George Bright is presiding over the country’s first simultaneous merger of three further education colleges: Trowbridge, Chippenham and Lackham - which specialises in agricultural courses - will become Wiltshire College from September next year. It’s a complex operation, one that Bright, the principal-designate, would have shrunk from five years ago. But advances in IT make all the difference. “I would not have wanted to go into this without new technology,” he says. “You would have faced the prospect of too many people travelling, wasting a lot of time in cars. But the tools we’ve got and the investment we’re making will, I believe, enable us to manage and communicate effectively.”

Feelers for the merger were first put out by Graham Baskerville, the retiring principal of Chippenham. And when Eifion Williams, head of Lackham, resigned in June 1999, it too was invited to join. Fourteen miles separate the three institutions, with Lackham - an idyllic site in sylvan fields near the National Trust village of Lacock - sandwiched between the two mainstream FE providers.

Already Lackham is feeling the benefits. “If we had a weakness, it was the lack of money we had to invest in IT,” says the acting principal, Terry Duggleby. “Now we are communicating daily with Trowbridge. Our financial system works through there and soon our management information system will.”

Lackham faced having to find pound;100,000 for its own management system and a further pound;80,000 for a new financial system. These were potentially crippling costs for a college that had had money problems and - unfairly, so Mr Duggleby says - had been chastised by FEFC inspectors for poor management and awarded a grade 4.

Now Lackham has secured these IT benefits for just pound;11,000, the cost of a licence to operate from the Trowbridge site, plus pound;42,000 for a new infrastructure. It has gone for “thin- client” technology - a system that offers a high-speed channel of communications between the sites. “Trowbridge also has a wider spectrum of IT expertise. We can draw on that when we have a problem or a manpower crisis,” says Mr Duggleby.

All the colleges and their satellites have local area networks. They have also been joined on to the University of Wiltshire and Swindon’s project network. “We are investing in a new telecommunications system with a single dial number for the public. To enable e-mailing, there will be a single intranet for the college,” says Mr Bright. “Five years ago, the IT equipment would have been less user-friendly and probably too expensive. There was a different operational and business climate, and the tools weren’t there to manage a geographically disparate and complicated operation.”

Lackham anticipates further benefits such as a greater ability to market itself, long constrained by its tight budget. It will continue to be an associate faculty of Bath University and offer higher education courses with possible progression routes to degree level in subjects such as animal sciences and countryside management.

While some principals are apprehensive about what will happen when the Learning and Skills Council starts operating next April, George Bright appears sanguine. “I think there are opportunities there,” he says. “There will be a local council responsible for Swindon and Wiltshire with whom we’ll be able to relate directly, and go through the needs of the community and the business community.

“The FEFC has in many ways been good, but it doesn’t know the local places and has been very mechanistic. When Virgin Mobile came to Trowbridge, we wanted to put on a programme for adults interested in getting employment. We talked to Virgin about the sort of skills they would be looking for, and then with the FEFC but, because we were already over our unit targets for the year, there wasn’t extra money around for general part-time courses.

“I’d like to think that a more local council, with an element of discretionary funding, will be able to react to quite significant and, at times, very quick changes in the local climate. I would hope that because the LSC has a bigger budget, there will be more scope for the sort of responsiveness - and our wish to create local learning centres in every significant community.”

* CHAPTER TWO: HENDON AND BARNET IN WHICH THE PRINCIPAL PURSUES PARTNERSHIP AS A NON-MACHO IDEAL

It sounds like a recipe for unwieldy bureaucracy and remote management: the fusion of Hendon and Barnet, which in August became Barnet College, has created an entity of around 25,000 students and 1,350 staff. But impersonal it won’t be if John Skitt, the principal, has anything to do with it. Nor should this marriage unravel in disarray. Throughout the 1990s, Skitt has fostered educational partnerships across north London, even when the Tories were urging colleges to compete with one another. He knows the lie of the land, the people who can make things work.

