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Table of Contents

An introduction to this guidance ..................................................................................................3 Background ................................................................................................................................................................ ......................... 4 Defining Mergers and Federations ............................................................................................................................................ 4 What are the distinguishing features of mergers and federations? ............................................................................ 5 Decision in principle to merge or federate ............................................................................................................................ 5 The role of the SFC in merger (or federation) ...................................................................................................................... 6 Support funding ................................................................................................................................................................ ................ 7 Post-merger evaluation ................................................................................................................................................................ . 7

The Merger Process .....................................................................................................................8 Key steps and milestones .............................................................................................................................................................. 8 Making the case for merger .......................................................................................................................................................... 9 Options appraisal .......................................................................................................................................................................... 10 Early discussions with staff and students ........................................................................................................................... 10 Agreement of the governing bodies ....................................................................................................................................... 11 Creation of a Partnership Board.............................................................................................................................................. 11 Make the case to Ministers ........................................................................................................................................................ 13 Appoint a project manager ........................................................................................................................................................ 13 Due diligence (financial and legal) ......................................................................................................................................... 14 Begin preparing the merger proposal, including the business case ....................................................................... 15 Consider and agree the model of merger ............................................................................................................................ 16 Begin discussions with the Scottish Government ............................................................................................................ 17 Consultation and ongoing communication ......................................................................................................................... 17 Discussions with the Office of the Scottish Charity Regulator .................................................................................... 18 Finalisation of merger proposal .............................................................................................................................................. 18 Pace of the development of the merger and associated change ................................................................................ 19 Merger implementation plan .................................................................................................................................................... 20 Development of new Board ....................................................................................................................................................... 20

Content of the merger proposal ................................................................................................. 21 Vision, aims and objectives ....................................................................................................................................................... 21 Options appraisal .......................................................................................................................................................................... 21 Evidence ................................................................................................................................................................ ............................ 21

Academic benefits ............................................................................................................................................................................... 21 Implications for tertiary education in Scotland ................................................................................................................... 21 Financial benefits ............................................................................................................................................................................... 22 Issues arising from consultation with ....................................................................................................................................... 22 Strategy ................................................................................................................................................................................................... 22 Governance and management ...................................................................................................................................................... 22 Business case ......................................................................................................................................................................................... 23

Culture and Leadership Issues .................................................................................................... 24 Importance of Culture and Leadership ................................................................................................................................ 24 The Behaviour of Institutional Leaders................................................................................................................................ 25 Leadership and Trust (change management strategies) .............................................................................................. 26 The Importance of Culture ........................................................................................................................................................ 27 Communication issues ................................................................................................................................................................ 28 Counterpart process ................................................................................................................................................................ ..... 32 Merger support .............................................................................................................................................................................. 32

Models of merger ...................................................................................................................... 34

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Introduction ..................................................................................................................................................................................... 34 The Models ................................................................................................................................................................ ....................... 34

Phoenix model ...................................................................................................................................................................................... 34 Host model ............................................................................................................................................................................................. 34

Key considerations ................................................................................................................................................................ ....... 35 Speed, and maintaining momentum ...................................................................................................................................... 36 Buy-in from Boards and staff .................................................................................................................................................... 37 Risks of the process being derailed........................................................................................................................................ 37 Conclusions ................................................................................................................................................................ ...................... 38

Table 1: Comparison of Host and Phoenix Models .............................................................................................................. 39

Partnership Agreement linked to creating a Partnership Board ................................................... 40

Example of Invitation to Tender for Due Diligence ...................................................................... 45 Financial due diligence: .............................................................................................................................................................. 45 Phase 1 ............................................................................................................................................................................................... 45 Phase 2 ............................................................................................................................................................................................... 46 Next step ................................................................................................................................................................ ........................... 46 Legal due diligence ................................................................................................................................................................ ....... 46 Requirement .................................................................................................................................................................................... 47

Example of Project Manager Recruitment advert ....................................................................... 48 Responsibilities and key requirements ................................................................................................................................ 48

Other Advice and Guidance for College Mergers ......................................................................... 50 NUS Scotland and sparqs ............................................................................................................................................................ 50 Scottish Qualifications Agency ................................................................................................................................................. 51 Care inspectorate for nursery re-registration ................................................................................................................... 53

Institutions that have merged/are merging ................................................................................ 54 Colleges ................................................................................................................................................................ .............................. 54 HEIs ................................................................................................................................................................................................ ..... 55 Tertiary institutions ................................................................................................................................................................ ..... 55 HEIs with merged departments .............................................................................................................................................. 55 Collaborations ................................................................................................................................................................ ................. 55

Index ......................................................................................................................................... 56

References and Bibliography ...................................................................................................... 58

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An introduction to this guidance

This guidance aims to support colleges throughout Scotland as they face the challenges of reform.

In particular, it provides advice and comment relating to mergers and federations and draws on

observations from the Audit Scotland publication “Learning the lessons of public body mergers -

Review of recent mergers and Good practice guide” 1.

However, the guidance in this document is broader, and gives more detailed advice in the context

of the education sector, than can be found in the Audit Scotland report.

First, it describes the formal and legal requirements that must be adhered to. It also provides

advice relating to due diligence procedures.

Second, it describes and provides advice on the process for leading up to merger or federation,

including advice on timescales for key tasks. It also suggests roles that require to be fulfilled by

those involved.

Third, it provides advice and comment on matters known to be critical for success, but which do not

feature in legal due diligence or formal process arrangements. This includes comment on

communications, trust, engagement and leadership.

This guidance will be updated as and when necessary to reflect developing practice. We will

regularly review the site, adding new features as and when appropriate and as and when demand is

clear.

Your feedback is important so let us know where you have used it or how it could be improved by

contacting Linda McLeod, email: lmcleod@sfc.ac.uk.

1 Specific attention is drawn to pages 14, 18 and 22 of this document covering financial and merger planning.

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Background

In the programme of structural change, as part of the Government’s post-16 reform agenda, the

Government and the SFC clearly welcome mergers where the colleges concerned agree they make

sense for the regions they serve.

From 2002 to 2011 there have been seven mergers involving colleges and HEIs in Scotland – five in

the college sector and two in the HE sector. From August 2012 to autumn 2013 there were a

further nine college mergers and one tertiary institution merger. See the full list here.

The Scottish Funding Council (SFC) has worked closely with colleges and universities both as they

move towards merger, and during the early implementation phase. SFC has gained knowledge and

understanding on key aspects of the merger process, particularly the formal aspects including the

financial, legal and technical requirements. In addition there are other key elements that are

crucial to success of the merger including the cultural, communication and people issues. Many of

the requirements and processes to develop and implement a federal model will be similar and are

referred to in this guidance.

In addition to SFC support, throughout 2012-13 and 2013-14 the college sector will also be able to

call on facilitation and other forms of support from the Scottish Government’s Change Team.

Defining Mergers and Federations

It may be helpful to clarify what we mean and do not mean by the terms merger and federation.

Mergers are not takeovers. Takeovers imply that amongst two or more organisations, one is the

wholly dominant body, and subsumes the other organisation(s) within it. No new body is created.

Mergers on the other hand create a new single body built upon the voluntary coming together of

existing bodies.

Even where mergers are taken forward on the basis of a host model, it typically involves the

drawing in of best practice from the range of organisations coming together to merge into the one

new entity.

We can similarly contrast federations and cooperation models. Cooperation and coordination are

positive relationships amongst wholly independent organisations that set their own priorities and

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choose when and when not to deal with others. Federations involve much more than mere

cooperation or coordination. They involve a central strategy and resource allocation to which all

organisations are bound, and involve shared decision making, and shared operations. Individual

organisations in a federation do not have the freedom to choose when and when not to cooperate

and coordinate. Neither do they have the option to leave the federation except in a fundamental

reorganisation after due process.

Robust federations are likely to be seen by the SFC and Government as valid responses where they

create structures that can effectively deliver regional outcome agreements.

What are the distinguishing features of mergers and federations?

Firstly, the most obvious distinguishing characteristic is at top-level decision making. In federations,

it is typical to find decision making involving peer groups, selected on the basis of rank and to be

representative of all federated organisations. Thus there may be a Principals group, a finance

group, a curriculum group and a shared services group as a very minimum. In merged

organisations, there is clearer central authority and it is more likely to find groups mobilized by

expertise rather than by representativeness.

Secondly, where partners in federations may have particular strengths in focusing on their

immediate local communities and markets, merged organisations are likely to have particular

strengths in taking a consistent regional view

Thirdly, mergers make it easier to realize economies of scale, whereas federations may enjoy a

wider variety of methods of working.

All organisation types rely on having strong bonds of trust for effective operation, but federations in

particular rely on very strong bonds of trust amongst senior personnel to enable federal decision

making to work.

Decision in principle to merge or federate

We strongly urge colleges that intend to merge or federate to take a clear ‘in principle’ decision

early in the process rather than continue to explore options for too lengthy a period. By doing so

the colleges will be giving a clear signal to staff, students and other stakeholders of the direction

they are seeking to go in. In the past, public funds have been invested in the exploration of

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proposed mergers, only to see one or more partners walk away from the proposal at a late stage in

the process and public funds already invested in the process were irrecoverable.

A decision in principle should be made at an early stage, after which colleges would be held

responsible for the use of any public funds invested in preparation for merger (or federation). If

any partner walked away without the support of strong evidence, such as unforeseen financial

problems arising from an external due diligence process, a claw back arrangement would be put

into force by the SFC.

In current circumstances, the decision in principle will be considered to be the point at which

transformation or strategic funds are agreed to support merger or federation. SFC will consider

whether a claw back is required from any institution(s) where there is no clear evidence for a

change of decision.

The role of the SFC in merger (or federation)

SFC recommends that institutions approach its executive early and informally in the first instance to

discuss the merger or federation process and timescales. SFC can provide general guidance on

federation requirements, models for merger, developing a proposal, timescales, funding,

governance issues, communication and consultation, and advice on any issues that could have an

impact on the outcome of the proposed federation or merger. See here for the merger process.

