities in the five-yearly audit that makes or breaks universities for research.

Whether a new academic powerhouse in London could really make trouble for Harvard or Princeton or Yale may be stretching it, given those universities' fabulously rich endowments, but it could certainly have a go. As someone who has lived and worked much of his life in America, Sir Richard Sykes, the director of Imperial and head of the new institution, believes that British universities should be set free from state control. They need to charge students full-cost fees rather than the current subsidised flat-rate fee, he says. In other words, they need to raise much more money from private sources and become more like American universities.

Sir Richard has already made a start at Imperial College in reorganising the cumbersome administrative machinery from 35 academic departments into four streamlined faculties. And, having created GlaxoSmithKline, one of the world's biggest pharmaceuticals companies, out of a merger, he should know all about how to raise money for research from drug companies, as well as how to build a spanking new international organisation.

Behind the proposed merger lie some sober facts. UCL is in dire financial trouble. This year it faces a deficit of £8m. Some of its buildings are falling apart because successive administrators failed to find the money for maintaining the plant, preferring to spread the cash thinly keeping all academic departments going. When Sir Chris Llewellyn Smith, the former provost ousted in the summer of 2002, tried to streamline the college more radically, he met with an unprecedented palace revolution. The upshot was that 40 professors, many of them fellows of the Royal Society, signed a letter of no-confidence in him. The governing body wasted no time. Sir Chris fell on his sword rather than be subjected to a humiliating vote against him at a meeting of UCL governors.

Now that the merger news has broken, the departure of the former provost takes on a different hue, especially with the revelation that UCL had initially wanted Sir Richard to become its top dog three and a half years ago. Was Sir Chris being pressured into a merger with Imperial that he was resisting? Whatever the answer, the marriage must stand a good chance of success with Sir Richard at the helm. UCL's governors must like him if they had looked upon him with favour before. And no one can be in any doubt about his ability, ruthlessness and drive.

There is, however, no certainty the knot will be tied. University mergers are difficult to achieve, often foundering on the refusal of one chief executive to give up his job (it is usually a "he") to another, or the feeling that one institution will lose its identity. A recent merger between Aston and Birmingham universities in the Midlands came a cropper because Aston's academics felt they would be swamped by the larger institution.

But the fact Imperial and UCL don't have two top dogs (Sir Derek is a caretaker provost who was appointed to fill the chair when Sir Chris left) means the omens are good. Students at UCL may regard those at Imperial as their rivals, and academics may worry about whether their jobs will disappear in rationalised departments, but they may find that their anxieties are unfounded or fall on deaf ears. The wind is blowing in the direction of mergers. The Government is giving special funding to encourage them because, according to the experts, the UK has too many universities, especially in London. In fact, the capital groans with higher education institutions. Within 25 miles of Charing Cross, there are 57, educating more than 220,000 full-time and 110,000 part-time students, and providing courses to a quarter of England's student population.

London is one of the world's great metropolitan powerhouses of higher education, not unlike New York in scale. Yet, until recently with the merger of the University of North London and London Guildhall, there has been precious little collaboration between the different units and even less vision about how higher education energises the economy – how it can connect with business and local and central governments as a force for good.

So, merger makes sense however you look at it. The marriage between Imperial and UCL brings together London's premier science institution and its most élite university to form an institution that should be stronger than the sum of its parts. The joint university will have a whole new brand to develop, and it will be a classier brand than that of Imperial on its own because it will include UCL's arts, humanities and law department, not to mention the Slade School of Art and the Bartlett School of Architecture, the School of Slavonic and East European Studies and the Royal Free and University College Medical School. When that is combined with the Imperial brand, its science and maths departments, its business school and its three medical schools, you begin to see just how much excellence is being brought together.

Not everyone is happy about the prospect of a merger, of course. The unions fear the loss of jobs, with some justice. A justification for bringing institutions together is always the savings in administration, although this would not appear the main reason in this case.

Bringing homes of learning together also arouses deep suspicions from the academic staff, who resent the loss of individual prestige and freedom that bigger bureaucracies bring. The planned merger of Birmingham and Aston had eventually to be called off for precisely this reason. The traditions of Britain, especially in Oxford and Cambridge, are steeped in the smaller, cosier world of the cloistered community. It's the best way to excellence, goes the argument. Bigger in the world of the intellect rarely means better.

It's not the way of the world, however. In education, as in so much else, the big tend to get bigger while the medium-sized fade away. Increasing reliance on private funding, particularly for research, global competition for the best professors, and the need to attract the brightest students all tend in the American direction. We can't beat them unless we join them.

l.hodges@independent.co.uk