A competitive market in ÖйúAƬ cannot work in a country as small as Wales because there are too few universities to allow any to fail, according to the outgoing chief executive of the country's funding council.

Phil Gummett, who is retiring at the end of October, arrived at the ÖйúAƬ Funding Council for Wales in 2000 on what was supposed to be a secondment from the University of Manchester, where he was pro vice-chancellor.

It turned into a 12-year stint at the body, including eight years as chief executive, during which he oversaw one of the most tumultuous periods for Welsh universities in decades.

There have been concerns since the 1980s that Wales has too many universities for its size, but under Professor Gummett - and, since late 2009, the outspoken education minister Leighton Andrews - substantial consolidation has finally happened.

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"When I arrived in Wales ... there were 13 universities, plus The Open University and the [federal] University of Wales," Professor Gummett said.

Notwithstanding resistance to a merger from Cardiff Metropolitan University, HEFCW's recommendation that Wales should cut its number of universities to six is on track.

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A recent report by the ÖйúAƬ Policy Institute argued that there had been a waning of funding council powers in the devolved nations, replaced with direct control by ministers.

Professor Gummett countered that a "managed" approach is essential because a market will not work in Wales.

"You can talk in England about saying: 'Well, let the market determine which will be the successful universities and which will not.' You can lose a few," he said.

But in Wales such an outcome would not be a safe option, he argued.

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He also bemoaned the fact that a "managed" approach was seen as "peculiar" or "deviant" by commentators simply because it was not being done in England.

Professor Gummett's tenure also included the rise and abrupt cessation last October of the University of Wales' international validation business.

However, he argued that as the university - a legacy federal body with no campus - had not been in receipt of public funding for teaching, HEFCW had very little influence over its behaviour.

"In a way what we've had is a private provider," he said, but added that HEFCW had been "concerned and saying things quietly to various people".

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The controversies that unfolded were "distressing to watch", with patriotic "affection" for the university hindering action being taken, Professor Gummett added.

Some in Wales "still haven't really understood how serious some of these issues are and what the consequences have been for the reputation of Welsh universities within the UK and internationally - and in a way it shows how deep-rooted the sentiment runs".

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david.matthews@tsleducation.com.