SFC may also be able to provide strategic funding to support the merger process and merger

implementation.

During the early stages of developing a proposal for merger or federation the SFC will work directly

with the senior managers and boards of management/governors of institutions to provide advice

and support as they develop their proposal.

Later in the process, once the Boards/Governors have submitted their proposal to merge or

federate to Ministers, the SFC has a more formal role. At this point Ministers will ask SFC for its

advice. Ministers will make a decision based on this advice and other consultations.

SFC also has a formal role six months post Vesting Day and also two years afterwards when

Ministers request a post-merger evaluation.

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Support funding

SFC may be able to provide strategic funding to support institutions through some of the necessary

steps required to achieve merger or a strong federation. In the past this has been separated into

pre-merger “enabling” funding and merger implementation funding (to deliver and implement the

merger following a formal decision from Ministers). This should be discussed at an early stage with

SFC.

Recent experience suggests there are advantages to be gained by taking some important actions

prior to Vesting Day (or prior to the final establishment of a strong federation). This most

noticeably includes institutions enacting any required voluntary severance or voluntary redundancy

schemes as soon as funds are made available. Typically, this will involve the use of some reserve

funds and also SFC transition or strategic funds. Early consideration of the proposed staffing

structure for the new institution is required, to ensure that decisions on applications for voluntary

severance are prudent and will realise savings rather than incur replacement costs.

By undertaking such actions at an early stage, there will be efficiency savings gained much earlier in

the process. It will also ease the process of restructuring.

Post-merger evaluation

SFC is asked to prepare a post-merger evaluation around six months after Vesting Day, and a more

formal one after two years and report to the Cabinet Secretary. This will include evaluation of costs

incurred and savings realised. The SFC is advised by its committees in its merger work. The SFC

executive will keep partners up-to-date on processes and procedures.

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The Merger Process

Key steps and milestones

Day one of merger implementation or Vesting Day is the formal date that partners become one

institution. Some of what is required to implement a merger, or create the right conditions for

merger, will happen before this date but some of the work can only happen after day one.

Federations may not have a Vesting Day as such, but will have a date by which they will be

recognised as a fully functioning federation. This will be agreed with key stakeholders.

This section considers the key steps and milestones in the merger process required to develop a

merger proposal for two or more institutions. (Many of these steps will also have an equivalent in

developing a federation.) It also includes information related to merger implementation but there

is much more that needs to be done on the ground with operational teams than is covered in this

guidance. In the merger process there are some things that can only happen after another step or

activity has been completed but many of the activities can and do happen concurrently. The

following are not in a specified running order and from the SFC experience of previous mergers

many of these may overlap or run in parallel.

• Making the case for merger

• Options appraisal

• Early discussions with staff and students and also moving forward

• Agreement of the governing bodies

• Create a Partnership Board with a Partnership Agreement (including staff and student

representation)

• Appoint a project manager

• Due diligence (financial and legal)

• Begin preparing the merger proposal, including business case

• Consider and agree the model of merger

• Begin discussions with the Scottish Government

• Consultation and ongoing communication

• Discussion with the Office of the Scottish Charity Regulator (OSCR)

• Finalise the merger proposal document, including the business case, and submit

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• Merger implementation plan

• Development of new Board

Each of these activities is covered in more detail. In addition as part of the merger process aspects

of culture in the existing institutions should be considered being mindful of how this can be

developed for the success of the new institution. Some culture and leadership issues are covered

later on in this document. Making the case for merger

Institutions should give careful and early consideration to the benefits of merger or a federation,

particularly how it will deliver for its key stakeholders within the changing environment for post-16

education in Scotland. They will require a strong evidence base in the proposal itself. Challenges to

the merger or federation are likely to emerge early if the case is not clearly articulated.

The issues that should be considered include the following:

• Reduced complexity of the local landscape for learners and other stakeholders;

• Delivery on government guarantees for particular groups of learners;

• Better use (value for money) from existing facilities, expertise and capabilities of institutions;

• Cost savings and efficiencies that can be achieved;

• Benefits of scale;

• Focus on front-line delivery;

• Improved provision and progression opportunities for learners;

• Breadth of core access level provision while maintaining current and agreed specialisms;

• Renewed enthusiasm and commitment of staff;

• Creating a culture supportive of change and innovation;

• Improved student engagement; and

• Improved governance.

Those college regions choosing to establish a federation will be expected to address all of the above

with the same rigour as is expected by proposed mergers. The LSN reportiUnderstanding FE Mergers noted that it is important for merger partners to develop

a shared strategic vision as early as possible and that it is also important to talk in terms of creating

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a new college at an early stage. This emphasizes the importance of cultural issues addressed

elsewhere in this guidance.

Options appraisal

Whether considering full merger or a federal model, institutions need to demonstrate how they

reached a position on preferred partners and course of action. In some cases there may be a range

of possible partners, while for others there may be only one.

Previously institutions may have taken a lengthy period to undertake an options appraisal to

determine the likely suitability and potential success of merging with different partners. In the

current context of post-16 education and the regional agenda for college provision and funding it is

likely that there will be a clearer picture on appropriate partners. Local circumstances may

indicate the obvious partner(s) to pursue.

It is still advisable that an options appraisal is completed and the outcome clearly noted in the

merger proposal. It is equally acceptable for the options appraisal to be completed by the

institutions themselves or by an independent appraiser. Where options are very limited and clear,

there is no need to spend public money on an independent appraiser. The key is that it should be

robust and consider a full range of options, including the status quo. In exceptional circumstances a

fuller options appraisal may be required. The SFC executive will discuss this with institutions.

Early discussions with staff and students

The change process and structure change required to reach Vesting Day and beyond, and to

implement the merger successfully, is challenging. Using open and clear dialogue early in the

process and adopting an honest approach with staff will help staff develop trust in the process.

Senior management should be sensitive to differences amongst merging or federating institutions

and look to integrate staff quickly into a shared understanding of the new institution. A key aim is

to create a sense of shared ownership of the success of the new institution.

The Student Engagement strategy for the new college will need to be developed. It is important

that the Students’ Associations are part of its development in order to ensure that the college is

able to take advantage of the added value they can offer, and to ensure all student engagement

methods work in partnership together. In AY 2013-14 advice and support for this process can

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continue to be accessed through Partnerships for Change, who can also assist in facilitating these

planning sessions. SFC has funded this activity to support student activity in the merger process.

It is important to engage early with national and college based representatives of recognised trades

unions. Communication and consultation are key, particularly across campuses.

It is also important to consider how to minimise the risk of merger preparation distracting from or

impacting negatively on services. In considering the challenges in preparing for merger it might be

useful to differentiate responsibilities so that there is simultaneous focus on merger preparation

and ensuring “business as usual”. Merger or any structural change poses challenges for students

and staff but provides an ideal opportunity to approach this strategically and ensure students are at

the centre of the process in shaping the future of the new institution and developing appropriate

strategies.

NUS Scotland has developed guidance for students’ associations and student representatives

whose institutions are moving forward with merger or federation. We strongly suggest that this

advice is taken.

Agreement of the governing bodies

Having looked carefully at the case for merger or federation at an early stage, the governing bodies

will have to give their agreement to developing proposals. An initial agreement in principle to

merge/federate may be given by boards subject to the outcomes of an appropriate due diligence

exercise.

Creation of a Partnership Board

Following recent good practice, SFC recommends that once college Boards have indicated their

agreement to merge then the colleges should establish a joint committee, empowered by the

respective boards and including representatives from each college.

This committee would be known as a Partnership Board. It would have appropriate and significant

authority to work towards agreeing the merger proposal. A Partnership Board would rely on good

will from the members to allocate the time necessary to make this arrangement successful.

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As a minimum requirement SFC recommends that the Partnership Board includes the Chair and

Principals of each college, an additional board member from each college and at least one staff

representative and one student representative.

The Partnership Board should help the colleges take the necessary decisions and oversee actions to

move them towards merger. SFC recommends that individual college Boards delegate authority to

the Partnership Board to:

• Govern the development of a merger proposal and recommendations for implementation;

• Employ a project manager to support the merger process;

• Progress appointment of Principal Designate and senior management team for the new

institution;

• Oversee the preparation of the merger proposal document;

• Consult internally and externally on the merger;

• Oversee the due diligence exercise;

• Prepare a funding proposal to request funds from SFC for the pre-merger phase;

• Develop, in principle, proposed terms and conditions of employment; and

• Make any prospective interim appointments.

At this point in recent mergers in the college sector, boards of management have delegated

responsibility to a Partnership Board to take decisions on their behalf and oversee the merger

process, up to the point that a Shadow Board or new Board, from Vesting Day, is in place.

A Partnership Board Agreement

An accepted Partnership Agreement provides the terms and conditions within which this

Partnership Board may operate. This allows the boards of the colleges to continue to focus on the

governance of the individual institutions while the merger proposal and associated processes are

progressed. For further details about setting up such an agreement and for a Partnership Board see

Partnership Agreement linked to creating a Partnership Board.

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Make the case to Ministers

One of the final stages of a merger is to formally make the case to Ministers. This is done once due

diligence and consultation are complete. The governing bodies will have to agree and endorse the

merger or federation proposal prior to submitting it to Ministers. This is in effect the final decision

by the boards on whether to merger or not. The proposal should demonstrate the clear

commitment of the governing bodies of the institutions to merge or federate, as well as including a

formal statement from the governing bodies to show that they understand and accept the

governance arrangements and responsibilities of the new governing body. If Ministers approve the

merger or federation, responsibility for the subsequent academic development and financial

accountability and sustainability of a merged institution will ultimately lie with a single governing

body.

A proposal to pursue a federation will also require the governing bodies to confirm their

commitment to the principles of the federation and include a statement to confirm their

understanding of the new governance arrangements.

