How many universities would survive the Tories? (Guardian Online)

A revealing report by a rightwing thinktank ponders a cull, writes Donald MacLeod

Should universities be allowed to go bust? This provocative question is posed by Policy Exchange, the free-market thinktank linked to the Conservatives, in a world where the possibility of such failure has become frighteningly real.

Sink or Swim? Facing Up to Failing Universities is an interesting report, all the more interesting because if there is any thinking going about what a Tory government would do with universities – and it's hard to find out from David Cameron's tightlipped team – this is probably where it is being done.

So many will read the report with the question "Would a Conservative government let universities go bust?" at the back of their minds. In fact, the report is more about mergers than outright closures – there have been 27 since 1997 with little or no publicity.

As the authors, Anna Fazackerley and Julian Chant admit, the social and economic costs of a major university going under would be so great that a merger would inevitably be the preferred option. (Though how major is major?)

London with an "astonishing" 42 higher education institutions could be ripe for a cull, they suggest. This might take the form of private providers taking over all or part of an institution – you can see how popular Fazackerley, head of education at Policy Exchange, is going to be with the University and College Union.

But it's a sign of what the past year has done to free-market thinking that the report should recommend tougher regulation by the government funding body Hefce to suspend a university's grant and remove senior management if there is evidence of bungling. London Metropolitan's financial difficulties get a special mention as an example of how the current system of oversight has failed.