Revise and resubmit: consultants ordered to redo merger report

The consultancy firm responsible for a widely derided cost-benefit analysis of a contentious university merger proposal has been instructed to resubmit its work, after internet sleuths claimed to have found dozens of mistakes.

Western Australian tertiary education minister Tony Buti acknowledged “errors” in the Deloitte report and said the government had expressed its “anger and concern” to the consultancy. “It has been ordered…to go back, look at the data and reissue another report,” Buti told state parliament. “The fact remains that the case for the merger, which is only part of the tertiary reform, still remains solid.”

Deloitte has acknowledged “minor referencing errors” in the 219-page document. Shadow education minister Liam Staltari said the report repeatedly claimed that an amalgamation of the University of Western Australia (UWA) with Curtin and Murdoch universities offered the “largest benefit-cost ratio” of various merger options, even though the report’s summary showed that this assertion was “simply wrong”.

“It took literally five minutes to find that error,” Staltari told parliament. “Did anyone in the government actually check the full report before it was published?”

The Australian Financial Review reported that the state government planned to demand a partial refund for the report. Opposition leader Basil Zempilas said the entire cost, which he put at A$160,000 (£83,000), should be “refunded immediately”.

A critic who posts on Reddit under the username RareGuidance312 said his “extensive independent examination” of the report had uncovered apparent miscalculations and “methodological inconsistencies” as well as “clear AI-generated citation errors”.

Fellow UWA Reddit users identified additional mistakes and methodological shortcomings. One said the most glaring weakness was the finding that bringing universities together could produce a benefit-cost-ratio “in the 20s. That’s saying that for every A$1 spent, it returns A$20. Think about that. Your numbers are clearly…cooked if that’s your answer.”

RareGuidance312 subsequently issued an AI-generated critique listing dozens of claimed numerical discrepancies, calculation errors and basic typos in the report. “Consultant firms make…big money for these reports and providing ‘advice’ that is often tailored to effectively validating the outset goals,” he observed.

He also uncovered apparent copy-and-paste errors in the government’s announcement of the report’s release, in which a table summarising the projected benefits of the merger listed the same figures for research and international education – overstating the estimated economic returns by up to A$3.4 billion. The announcement was subsequently amended, he said.

Buti appeared on ABC Radio Perth to explain the government’s reasoning and take questions from listeners. He said students were receiving a “sub-par” education, completion rates were unacceptable, participation by non-urban students was extremely low and the flow of Western Australian students to eastern state universities was up to 15 times as much as the reverse flow.

Buti said local universities were failing to provide compulsory practical placements for nursing and teaching students. He said over 20 Perth university executives earned more than the state premier. Universities’ “warped spending priorities” are “not actually helping address the needs of our students and our staff”, he said.

“We believe that if we can increase the capacity of our university by economy of scale, reducing duplication, that we’ll have greater resources to put where we should be putting them. We’re asking people: have an open mind. Come on the journey. Let’s look at the business case. If the business case doesn’t stack up, there will be no merger.”

An analysis by University of Melbourne researchers Peter Woelert and Gwilym Croucher, published on the Future Campus news site, found that economies of scale benefited universities with up to 15,000 students but became “diseconomies of scale” beyond this “threshold size”. The proposed merger would create an institution with around 120,000 students.

A study of 31 past university mergers in Europe and Asia, conducted by Curtin University academics and published as a working paper, found no “robust” evidence of improved revenue, publications, completion rates or enrolments.

“The business case now in preparation should test its completion assumptions against past mergers, measure every benefit against universities that did not merge, and state the evidence for each benefit before the government commits to a merger whose costs Deloitte puts at [up to] A$680 million,” the paper concludes.

In 2023, Deloitte won a A$185 million contract to be “integration partner” of the merger that produced Adelaide University. Deloitte did not respond to a request for comment.

john.ross@timeshighereducation.com