Merger cost-benefit analysis slated as ‘nonsense’

The boss of a Perth University confronting a possible imposed merger has ridiculed a consultant’s report that promotes the potential union, amid claims of multiple errors and unchecked use of artificial intelligence.

Murdoch University vice-chancellor Andrew Deeks said some of the projected benefits of a merger of his institution with Curtin University and the University of Western Australia (UWA), outlined in Deloitte’s rapid cost-benefit analysis, were based on flawed logic and misunderstandings.

In an op-ed posted on Murdoch’s website, Deeks said Deloitte had assumed that undergraduates who had not completed their courses within six years would never finish.

“Murdoch…has a large proportion of mature-aged part-time students [who] balance work and caring responsibilities with their studies,” he writes. “These students may not finish within six years [but] they do finish. Why would the progress of these students accelerate [because] of a university merger?”

The report also projects improvements in research grant earnings per academic, Deeks said. “Grant capture is, to a large extent, an ability of the individual researchers and the teams of researchers,” he said. “Merging universities does not change the people.

“UWA is already doing better than all but one other university in Australia, because the university has long made research performance core to hiring decisions.”

Deeks also scoffed at suggestions that the merged institution could increase international earnings by halving the difference between tuition fees at UWA and the lesser amounts charged at the other two universities.

“How does the merged university operate with two different prices, potentially for the same courses?” Deeks asked. “Many international students are highly price sensitive,” he added. “Rather than go to a higher-priced, higher entry merged university, they will go elsewhere.”

Deeks said the projections were based on assumptions that “lesser performing universities” would “catch up with the top performing university”, on various measures, by 50 per cent.

“Why 50 per cent? Well, as a good consultant does, they took 30 per cent to be the low scenario, 70 per cent to be the high scenario, and 50 per cent to be the core scenario. Nice round numbers. You can see why they earn the big bucks.”

He said that it was “extraordinary” that the Western Australian Government “continues to be taken in by this nonsense”.

Deeks’ criticisms coincided with an Australian Financial Review report that the Deloitte analysis contained errors bearing “the hallmarks of artificial intelligence mistakes”. They included three citations that appeared to reference the wrong study authors, two report references that did not appear to reflect the contents of the cited studies, and one reference link that pointed to an “entirely different” journal article.

A Deloitte spokeswoman said “minor referencing errors” had been “identified and are being addressed. These do not affect the substantive findings of the cost-benefit analysis, which is based on publicly available university data.”

The analysis, which was presented to the government almost 11 months before its public release, contains a surprising number of typos given the time available to correct them. The word “Univeristy”, for example, occurs in six headings.

The report also says the proposed three-way merger would deliver the largest benefit-cost ratio of 15.5 under the most favourable scenario. It later says a two-way union of Murdoch and UWA would produce the highest benefit-cost-ratio of 27.

john.ross@timeshighereducation.com