Managing a large-scale merger is meat and drink to Skitt, but it’s not, he stresses, a macho thing. Indeed, the initiative came from Hendon whose financial troubles had piled up and whose principal had taken sick-leave because of stress. The growth in numbers through the 1990s was not matched by money from the Further Education Funding Council.

Hendon had also invested in new buildings at Grahame Park in 1994, believing that FEFC funding would improve. But it didn’t. Instead, the Conservative government made swingeing demands for further “efficiency”. Hendon struggled on but by 1998, with its long-term viability at risk, had begun looking for partners. Last year, it threw in its lot with Barnet in a merger which meant Hendon’s governing body would dissolve.

It wasn’t an easy process, despite links already forged between the two institutions. “We were both low-funded colleges, though Barnet wouldn’t have courted merger in 1998 - we had generated a surplus pound;1m in a pound;13m budget,” says Skitt. “I had to negotiate fairly hard to satisfy myself that three years down the line we would at least be in financial health.”

He has the ideal governing body to ask the right questions. Several have been through mergers in the commercial sectors: Paul Lester, a group managing director of the construction group Balfour Beatty; Jan Sweeney, personnel manager at the Bradford and Bingley building society. Another member is John Hall, head of education law at Eversheds, a London solicitors. “We built up that governing body because we needed it,” Skitt says. “They recognised the issues that could be potential deal-breakers.”

To some extent, Skitt admits, the arrangement felt like a Barnet takeover because Hendon’s name was disappearing. But both institutions lie within and have long served the borough of Barnet. Nor does it mean a physical departure from Hendon.

“The five sites will remain for the foreseeable future - at the moment they’re where we want them to be,” says Skitt. “You have to be local and make sure that in deprived areas you don’t take away the support networks unless you have something effective in their place - though in five years’ time, the whole question of where buildings need to be could change hugelyI It has been a battle to make people who won’t travel recognise that we’re a resource for the community.”

No merger is entirely painless. There were three compulsory redundancies, 20 voluntary, and staff who left were not replaced. The combined senior management team of both colleges has been reduced from eleven to seven. “I think the hardest part was to make sure people recognise that merger was in everyone’s best interests, I’ve tried to be straight,” says Skitt.

An open-door approach helped - Skitt considers confrontational management unproductive. After incorporation, he refused to impose contracts; instead, he conducted painstaking negotiations over three years to reach agreement. Even in a college of 25,000, he intends to remain accessible. “My style is to open up decision-making - it’s about the management team, not John Skitt, making all the decisions.”

He has much else to think about - the broader future of educational provision in London of which he regards the Hendon-Barnet merger as simply one process. Skitt has been chairman of the London region of the Association of Colleges for 10 years. “We have a London regional office, a regional director, a marketing initiative and a European curriculum. It’s all about building relationships,” he says. “I see forms of collaboration, partnerships or federation continuing in FE and between FE and HE. There are more than 50 FE institutions in London but these will reduce substantially over the next 10 years. But the fact that we’ve developed successful partnerships and deliberately set out to do so has strengthened our position enormously.”

* CHAPTER THREE:Sheffield A city that saw the first FE merger create the largest college in Europe but which is now witnessing its gradual dismantling.

Sheffield, a giant institution created when six colleges combined in 1992, has struggled under the strain of merger and vacillating government policy on funding. Castigated by FEFC inspectors this year for low standards of governance and management, it is in a state of flux. A federal structure, with three separate units looks to be the way forward.

Problems in Sheffield are complex and deep-rooted. A tertiary system was introduced in David Blunkett’s home city in the 1980s, yet schools in the prosperous south and west of the city were allowed to keep sixth forms. Parents scrambled to get into the catchment areas leaving FE colleges with a skewed intake.

On incorporation in 1993, Sheffield inherited substantial debt. Financial crises were gathering around the former principal, Ken Ruddiman, when last year, writing in College Manager, he urged caution. “The north was uneconomic - you had to subsidise it from the south,” he wrote. “Unless you have adequate funding measures you are better off not having a merger.”