Appoint a project manager

Effective project management is essential to achieving a successful merger. Institutions are advised

to appoint a dedicated project manager early in the process, preferably one who is able to operate

independently from each partner institution. The project manager should be the vital link between

internal working groups, set up to define and develop key aspects of how the merger will be

implemented (including curriculum delivery, integrated IT systems, HR issues and

marketing/branding), and the executive group of senior managers. They will also support the

senior managers to ensure that the requirements of a Shadow Board or Partnership Board are

comprehensively addressed, and coherent advice is provided.

The project manager may have a lead role in developing the business case as well as preparing the

content of the merger proposal. In addition they will provide a pivotal link between the senior

management team(s) involved A clear set of milestones should be established early on for the

project, and an action plan developed.

Here is an example of Project Manager Recruitment advert with responsibilities and key

requirements.

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Due diligence (financial and legal)

Once the institutions have decided on their preferred course of actions it is recommended that they

complete their own initial financial appraisal.

The decision to merge should be informed by a detailed risk analysis. The risk analysis will be

informed by a review of the prospective partners, referred to as due diligence. This exercise builds

the knowledge base that each of the merging partners has about the other and should help to build

trust. It is important to know if there are any ‘deal breakers’ that could lead to a challenge to the

merger progressing.

Equally it is important that the boards have acted appropriately in a merger or federation scenario

and explored all known risks and opportunities before reaching a decision. Due diligence generally

refers to financial due diligence but boards will also need to consider legal (and property) due

diligence. Appropriate external, independent financial and legal advisors should be appointed to

carry out this work.

It is common for both parties to jointly appoint an advisor (one for financial and one for legal) to

report on each entity and on the viability of merged entity. In some circumstances institutions may

seek to pursue their own due diligence exercise on the other party or parties. Where this is likely to

cost more than appointing a single advisor for all merging colleges, the SFC will want to consider

carefully the case for the additional investment.

What will the legal and financial due diligence include?

The financial due diligence exercise will include a review of the following:

• History and activities of the college

• Accounting policies

• Audit issues

• Financial accounting and control systems

• Financial performance

• Consideration of assets and liabilities

• Cash flows

• Taxation

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• Pensions and pension accounting

• Risk management

• Post-merger financial and operational planning

The legal due diligence exercise will report on the legal affairs of the college and will include:

• A review of leases and title deeds held

• A review of any ongoing litigation

• A review of staff terms and conditions

• TUPE considerations

• Intellectual property rights

• Insurance

• Health and safety considerations

• Consents

• Corporate structure

At the link is an example of Invitation to Tender for Due Diligence.

Whilst the themes above would form part of any legal and financial due diligence exercise,

consideration should also be given to undertaking a culture review at an early stage. The existing

culture that partner organisations bring to the new institution will have a considerable impact on its

success.

Begin preparing the merger proposal, including the business case

The proposal is the document that provides the case for merger and the evidence of what the new

institution will deliver and how it will get there. It should contain clear aims and objectives and the

necessary steps and timescale for implementation.

The merger proposal should consist of a single document. The content of the proposal will vary

according to the type of institutions proposing merger. It should normally cover the following

areas:

• Vision, aims and objectives

• Options appraisal

• Evidence to support the merger including:

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- academic benefits

- financial benefits

- the implications for tertiary education in Scotland, and

- issues arising from consultation

• Strategy/strategic direction

• Governance and management

• Business case

Each of these areas are covered in further detail in the section on content of the merger proposal.

Consider and agree the model of merger

Decisions on college mergers are ultimately for Ministers, whose job it also is to promote the

necessary legislation. If your college is thinking about merger, please contact the Scottish

Government Change Team [Melanie Weldon: melanie.weldon@scotland.gsi.gov.uk] at as early a

stage as possible to discuss this further.

This section of the guidance will be kept under regular review, and any changes will be notified to

all relevant parties.

A host model is where one of the existing institutions remains an entity and transforms itself into

the new college. There may however be circumstances where another model may be more

appropriate, and as stated above early discussions with the Scottish Government may be helpful.

The SFC advises that a “host” model is a simple transition but what is more important is that the

new institution is a new entity in terms of it culture, name and vision for the future. Some mergers

have adopted the term “fusion” model to describe what is essentially still a host model but with an

emphasis very much on a new and dynamic institution. This combines many of the characteristics

of a phoenix model, in that there is very clearly a new entity created, with the technical aspects of a

host model in that the legal vehicle of one of the colleges is used.

The SFC has prepared advice on models of merger for earlier mergers.

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Begin discussions with the Scottish Government

It is helpful for colleges to formalise their intentions with the Scottish Government and to involve

government colleagues at an early stage in any regional discussions. This is particularly useful in

ensuring that early planning is done for the statutory instruments that will need to be prepared to

effect the merger. They may be invited to the Partnership Board meeting or other designated

meetings as appropriate.

Consultation and ongoing communication

Colleges seeking to merge or federate will need to undertake their own formal consultation with

staff and students and stakeholders early in the merger discussions. It is vital to the success of a

merger or federation. It is usual to allocate a period of 12 weeks for this consultation process. The

timing for this exercise is important. Some groups of colleges seeking to merge or federate have

also held a consultation event as part of the process.

A very specific matter which should be taken into account is The Transfer of Undertakings

(Protection of Employment) Regulations 2006 and the consultation obligations that this imposes.

Although we recommend that the colleges move forward with an early formal consultation process

we also suggest that they develop an ongoing communication and engagement strategy (one for

internal and one for external stakeholders). Learning from previous mergers SFC suggests that

colleges seek additional communications expertise to provide support. It might include

opportunities for staff at different colleges to meet each other, visit the other college(s), Forums,

Blogs and to meet with the Principals. Similarly, opportunities for staff to meet each other

throughout the process will assist with building up a new culture and reduce feelings of mis-trust.

The more staff feel some ownership of this process the more likely it is to be successful. Ongoing

internal communication will allow the flow of information from staff and students to continue and

will create further engagement opportunities. Experience from past mergers suggests that internal

communications are only as good as the last communication provided and as such it is vital to

ensure that communications are constantly updated, particularly if there are delays in certain

processes.

SFC also recommends that:

• Staff and student representatives are invited to join the Partnership Board;

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• The work of the Partnership Board is kept as open and transparent as possible and included

regular communications updates to staff on progress;

• Colleges invite their staff and student representatives to contribute to the development of

the staff communication and engagement strategy and the student strategy;

• Colleges provide regular and consistent opportunities for staff and students to speak to the

Principals about the merger proposal and its impacts;

• Staff and students are involved in the development of the merger proposal; and

• Staff and students are involved in agreeing what needs to be in place for Vesting Day.

At some point the Scottish Government will consult on the merger. Further details on the precise

nature of the consultation can best be dealt with by direct discussions with government officials.

Further pointers to good communication and practice can be found at Communication issues. The name and the brand

The name of the college is crucial from both an internal and external perspective. Stakeholders and

local communities may have particular views on the potential impact of any name change.

Discussions with the Office of the Scottish Charity Regulator

As registered charities, colleges are required to apply to the Office of the Scottish Charity Regulator

for consent on merger and to change the name. Consent from OSCR must be given prior to the

merger taking place.

Following the merger, the relevant colleges will need to apply to OSCR (www.oscr.org.uk ) to wind

up.

Finalisation of merger proposal

A detailed summary of what should be in the proposal can be viewed in the section on Content of

the merger or federation proposal.

Once the merger proposal has been agreed by each of the individual governing bodies then the

institutions send the formal merger proposal to the Scottish Government and Cabinet Secretary

(and provide the SFC with copies and an electronic version of the proposal) who in turn will seek

formal advice from SFC. At this point the Government may also begin their own consultation

process (which can take up to 12 weeks) with key stakeholders. In some cases this consultation

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may begin prior to the formal submission of the proposal where there is a clear rationale to do so.

Given the significant effect which the Government's need to consult will have on a merger

timescale, it is strongly recommended to speak to the relevant Government officials at an early

stage to clarify how long it will take.

At this point the Chair of the SFC will agree a small team, including executive and a Council

member, to visit the institution to discuss the proposal with key groups including board members

(governors) senior managers, staff (teaching and support ) and students. Following the visit the

team prepares a report and advises the SFC. The SFC in turn provides a report to advise Ministers.

Ministers will notify their decision to the institutions concerned and also write to the Chair of the

SFC, to inform the Council of the decision. The statutory instrument(s) laid before Parliament to

amend schedule 2 to the Further and Higher Education (Scotland) Act 2005 (The Act), to close

institution(s) and make any changes necessary to governance instruments;

The Terms of Reference of the new college should be agreed and be available at the point of

merger. These should have been agreed in good time. Pace of the development of the merger and associated change

It is important to understand that the pace of development and progress will vary at different

stages of the merger process. In the early stages of discussion and development of the merger

proposal it is likely that the pace of progress will be quite steady, but once the proposal has been

sent to Ministers the pace of change across the colleges will speed up. Staff need to be aware of

this likelihood and when extra efforts may be required to keep staff and students up-to-date and

involved regarding the merger requirements.

Based on previous experience the whole process outlined above is likely to take around a year as a

minimum to complete in straightforward mergers, in some cases longer depending on the level of

complexity of the merger

As yet, there is no experience of establishing federations, but given they will involve less complexity

than mergers in a number of key areas, it is anticipated that federations can be more quickly

established.

20

Merger implementation plan

The LSN report Understanding FE mergersii notes that during interviews one of the most commonly

identified difficulties with merger was the paradox that planning should start as early as possible –

but no one has full authority to implement decisions until after the merger date.

A clear plan for merger implementation should be part of the merger proposal document. This

should also include how and when the colleges will make savings and efficiencies.

This should include action well beyond Vesting Day recognising that much work on the

development of culture and staff and student integration will happen as part of ongoing leadership

of the new college.

Development of new Board

The new Board will form on Vesting Day. The guidance on the appointment of the Chair,

appointment of Board members with recommended numbers are set out in Section six of the Post-

16 Education (Scotland) Act 2013. This Act is likely to come into force in April 2014.

http://www.legislation.gov.uk/asp/2013/12/pdfs/asp_20130012_en.pdf

21

Content of the merger proposal

Vision, aims and objectives

This section should consider:

• Why the institutions are proposing merger and what purpose it will serve;

• The overall vision and objectives of merger, including the educational benefits envisaged;

and

• How the proposal relates to the institutions’ strategic plans.

Options appraisal

This section should demonstrate how the institutions have arrived at their preferred course of

action. If a formal options appraisal has been carried out the institutions should include a resume

of the partners and choices considered, and indicate why a particular option was preferred.

Evidence

SFC needs to understand the evidence in support of the merger proposal. The following should be

available and covered:

Academic benefits

• The quality, relevance, efficiency of provision in teaching, research and knowledge transfer,

where applicable, will be safeguarded/enhanced;

• The quality of the student experience will be at least maintained or enhanced;

• The range/breadth of provision and qualifications will be appropriate to meet the needs of

learners, stakeholders and the economy; and

• The specialist facilities and profile will be safeguarded/enhanced. Implications for tertiary education in Scotland

• The fit to local/regional/national and international needs;

• Other benefits such as improved student access;

• Location of proposed campus(es)/sites appropriate to meet needs;

• Accountability to stakeholders (local/national) provided for; and

• Impact on other institutions, community learning and development, other providers and

local authorities (local/national).

22

Financial benefits

• A detailed financial plan assessing the financial implications of merger (i.e. one-off costs

required to facilitate merger, future recurrent costs/income of the merged institution,

resources released, opportunities to grow the business and any savings expected);

• Improved value-for-money;

• Efficiencies;

• Impact on financial health of partners;

• Space utilisation/quality of premises no less adequate or enhanced;

• Changes in expenditure distribution (research, teaching, support, premises, management)

expected; and

• Impact on institutions of not proceeding. Issues arising from consultation with

• Students;

• Trades unions;

• Staff (including terms and conditions);

• Local communities: and

• Other stakeholders and providers (schools, institutions, community learning and

development etc.). Strategy

This section should address the merged institution’s broad intentions for:

• Achieving overall efficiencies within the college sector;

• The learning and teaching, and research and knowledge transfer strategy;

• Staffing issues: including restructuring plans, harmonisation of terms and conditions;

• Student issues: integration of student representation, projected student numbers;

• Estates issues: including an options appraisal discussing all reasonable options for future use

of the existing estates; and

• Intentions for systems integration, including ICT.

Governance and management

This section should include:

• The proposed title of merged institution, where agreed;

23

• The intended management arrangements for the merger and beyond and a timescale to

achieve this;

• The intended communications arrangements, both internal and external up to and following

date of merger;

• A proposed implementation timetable;

• A risk assessment to cover all aspects of the merger, including a contingency plan;

• The key measures of success through which the new institution can judge whether the

merger has been successful; and

• The funding required to facilitate the merger, including a proposal for a grant from SFC

where necessary.

Business case

The Business Case should set out the proposals for ensuring that the merged college is financially

sustainable. It should:

• Provide a narrative outline of the Base Case merger scenario (what happens and when),

including consideration of the inputs and key assumptions used when developing the Base

Case financial model. The latest financial forecast return should be used as the starting

point for any financial model.

• Summarise the expected financial effect of the merger process and subsequent operation of

the college for the next five academic years, including forecast financial information

covering income & expenditure, balance sheet and cash flow out-turns supporting the Base

Case narrative, which can be used post-merger to measure performance against.

• Provide a guide to the scale of activity and the full costs and realistic savings that should

occur if management actions are undertaken as planned, and the timescales within which

the costs and savings will occur.

• Make a clear distinction between merger related savings and those resulting from other

actions.

• Consider the major risks to the achievement of the Base Case and actions that could be

taken to mitigate the financial effects of the risks.

• Consider alternative scenarios that may arise and the key financial and economic

sensitivities.

24

Culture and Leadership Issues

Mergers or the formation of college federations, are both major types of organisation change.

There is a substantial body of research, as well as considerable experience from previous college

mergers in Scotland, which claims that the vital issues in ensuring change is effective include a

range of cultural and leadership matters.

There is no common approach or common methods that must be adhered to. The context of the

merging or federating colleges must be considered, and approaches must be adapted to local

circumstances. That said there are a range of points that can be made, and that should be

attended to, as the process of merger or federation is taken forward.

Importance of Culture and Leadership

A considerable body of research and experience leads to the conclusion that colleges must ensure a

strong focus is placed on aspects of culture and leadership throughout the process of change.

Kavanagh and Ashkanasyiii, make the following crucial point about mergers:

“Our results suggest that changing an organization boils down to directing energy and effort

towards four identifiable aspects of organisational life:

1. The behaviour of institutional leaders;

2. The selection and execution of appropriate management strategies (particularly change

management strategies);

3. An understanding of the organization’s basic structure, systems and formal processes

(culture); and

4. Actions taken by leaders affecting acceptance of change by individuals who play key roles in

both formal and informal system”.

Let us consider some of these matters.

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The Behaviour of Institutional Leaders

There are a number of levels of leadership that must be effectively mobilised during mergers or the

creation of federations. These include, but may not be confined to:

• The College Board

• The Principal

• The Senior Management Team

• Other Managers

All leaders must ensure that at all times their words and deeds are designed to serve the interests

of the planned new merger or federated group of colleges. This will involve setting to one side, and

being seen to set aside, personal interests. This requires absolute focus on the vision and values of

the “new” college with clear, unambiguous, consistent messages which focus on the future. Whilst

the past is the legacy brought to the new college this should not overshadow messages on the

vision for the new college and what it seeks to deliver.

Furthermore, in the past there have been too many examples of inter-board and inter-principal

conflict leading to time delays and poor decision making.

There have been examples of such conflicts, rather than sound educational or business reasons,

leading to a breakdown in merger plans. Such cases wasted significant public funds.

Mulliniv, in his review of the City of Glasgow College merger, made the following recommendation

regarding how potentially difficult situations may be supported:

“For large complex mergers, and mergers where relationship issues amongst existing boards

and/or principals are known to exist, senior and expert facilitation of the process should be

introduced”.

SFC will support requests for leadership facilitation services. Requests can be made through the

SFC Outcome Agreement Managers, contact details on the SFC website.

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Leadership and Trust (change management strategies)

Research literature recognises trust as of fundamental cultural importance to organisations. Where

change is being addressed K.A. April’sv view that,

“Where trust is high, change is managed more effectively and, where it is low,

communication and cooperation suffer and there is an increased tendency to resort to

power” effectively summarises many merger experiences.

Effective leadership therefore includes ensuring trust is built within the organisation. Trust is

enhanced in organisations with a strong ethical foundation. All those in leadership positions should

therefore adopt, and be seen to adopt, good ethical standards of behaviour. In practical terms,

these behaviours will include:

• Dealing with the public, staff, clients, and board members in a fair and straight forward

manner.

• Fostering positive working relationships amongst board members, staff, students and

stakeholders.

• Respecting the rights of all individuals.

• Fostering a culture characterised by trust, openness and respect.

• Avoiding conflicts of interest, including direct and indirect gains which could accrue to the

individual as a result of actions or decisions. Examples of potential conflict of interest

include:

o A board member or senior staff making decisions motivated by considerations other

than the “best interests of the organisation”

o A close family member or friend personally contracting with the organization

o A board member or senior staff assisting a third party in their dealings with the

organisation, where such assistance could result in preferential treatment being

granted the third party.

o A board member or senior staff receiving gifts or loans from the organisation

Put simply, do the right thing and be seen to do the right thing.

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The Importance of Culture

Merger experience in the FE sector in Scotland, England and Northern Ireland, points to issues of

cultural impact being broader than Kavanagh and Ashkanasy’svi understanding of culture quoted

earlier.

Conlonvii in a major review of recent mergers in Northern Ireland, argued that,

“A common issue brought up by all the college directors interviewed was the challenge of

legacy- the pre-existing cultural morals of the previous colleges. Each organisation comes

into the merger with its own identity, history, culture and values. Merging these, at times

disparate cultures, can be one of the greatest challenges for a new college. The cultural

context has the power to change how communication is received and understood.

Navigating and understanding this cultural context has proved vital in all colleges studies:

where at times it has been ignored problems have occurred”.

These findings in the specific case of mergers in the FE sector in Northern Ireland, exactly mirrors

wider researchviii. Broadly speaking, it has been estimated that close to 70% of all major

organisational change initiatives fail to meet all of their aims, and the main reasons are ascribed to

failure to take account of cultural issues and related communication needs. Undertaking some

form of culture audit as part of the pre- merger preparation will provide a basis for understanding

challenges and development future plans. Conlonix details the experience of organisation members

and their reactions to change in the following.

“It has been long recognised that undergoing major organisational change is akin to going

through the grief cycle: change signifies a loss of what went before. All the directors

interviewed for this report identified that dealing with the emotional fall out of the merger

was possibly the greatest challenge they faced. There are a number of areas that staff

members identified feelings of loss in:

Status; Role; Identity; Quality; Collaboration; Time; Communication; Motivation; Certainty,

and Knowledge.

Communicating positively during a time when many are feeling a loss is a real challenge

during a merger situation.”

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In the recent past, City of Glasgow College and the land-based colleges have undertaken culture

studies prior to merger to assess a range of cultural features. Such studies have the benefit of

engaging the whole organisation in thinking about organisational features both positive and

negative, and creating yet another engagement opportunity for staff and students.

Where such formal studies do not take place, it will be necessary for leaders to ensure they have

processes in place to capture and take account of cultural requirements. It would be best if

processes being adopted enabled effective engagement of staff.

When seeking merger or federation, organisations should consider how best to capture and deal

with variations in culture.

Communication issues

Sengex in referring to communication during major change provides instructive comment that is

relevant to all staff involved in merger or federation processes:

“It is important to help them see that the story you are telling is ‘’on their side’’ and

therefore worth listening to. It need not align perfectly with their point of view. But it needs

to show that their point of view is treated fairly, and that they are not cast as an outsider.”

In general, good practice suggests that during times of considerable organisational change there

needs to be:

• An increase in the amount of communication.

• A focus on producing accurate and high quality communications.

• The use of multiple channels of communication to accommodate a range of personal

preferences and which encourage engagement, development of productive relationships

and commitment to the vision.

• Repetition and explanation of key messages.

• A common approach to communication across all merging or federating institutions.

• Horizontal as well as vertical (both downward and upward) communication.

There is no one formula for achieving the above six elements, but the following describes

approaches that may have a part to play.

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An increase in the amount of communication

Successful organisational change programmes will often establish additional types of

communication to support the change process. This could involve a change newsletter for all staff

distributed at regular intervals, establishing a change area within a website, regular email messages

explaining what has happened and so forth. Basically, increasing the amount of communication

usually involves both increasing the frequency of regular communications and introducing new

communication vehicles.

A focus on producing accurate and high quality communications.

Communicating about change should involve all those personnel with specialist knowledge.

Messages should not be entrusted to a general manager or to a communications specialist alone.

For example, communications about targets, timelines, progress and such matters should be

reviewed by the project manager, communications about HR issues should be reviewed by the HR

manager and so forth. It is very important to ensure communications are clear and accurate.

The use of multiple channels of communication to accommodate a range of personal preferences.

It is very important to ensure that messages about change and progress are relayed via appropriate

channels. This will often involve using multiple channels. For example, specialist websites, email,

question and answer sites, blogs, memos, posters, large group briefings, small group briefings, and

personal contact.

For example, the Mullinxi review of the City of Glasgow College merger process stated that,

“A considerable effort was made to use a wide variety of communication channels to keep

staff informed of merger issues. This included regular briefing from the Principal Designate

both in written and oral form, the appointment of communication facilitators to collate and

address questions and so forth.”

Repetition and explanation of key messages.

Too often at times of change, important messages may only have been transmitted on one

occasion, but with an expectation that everyone will receive them as intended. This will not

happen. The most important messages, such as around structure change, change in roles, change

30

in major procedures and similar areas that affect both the effectiveness of the organisation and the

working arrangements for staff, need careful and repeated transmission.

Associated with accurately describing change, it is important to at least answer the question – Why

is this being done? If an explanation is not given, a motive will be interpreted by the message

recipient. During times of change, turbulence and stress, individuals are more likely to assume the

worst, unless matters are explained to the contrary. Remember, it is not the fault of staff if they

interpret matters incorrectly – it is likely to be because matters were not transmitted and explained

properly.

It is critical to ensure that key message are regularly transmitted, re-enforced and explained.

A common approach to communication across all merging or federating institutions.

All mergers and federations by their nature involve more than one organisation. Organisations are

highly unlikely to have exactly the same styles of communication. It is generally considered to be

good practice in the lead up to merger and federation to ensure consistency of approach to

communication across different colleges.

Staff across all organisations will benefit from the same regular communication and same focus on

key messages. This does not preclude additional communication on matters relevant to individual

colleges, but it is very important to ensure there is consistency in approach and message content.

It will be a particular challenge, when dealing with federations rather than a single merged

institution, to maintain a consistent approach to communication.

Horizontal as well as vertical (both downward and upward) communication.

Horizontal communications are aided by putting in place effective staff engagement channels, such

as appointing communication facilitators across colleges, holding small group discussions, and

enabling staff to post questions and have them openly answered.

Upward communication is aided by engaging staff in identifying local issues and feeding them up to

project managers and other senior specialists. For example, staff in the front line are more likely to

understand the needs of particular groups of learners, to be aware of where there are

opportunities to simplify processes such as at enrolment, and to be aware of important but oft

forgotten needs, such as the production of new telephone directories.

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Consultation and engagement methods

Elsewhere in this guidance site, there have been clear requirements set out in terms of

consultation. This section explores in further detail some of the methods and approaches that

might be utilised. Good practice would suggest that the first requirement of effective consultation

is to clearly set out, with appropriate detail, the nature of the consultation. This might, for

example, be a summary document relating to merger or federation. There is no need to supply

large detailed documents, but a clear summary of the main issues is important.

There are various ways in which stakeholders can be asked to contribute. The methods chosen

should reflect the needs and expectation of stakeholders. Consultations might make use of one or

more of the following methods:

1. Questionnaires: Surveys can be distributed in a variety of ways, but there is an increasing

trend to use on-line surveys supplemented by targeted distribution using email. Such on

line approaches have the benefit of allowing for speedy and cost effective distribution of

materials.

2. Focus groups can be used where there is a desire to gain comment and advice from

stakeholders and where it is appropriate to have such comments influenced by discussions

with other stakeholders. It is important however to ensure that the views expressed are

effectively captured, usually by the use of a skilled minute taker or by recording. Focus

groups also require good facilitation.

3. Buzz groups, Open Space Conferencing and similar techniques are used where there is a

desire to encourage some creative thinking and creative contribution. Such techniques

require careful management from skilled facilitators. They have the advantage of producing

“richness” to the comment often lacking in surveys or simple meetings.

Many consultations involve a mixture of methods to suit particular aims and the specific interest of

stakeholders. Further advice on the conduct of consultations can be received from the Change

Team.

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Counterpart process

In all mergers or federations, there will be individuals carrying out identical or very similar roles.

This is likely to be true for all levels, from principals to junior staff. Many of these roles will have to

be aligned and brought into close harmony through horizontal and well as vertical communications.

They should also share a common understanding of their role in the new organisational structure,

and benefit from common resource support.

This will be facilitated if a “counterpart” process is put in place. Thus, it should not only be at

principal level that individuals regularly communicate and support one another, but a wide range of

counterparts, both in the academic and support areas will benefit from engagement at appropriate

levels of intensity.

Counterparts from across organisational boundaries will often be ideally placed to advise on

specific and practical requirements that should be fulfilled to make the process of merger or

federation a success.

Therefore, thought should be given at an early stage in the merger or federation process to putting

in place an effective counterpart process.

The issues of security of employment will be a major concern in the minds of most employees of

the merging colleges. It is important to ensure that “known certainties” are clearly communicated

at an early stage. For example, it may be the case that the majority of the front–line delivery staff

can be immediately confirmed into post thus reducing uncertainty. If this can be achieved this will

go some way in assisting the transition to new working arrangements in the new institution and

reducing fear around the management of change.

Merger support

Once regions have finally settled upon their approach, they can, if they wish, approach their SFC

Regional Outcome Manager. Full details of contact names can be found on the SFC website:

http://www.sfc.ac.uk/guidance/mergers/WhotoContact/WhotoContact.aspx

It may change over time, but currently this will involve offering the following services:

33

Merger and Federation workshops and briefing sessions

Workshops or briefing sessions focused on understanding good practice related to mergers in

particular, but also federation issues.

Rather than developing generic programmes, it is judged more appropriate to discuss the design

and provision of bespoke programmes in those regions that consider this would be helpful. Such

sessions might involve individuals with experience at Board, principal or senior management level.

In addition, it may involve some with important specialist roles, such as project managers and

providers of specialist services.

Facilitation and consultancy support

Some regions may also benefit from facilitation. Facilitators may be used to assist with top level

decision making, or to facilitate meetings where strong opinions may need to be managed in ways

that do not damage relationships. Facilitators might also be used with work groups, to assist in

focusing on solutions to problems and understanding the opportunities that become available.

Although regions will be expected to commission any significant forms of consultancy support

deemed necessary, advice on past experiences and forms of helpful consultancy can be given by

the Scottish Funding Council, and consultancy support can be accessed through the joint SFC and

Scottish Government Change Team.

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Models of merger

Introduction

There are essentially two types of merger currently being discussed in the college sector. These are

a ‘phoenix’ model or a ‘host’ model as described below. Both models have been used in previous

mergers. In the University sector all recent mergers have been host models. In the college sector

three mergers have used the host model approach and two have followed the phoenix model.

From SFC’s experience of these mergers there is no strong correlation between the model of

merger and the success or otherwise of the merger or even of the way that the merger is perceived

by staff.

However, we again emphasise that decisions on college mergers are ultimately for Ministers,

whose job it also is to promote the necessary legislation.

The 2009 LSN research report, Understanding FE Mergers outlines that a shared vision and the

communications of the drivers for merger are more critical in how the merger is perceived than the

actual mechanics of the model for merger. That said, early consideration, and potential agreement,

of the model for merger is a key step in the merger process as it enables many other key decisions

to be made.

The Models

Phoenix model

When using the phoenix model an entirely new institution is established, with a new chair and

Board members. This new Board will be responsible for implementing the merger post-Vesting

Day. It requires to become a fundable body and then to take over provision, employment of staff,

assets and liabilities. The existing colleges are dissolved by the Scottish Government. Three

statutory instruments are required for this model of merger.

Host model

Using the host model one of the existing colleges acts as the legal vehicle for creating the new

college. Its board is reformed to include members from the other college. It then takes over

provision, employment of staff, assets and liabilities. The remaining college is eventually dissolved

35

by the Scottish Government. In cases where a change of name is required then this is usually

undertaken on a separate, but concurrent timescale.

It is worth emphasising that where the host model is used there is a spectrum of possible

outcomes. While the essential characteristic is that the board of one college is used as a vehicle for

creating the new entity, there is a range of other things that might or might not change. These

include the name, board membership, the principal and the terms and conditions of staff. In some

host models there is a great deal of change and the genuine creation of a changed entity. In others,

particularly in very asymmetric mergers (a very large institution with very small institution) this

does not happen.

Key considerations

A key consideration for the colleges will be establishing a new board capable of leading the new

college, including when it should be established and how its membership reflects the size and

shape of the existing colleges.

However, The Scottish Government published its plans for College governance, some of which will

require legislation ,it is therefore important to discuss any impact this will have on plans for merger

or federation with both the SFC and government colleagues.

Other aspects which the governing bodies may wish to consider when deciding on what model to

adopt are how to:

• Enable each college to be equal partners and bring with them their range of provision,

specialisms and individual strengths;

• Enable a new vision to be achievable in the short term, ie to ensure there is an

acceptance of “will be” rather than “will become”;

• Minimise feelings of insecurity for staff and students and achieve a transparent

approach to the merger process;

• Achieve political and stakeholder support for the new college;

• Brand the new college to maximise new opportunities for growth and retain the

individual strengths and, where appropriate, business continuity of the existing colleges;

• Position the college to maximise publicity opportunities.

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It is worth considering the impact of each of the models on the following in particular:

• Speed, and maintaining momentum;

• Buy-in from boards and staff; and

• Risk of the process being derailed.

These issues are discussed in more detail below, and are summarised in the attached table.

Speed, and maintaining momentum

Using the host model, the decisions over principalship and board structure can usually be taken

early on in the process. With the phoenix model, this process would require input from the Scottish

Government.

The phoenix model would deliver a completely new entity including a new board and principal. The

appointment of a new principal should involve an open recruitment process. Only in exceptional

circumstances agreed in advance with SFC, would it be appropriate to restrict applicants to those

already in post in merging colleges. On the one hand it could be argued that this enables new

leadership for a new college but on the other hand, it could cause a dislocation between the vision

outlined for the new college by the existing individual college boards, and the reality of the

implementation. Another possible factor is that the Partnership Board may lose their ability to

influence direction for the new college when the Scottish Government exercise their role in

determining the new college. However, there are ways to address this such as:

• requesting that the new board includes existing members of the Partnership Board

and/or existing collegeboards; and/or

• offering co-opted members, perhaps on a time limited basis, to support the new Board.

A host model would overcome potential dislocation as outlined above, but there is a possibility that

this model is seen as a take-over which could be problematic for the buy-in of the staff of the new

college. However, this risk is minimized by the reforms recently announced regarding college

governance arrangements.

The regulatory process with the Office of the Scottish Charity Regulator may be slightly more

lengthy and complex, if the phoenix model is used.

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Buy-in from Boards and staff

Both models have the potential to either positively or negatively influence the buy-in from boards

and staff. As outlined earlier in this paper, a successful communication strategywill go a long way

to ensure real support and buy in from staff and also from boards whatever the model of merger

chosen. A clear approach to internal communication is crucial – staff need to understand how the

merger may affect them and their job security.

A negative aspect of the host model is the potential for the merger to be seen as a take-over (of a

smaller or failing college) and therefore run the risk of alienating the board and staff of that college.

However, there are steps that can be taken to address that risk, such as holding joint board events

and reforming the board and senior management. Similarly it will be important for staff within

each college to understand the purpose of the merger, the drivers for the merger, the strengths

and unique attributes of each college, the continuity of college business and the long-term benefits

of the merger. Staff will want to know how they will be affected whatever the model of merger.

Due to the risks outlined in using the host model, the internal communication strategy will need to

ensure that equality across the colleges is maintained as the colleges move toward merger. If the

communications strategy of a host model is managed well it could also minimise perceptions of job

insecurity, as staff would move to an organisation that fully represents a merger of the existing

colleges in terms of its board and management structure. This is in contrast to a phoenix model

where the board may or may not maintain the existing college structures.

If using the phoenix model, the existing staff would be presented with a demonstrably new college.

This could influence buy-in from all sets of staff, dependent on the values attributable to the

existing colleges and structures, and opportunities presented by a completely new structure.

However, in the current economic climate it is likely that most staff would be seeking job security,

as opposed to new opportunities, and for that reason may see a new, possibly unfamiliar, board

and management structure as threatening. The phoenix model clearly delivers a new college.

Risks of the process being derailed

This risk of derailment exists whatever model of merger is pursued. With the host model, this may

be due to perceptions of takeover whereas with the phoenix model, the risk may result from the

time taken to put in place the management structure of the new college. Perceptions of takeover

38

can be minimised and managed through effective communication and project planning to deliver

the key messages of the purpose of the merger and to ensure that staff and stakeholders are fully

involved throughout the merger process.

One significant influencing factor which has to be clearly understood is the harmonisation aspect of

conditions of service. A detailed assessment of the implications of harmonisation should be

completed. Whilst it is recognised that this can present significant challenge in attempting to

harmonise, understanding the extend of differences and how these might impact on staff

integration and development of culture is of great benefit.

Conclusions

Both methods of merging have been used in the past. The SFC’s experience is that it is the way in

which a merger is implemented including the leadership from the board and principals, the level

and intensity of communication and the way that services and terms and conditions are

harmonised that create (or fail to create) the feel of a ‘new’ entity rather than the type of

governance mechanism that is used.

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Table 1: Comparison of Host and Phoenix Models

‘Host’ ‘Phoenix’ Positives • Faster process which reduces uncertainty and risk thus enabling more planning

pre-merger • Principal designate can be appointed quickly once the colleges agree to

proceed • Existing management structure and operations can continue until the colleges

are ready for the host college to restructure and integrate • New Board and organisational structure for integration of the college can be

discussed in advance of the merger • This new structure can seek ‘early wins’ to prove the benefits of the proposed

new college • Possibly less uncertainty for staff/management if it is perceived as the next

steps in an already developed collaborative approach rather than a move to possibly unknown Board and management structure

• One application to the Office of the Scottish Charity Regulator and 42 days notice and a further application (also requiring 42 days notice) to change the name of the college

• Creating a demonstrably ‘new’ college, that would be very clearly perceived as a ‘new beginning’.

• Conducive to lots of change and innovation. • Provides many opportunities for staff and management engagement in

creating a new culture. • Requires very skilled and creative leadership. • Requires new Principal, management structure and operations

Negatives • Could be perceived as a ‘take over’ • Could be perceived that one college is in the driving seat • Risks losing the strengths of the non-host college • Business continuity risk at the point of restructuring the college

• Slower process which increases uncertainty and risk which may require scenario planning

• Risks a Board that lacks continuity and potentially loses the experience from the existing boards

• It might require the Scottish Government to appoint the chair and the Board using the public appointments process which can take a substantial amount of time

• Business continuity risk at the point of merger • Multiple applications to the Office of the Scottish Charity Regulator all requiring

42 days notice. Firstly, to dissolve the existing colleges and secondly to set up a new charity.

Possible steps that might mitigate some of the negatives

• Internal and external communication strategies which recognise and address the above issues – to be successful this will require significant input in terms of time, staff and resources

• Joint Board events • Joint staff events • Jointly agree a new name for the college to signal a new beginning alongside

an internal and external branding exercise • A significant programme of work to demonstrate the vision of the new college.

• Considering whether the Board will need additional assistance in its early days e.g. co-opted existing members perhaps on a time limited basis.

40

Partnership Agreement linked to creating a Partnership Board

A proforma which may be used to establish and agree a Partnership Board follows:

Agreement relating to proposed merger of the Colleges

[ ] ***** 2012

1. Parties

INSERT COLLEGES/UNIVERSITIES

(together, the "Colleges").

2. Purpose The Colleges have agreed in principle to a merger of ****** colleges.

The Colleges have agreed to the following key principles and terms set out in this document ("Agreement") which will provide a framework within which progress towards and preparations for merger will now take place.

3. Commitment The Colleges agree that a merger is their preferred strategic option. Subject to the outcome of financial due diligence and consultation with staff, students and other stakeholders they shall work together in good faith and in a collaborative and constructive manner to undertake necessary preparations, and enter into any appropriate agreements in order to achieve merger.

4. Timescale The Colleges agree to work towards a deadline for merger at ***** subject to necessary approvals and agreement of the Scottish Funding Council and Scottish Government.

41

5. Establishment of Partnership Board

Upon agreement of this Agreement, the Colleges shall establish a joint committee with representatives from each College to work towards agreeing the merger proposal. This joint committee shall be called the "Partnership Board".

The core membership of the Partnership Board shall comprise the following representatives:

• the Chair of each College;

• the Principal of each College;

• one additional member from each College board; and

• one staff representative from one College and one student representative from the other College.

The Chair of the Partnership Board shall be *******.

The Vice Chair of the Partnership Board shall be *******.

Should any of these representatives be unable to attend a meeting, their college shall be entitled to nominate a substitute board member.

The Scottish Funding Council shall be entitled to attend meetings of the Partnership Board as an observer. Such an observer will have no vote at any board meeting.

6. Operation of Partnership Board

The Scottish Funding Council shall provide secretariat support to the Partnership Board until merger is complete

The Partnership Board may, at its discretion, invite other attendees to attend board meeting including, for example, senior staff from the Colleges and project managers for the merger. Such attendees will have no role at any board meeting.

The Partnership Board shall provide reports to the boards of each College.

7. Authority of the Partnership Board

Authority to take the following actions, decisions, and preparation shall be delegated from the Colleges to the Partnership Board for:

• the preparation of the merger proposal document;

• consultation on the merger;

• the planning of the merger including undertaking necessary due diligence;

42

• the allocation and spending of any funding from the Scottish Funding Council for the pre-merger phase;

• the commissioning of professional advice and support for the pre-merger phase using the funding above; and

• making any prospective appointments to posts in the new college.

Any other delegations of authority by the Colleges to the Partnership Board will be taken at College Board level and formally recorded, for the avoidance of doubt.

For the avoidance of doubt, the following decisions shall be deemed to be beyond the authority of the Partnership Board:

• final decision as to go-ahead with the merger; and

• spending over and above any pre-merger funding allocated by the Scottish Funding Council.

8. Funding The Scottish Funding Council shall provide funding to support the pre-merger discussions.

The terms and conditions of this funding will be set out in a letter from the Scottish Funding Council to one or both of the colleges. The Partnership Board will be required to comply with any such terms and conditions.

9. Consultation The Colleges shall each be responsible for carrying out a full consultation with its own students and staff in respect of the proposed merger. However the Colleges will work together to ensure such consultation exercises are conducted in a consistent way and in the same, or similar timeframes.

10. Pre-conditions/ approvals required

The Colleges shall work together constructively and expeditiously to obtain the approval of the Scottish Government and Scottish Funding Council to the merger and any other formal approvals required eg the Office of the Scottish Charity Regulator.

11. Due Diligence The Colleges shall co-operate fully with each other and the Scottish Funding Council as appropriate to assist in the undertaking of a full financial and legal due diligence prior to merger, including making available all required information to professional advisors and providing access to premises where necessary.

12. Merger Document The Colleges will work constructively and expeditiously to produce a merger plan which will deal, among other matters

43

with:

• The transfer or disposal of all property & assets of each college;

• Transfer/Rationalisation of contracts held by each college; and

• Transfer of staff of each college.

13. Confidentiality

Neither College shall disclose any information (in whatever form) disclosed to them by the other College relating to the disclosing College's business or affairs other than as agreed by both colleges.

This clause will not prohibit the sharing of information with professional advisors appointed to the colleges to assist in any merger process, or with the Scottish Funding Council or the Scottish Government.

14. Legal status Other than the clauses on Confidentiality and Governing Law, this Agreement shall not be legally binding on the parties.

15. Governing Law This Agreement shall be read and construed in accordance with Scots law and the Colleges agree to submit to the exclusive jurisdiction of the Scottish courts.

44

Signed for and on behalf of the board of management of ****** College by:

Signature

Name (block capitals) Authorised signatory

Signed for and on behalf of the board of management of ****** College by:

Signature

Name (block capitals) Authorised signatory Signed for and on behalf of the board of management of ****** College by:

Signature

Name (block capitals) Authorised signatory Signed for and on behalf of the board of management of ****** College by:

Signature

Name (block capitals) Authorised signatory

45

Example of Invitation to Tender for Due Diligence Financial due diligence:

Background The Governing Bodies of ……………. have agreed in principle to a merger of the colleges. The colleges are working towards a target merger date of …… for the launch of the new college. Consultation on the merger will commence from ……….and a formal consultation document will be published in ….. The appointed advisor will undertake a financial due diligence exercise reporting to the Governing Bodies of the colleges. Requirement Phase 1

The first phase of work will be the provision of a comprehensive financial review of the individual colleges. This work will include:

• Specific areas of financial strength and weakness • Historic and current financial performance • Accounting policies • Audit issues • Financial control • Operational performance • Assets & Liabilities • Cash Flow • Taxation • Pensions and Pension accounting • Risk Management • Financial and operational planning

The first phase of work will need to be substantially complete by ………… to enable the advisor to report to the Governing Bodies of the individual colleges, the Partnership Board and the Scottish Funding Council. The report should include a list of recommended actions to be undertaken both prior to and post the merger.

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Phase 2

The second phase of work will commence during… . . . and will require the advisor to work with the management teams of the colleges as they develop the financial forecasts for the new college. The final merger document is expected to be published in …..; included within it will be financial forecasts which will require formal review by the Advisor. A detailed note covering the review process, assumptions and issues will be required by the Governing Bodies. Interested parties should provide:

• A statement of their involvement in the Scottish Further and/or Higher Education sector and any relevant experience of merger activities;

• An outline of their proposed approach to this activity outlined above; • A statement of when the Phase 1 activity could be commenced; • An estimate of the timescale required for delivery of this work; • CV’s of the principal advisors who will be involved in the work and the

proposed extent of their involvement; • A firm quote for Phase 1 of the work and an indicative quote for Phase 2 of

the work, both excluding VAT; Next step

Written submissions should be provided by email to: X X X A shortlist of potential providers will be requested to make a presentation to the management of the colleges on . . . . . . Legal due diligence

Background The Governing Bodies of ……… have agreed in principle to a merger of the colleges. The colleges are working towards a target merger date of ………. 2012 for the launch of the new college. Consultation on the merger will commence from ….. and a formal consultation document will be published on ………. The appointed advisor will undertake a legal due diligence exercise reporting to the Governing Bodies of the colleges.

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Requirement

The chosen advisor will be required to provide a comprehensive legal review of the individual colleges. This work will include:

• Material commercial contracts - including property contracts; • Intellectual Property issues – including IT contracts; • Borrowing arrangements; • Employment contracts and conditions including disputes; • Litigation and disputes; • Governance issues including constitutional powers of the Governing Bodies

and the Partnership Board and any Charity issues; and • Compliance, including data protection and freedom of information.

The work will need to be substantially complete by ………… to enable the advisor to report to the Governing Bodies of the individual colleges, the Partnership Board and the Scottish Funding Council. The report should include a list of recommended actions to be undertaken both prior to and post the merger. Interested parties should provide:

• A statement of their involvement in the Scottish Further and/or Higher Education sector and any relevant experience on merger activities;

• An outline of their proposed approach to this activity outline above; • A statement of when the Phase 1 activity could be commenced; • An estimate of the timescale required for delivery of this work; and • CV’s of the principle advisors who will be involved in the work and the

proposed extent of their involvement.

48

Example of Project Manager Recruitment advert The Partners are now seeking an experienced Project Manager with a proven track

record of project development and delivery, with specific experience of a merger if

possible. The Project Manager will plan, execute and finalise an overall merger plan

for the Partners according to strict deadlines and within agreed budget. He/she

will be responsible for the establishment of internal workstreams with a view to

delivery of the merger through a range of activities and agreed milestones.

The Project Manager will have excellent business management skills with significant

experience of delivering complex organisational change. He/she will be able to

influence and motivate staff and engage with student representatives while

developing and maintaining cordial relationships with Partners and stakeholders.

He/she will combine their drive and flair with considerable project experience to

ensure a successful merger programme is delivered.

Responsibilities and key requirements

The role of the Project Manager is to plan, deliver and finalise an overall merger plan

for the Partners according to strict deadlines and within agreed budget.

The Project Manager’s responsibilities will include:

• Support to the Management teams/Executive teams of the Partners

• Support to the Partnership Board

• The development of an overall plan and high level timetable for the merger;

• Communication of the plan to the Governing Bodies, the Scottish Funding

Council and the Scottish Government as appropriate, reflecting changes as

they arise

• Establishment of internal workstreams required for delivery of the merger

including development of initial agendas, reporting and communications

documents

• Provision of information and support to the Executive Steering Group (ESG);

• Formation of a Central Programme Team to support the ESG and the merger

support groups

49

• Definition of activities and outputs of the merger support groups (e.g.

Curriculum, Business Development, Marketing and International work

streams) and will require establishment of central services work stream

required for delivery of the merger

• Programme management to enable development of detailed work stream

plans; agreement of initial budgets; delivery of initial milestones

• Determine and deliver on the frequency and content of status reports and

troubleshoot problems areas

• Build, develop and grow business relationships vital to the success of the project.

Key skills and requirements of the Project Manager

• Excellent business management skills

• Effective planning and organisation skills

• Proven track record of project execution and management

• Significant experience of delivering complex organisational change

• Project experience on a large merger programme

• Financial management skills

• Good verbal communication and interpersonal skills with the ability to

develop and maintain cordial relationships with Partners and stakeholders

• Ability to problem solve at a high level to resolve conflict situations

• Ability to motivate and influence

• Good written communication skills with the ability to produce high level

reports and communication documents

• Strong ICT skills

Timing of activity

At this stage there is an element of uncertainty over the timing and level of activity

required and the internal resources able to support the process. The level of

support required on a weekly basis will vary and will be agreed with the Principals.

Work base

Work will be performed in the main on the premises of the colleges but some

activity e.g. report writing may be undertaken off-site.

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Other Advice and Guidance for College Mergers

NUS Scotland and sparqs

The National Union of Students (NUS) and partners (sparqs) are able to provide

advice, guidance and support during and after a merger process.

• NUS are able to support students’ associations and facilitate talks amongst

themselves and with College Boards.

• NUS are able to offer facilitated Strategic Planning sessions – where student

representatives are able to explore the future purpose and direction of their

students’ association.

• NUS have a wealth of experience in the areas of representation and

governance and are able to offer advice and share good practice.

• NUS have over the years help develop and implement efficient and effective

constitutions.

• NUS are experts in Training and Development and are able to offer an array

of opportunities for both Officers and staff.

Additional NUS advice and guidance for college mergers including legal requirements

and responsibilities is available on the sparqs website: http://www.sparqs.ac.uk/

Partnerships for Change

Partnerships for Change is a joint NUS Scotland and sparqs project that is funded by

SFC to support Students’ Associations and institutions to deliver student

engagement during the period of structural change across the college sector and

also to help focus the restructuring or Students’ Associations through

regionalisation.

Its aims are to:

• Engage with change processes as colleges merge, federate and develop to

meet the regionalisation agenda to ensure decision making is influenced by

students.

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• Develop new structures and processes to ensure students can effectively

shape and influence college life and the student experience with the new

regions – representing students with an independent voice through access

points and fulfilling a governance role within any regional structures.

• Contribute to national developments and strategic direction taking colleges

forward.

Project outcomes are:

• Student Representatives have a formal, engaged, and active role in the

shaping the change process.

• Student Representative structures engage with and influence decision

making from the Regional Board level down ensuring college strategies are

student centred.

• Autonomous, inclusive Student Associations able to gather and represent

diverse student opinions.

• Student Associations are resourced and sustainable.

• Student Associations’ role in the Regional College Partnership is better

understood and supported.

• National support for College student structures and Regional student

members is available.

• Student Officers are able to contribute to national strategic debates.

Each region will have a Partnerships for Change Consultant who will offer advice and

support to student representatives and student governors in colleges, and also their

Students’ Associations, and provide coaching as necessary. Resources and guidance

will also be produced centrally which students in all regions will be able to access.

For further information on Partnerships for Change:

www.sparqs.ac.uk/partnerships.php

Scottish Qualifications Agency

The Scottish Qualifications Agency (SQA) merger guidance has recently been

updated and can be found here: www.sqa.org.uk/sqa/64101.html

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53

Care inspectorate for nursery re-registration

Two regions undergoing merger in AY 2012-13 had to re-register their college

nurseries. This affected colleges which were not the host in the merger. The Care

Inspectorate confirmed that nurseries run by a college (not those run independently)

must be re-registered so that they appear under the same service provider number,

i.e. the host college.

Re-registration can take up to 6 months. In the example below College A is the host

college; College B is the college merging with College A.

Based on no change of provider entity for the host college

1. College B to file an online cancellation of their registration number with the

proposed vesting date.

2. College A to complete an online application form to vary the registration of

their nursery to include the details of College B's nursery in their registration.

3. College A to complete a notification form online to identify the change in

Executive Management, i.e. Principal Designate as the main contact AND

download from the Care Inspectorate website, complete and send in to the

allocated inspector for the nursery, the Change of Relevant Individual form

for each new Board member/Director who may have been appointed to the

provider entity as a result of the merger.

Based on a change of provider entity for the host nursery

1. College B to file an online cancellation of their registration number with the

proposed vesting date.

2. College A to complete an online application form for new registration of the

nursery and include the details of College B's nursery in their registration

application.

For further information contact Helen Pilkington, Registration Team Manager, Care

Inspectorate (email: helen.pilkington@careinspectorate.com; phone: 0131 653 4142)

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Institutions that have merged/are merging (and where SFC has granted strategic funds to support the process)

Colleges

• Coatbridge College to join New College Lanarkshire merger – 1 April 2014.

• Motherwell College and Cumbernauld College to form New College

Lanarkshire – 1 November 2013

• Aberdeen College, Banff and Buchan College to form North East Scotland

College – 1 November 2013

• Dundee College and Angus College to form Dundee and Angus College – 1

November 2013

• John Wheatley College, North Glasgow College and Stow College to form

Glasgow Kelvin College – 1 November 2013

• Ayr College, Kilmarnock College and James Watt College (North Ayrshire

campus) to form Ayrshire College – 1 August 2013

• Cardonald College, Anniesland College and Langside College to form Glasgow

Clyde College – 1 August 2013

• Clydebank College, Reid Kerr College, and James Watt College (Inverclyde

campus) to form West College Scotland – 1 August 2013

• Carnegie College and Adam Smith College to form Fife College – 1 August

2013

• Stevenson College, Edinburgh’s Telford College and Jewel & Esk College to

form Edinburgh College – 1 October 2012

• Central College, Glasgow and Glasgow College of Nautical Studies and

Glasgow Metropolitan College to form City of Glasgow College – 1 September

2010

• Lochaber College and Skye & Wester Ross College to form West Highland

College – 1 August 2010

• Clackmannan and Falkirk Colleges to form Forth Valley College– 1 August

2005

• Fife and Glenrothes Colleges to form Adam Smith College – 1 August 2005

55

• Glasgow College of Building & Printing and Glasgow College of Food

Technology to form Glasgow Metropolitan College – 1 August 2004

HEIs

• Edinburgh College of Art with the University of Edinburgh – 1 August 2011

• Bell College and the University of Paisley to form the University of the West

of Scotland – 1 August 2007

Tertiary institutions

• Elmwood College, Oatridge College, Barony College, and Scottish Agricultural

College to form Scotland’s Rural College (SRUC) – 1 October 2012

HEIs with merged departments

• Edinburgh College of Art and the University of Edinburgh formed a joint

Edinburgh School of Architecture – May 2006

• The University of Glasgow and the University of Strathclyde formed the

Glasgow School of Social Work on 1 August 2003

• The University of Glasgow and the University of Strathclyde formed a joint

Department of Naval Architecture and Marine Engineering - August 2002

Collaborations

• Borders College relocated to the Scottish Borders Campus of Heriot-Watt

University, where the institutions have partially merged their Business and

Management Schools and share some support services.

• Crichton Campus, Dumfries where Dumfries and Galloway College, University

of Glasgow, University of West of Scotland offer provision alongside the

Crichton Carbon Centre and the Scottish Agricultural College

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Index

A

academic · 13, 32 Act · 19 advisor · 14

B

board · 12, 19, 25, 26, 33, 36, 37, 38, 41, 44 boards · 6, 11, 12, 14, 25, 36, 39, 41

C

Cabinet Secretary · 6, 7, 13 Central Programme Team · 48 Chair · 12, 19, 41 change · 9, 10, 11, 18, 19, 24, 26, 27, 28, 29, 30,

32, 35, 39 Change Team · 4, 31 Charity Regulator · 18, 36, 39, 42 college · 4, 9, 10, 11, 12, 14, 15, 16, 17, 19, 24, 27,

34, 35, 36, 37, 39, 41, 42 College Board · 25, 41 communication · 4, 6, 8, 17, 18, 26, 27, 28, 29, 30,

37, 38, 39, 57 community learning · 21, 22 consultation · 6, 11, 17, 22, 31, 40, 41, 42 Consultation · 8, 17, 42 cooperation · 4, 26 coordination · 4 Council · 4, 6, 18, 19, 36, 40, 41, 42, 43, 57 Counterpart · 32 cultural · 4, 10, 24, 26, 27, 28 culture · 9, 16, 24, 26, 27, 28, 39

D

decision · 5, 6, 7, 14, 19, 25, 26, 33, 41 Decision in Principle · 5 decision making · 5, 25, 33 dialogue · 10, 57 due diligence · 3, 6, 12, 14, 15, 40, 41, 42 Due Diligence · 42, 45

E

education · 9, 10, 21 efficiency · 7, 21 engagement · 3, 9, 17, 18, 28, 30, 32, 39 estates · 22 evaluation · 7 executive · 6, 7, 10, 13, 19

F

facilitation · 4, 25, 31, 33 federal model · 4, 10 federation · 4, 5, 24, 25, 30, 32 financial · 4, 6, 8, 13, 14, 15, 22, 40, 42

G

governance · 6, 9, 12, 13, 19, 38, 50 governing bodies · 8, 13, 18, 35 governing body · 13 governors · 6, 19

H

harmonisation of terms and conditions · 22 HEI · 4 host model · 16, 34, 35, 36, 37

I

ICT · 22 innovation · 9, 39 institutions · 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16,

18, 19, 21, 22, 28, 30

K

knowledge transfer · 21, 22

L

leadership · 3, 24, 25, 26, 36, 38, 39 learners · 9, 21, 30 learning and teaching · 22 legal · 3, 4, 8, 14, 15, 34, 42 local authorities · 21

M

management · 6, 10, 12, 13, 15, 22, 23, 24, 31, 33, 37, 39, 44

managers · 6, 13, 19, 30, 33, 41 merger · 3, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16,

17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 34, 35, 37, 38, 39, 40, 41, 42, 43, 50

milestones · 8, 13 models · 4, 6, 16, 35, 36, 37

57

N

NUS · 50

O

operations · 5, 39 options appraisal · 10, 21, 22 organisation · 4, 5, 24, 26, 27, 28, 29, 30, 37 OSCR · 8, 18

P

partners · 6, 7, 8, 9, 10, 14, 22, 35, 50 Partnership Agreement · 8, 12, 40 Partnership Board · 8, 11, 12, 13, 17, 18, 36, 40,

41, 42 phoenix · 34, 36, 37 post-16 · 9, 10 Principal · 25, 29, 36, 39, 41 Principals. · 17, 49 project manager · 8, 12, 13, 29 Project Manager · 48, 49 proposal · 6, 8, 9, 10, 11, 12, 13, 15, 18, 19, 20, 21,

23, 41 public funds · 5, 6, 25

R

regional · 5, 10, 17, 21 regions · 9, 32, 33 relationships · 4, 26, 33 report writing · 49 research · 21, 22, 24, 27, 34 resource allocation · 5 restructuring. · 7 risk · 14, 23, 36, 37, 39

S

savings · 7, 20, 22 Scotland · 3, 4, 9, 19, 21, 24, 27 Scottish Government · 4, 8, 17, 18, 34, 35, 36, 39,

40, 42, 43 Senior Management Team · 25 SFC · 7, 8, 12, 16, 38 Shadow Board · 12, 13 staff · 8, 9, 10, 12, 15, 17, 18, 19, 22, 26, 27, 28,

29, 30, 32, 34, 35, 36, 37, 38, 39, 40, 41, 42, 50 stakeholders · 9, 17, 21, 22, 26, 31, 38, 40 strategy · 5, 17, 18, 22, 37 student representatives · 11, 17, 18, 50 students · 8, 10, 11, 17, 18, 19, 22, 26, 35, 40, 42,

50 students’ associations · 11, 50 systems integration · 22

T

takeover · 37 technical requirements · 4 timescales · 3, 6 transformation · 6 trust · 3, 5, 10, 14, 26

V

value-for-money · 22 Vesting Day · 8, 10, 18, 34 voluntary redundancy · 7 voluntary severance · 7

W

website · 3, 29

58

References and Bibliography iLNA, (2009) Understanding FE Mergers iiLNA, (2009) Understanding FE Mergers iiiKavanagh, M. and Ashkanasy, N. (2006) The Impact of Leadership and Change Management Strategy on Organizational Culture and Individual Acceptance of Change During a Merger. British Journal of Management, Vol.17, S81-S103 ivMullin, R. City of Glasgow College Merger Review. Report for Scottish Funding Council and City of Glasgow College, 2010 vApril K.A.Leading through communication, conversation and dialogue. Leadership and Organization Development Journal, 1999 viKavanagh, M. and Ashkanasy, N. (2006) The Impact of Leadership and Change Management Strategy on Organizational Culture and Individual Acceptance of Change During a Merger. British Journal of Management, Vol.17, S81-S103 viiConlon, R Meeting the Communication Challenge During College Merger,Learning and Skills Development Agency, Northern Ireland , 2009. viiiSee for example Cameron, K Quinn R. Diagnosing and Changing Organisational Culture. Third Edition. Jossey-Boss (2011). Also Senge, P. The Fifth Discipline Random House 2006. ixConlon, R Meeting the Communication Challenge During College Merger,Learning and Skills Development Agency, Northern Ireland , 2009. xSenge, P., The Dance of Change Nicholas Brealey Publishing, 2007. xiMullin, R. City of Glasgow College Merger Review. Report for Scottish Funding Council and City of Glasgow College, 2010