Sheffield found itself in chaos even though, Mr Ruddiman says, he took pound;6 million out of running costs. After his departure - he retired last November - the college was placed in special measures. On January 1, the FEFC sent in Sir George Sweeney, principal of Knowsley, to take temporary charge. He remained until September 1, when he made way for John Taylor, appointed from Park Lane College, Leeds.

Sir George and Dr Terry Melia, theformer FEFC chief inspector, produced a review of FE in Sheffield. They recommended a federal structure: three units - each with its own principal and college council. These would reflect “local community and wider interests” and be represented on the corporate board of the restructured institution, which would be run by a chief executive.

The review claimed financial weakness was due to poor forecasting exacerbated by inadequate management information systems and a heavy reliance on distance franchising - which in 1998-99 generated pound;5.7m compared with a forecast pound;2.1m. Franchising, says the review, partially distracted Sheffield from addressing the city’s FE needs. “Schools, the college and training providers appear to go their own ways,” it read.

This created a financial buffer that masked weaknesses in strategic planning, organisation, staff deployment, estates and student recruitment. And failure to meet recruitment and retention targets, and a withdrawal from distance franchising, means that Sheffield faces a clawback of pound;1.4m for 1997-98 and pound;4m for 1998-99. The timing of these recoveries will, says the Sweeney-Melia report, be critical to the college’s cash flow and solvency.

The review also cited “outdated working practices and a contractual culture amongst staff... that inhibits flexibility”. Merger cost 300 jobs, but Mr Ruddiman says he managed them voluntarily. Staff are braced for another round of job losses - expected to exceed 180 - in restructuring. A ballot for industrial action this month was overwhelmingly in favour of a strike.

The way forward has been firmly spelt out: greater local responsiveness; closer relationships with potential partners and, within the three new colleges, the ethos of “freedom within a framework”. Each principal will have budget responsibilities tied to “demanding performance targets”.

John Taylor’s immediate priorities have been to review college finances in response to a scheme of voluntary redundancy and “ensure staff are deployed appropriately” so studies can begin “efficiently”.

Mr Taylor believes federalisation will bring flexibility and quick responses to the community’s needs. But Mr Ruddiman is sceptical. “It’s a complete nonsense - it will increase administrative costs. We spent eight years trying to cut those out. They’re trying to unpick what we did.”

His heavy emphasis on franchising was, he says, to earn pound;3m for subsidy of the north of the city, where he had closed two sites. “The FEFC wouldn’t give us the money because they were worried about converging unit costs,” he said. “If we could have generated money from private sources no one would have batted an eyelid but that was impossible in Sheffield during a recession, and where there was high unemployment.”

The Sheffield Review - Ruddiman was not invited to contribute - urges the restructured college to maintain cash balances of at least pound;2m. It’s another tenet of FEFC thinking of which Mr Ruddiman is sceptical. “Colleges are meant to be providers of services, not to amass reserves,” he says.

Last year, he wrote: ‘They’re saying stop franchising, so I’m saying right, we’ll come out of the north of the city.’ This alarmed the FEFC, he says, and, he suspects, David Blunkett, whose sons attended the college. “I got up the noses of the funding council because the policy was to merge. My view was ‘know what you are doing first.” He admits he had management information system problems - on merger, the college was operating from 108 sites - but says he had little practical help from the FEFC.

But staff say that because management did not know what it was doing, some face being without a job from early this month when the statutory 90-days consultation period expires. “We have 186 lecturers and support staff who are faced with losing their jobs,” says Russ Escritt, regional organiser for Natfhe, the lecturers’ union.

“I think it the biggest number of redundancies announced in any college. They are stripping out senior lecturers. It’s difficult to see how courses can be run properly. I’m not sure if this restructuring is right for colleges that have already merged. There will be difficulties in organising curricular and finance systems.”

Just over 100 staff have applied for voluntary redundancy. The review claims that a big cost burden has been excessive remission from teaching granted to lecturers - it calculated it at 93,000 hours, about the equivalent of 20 full-time staff. But Natfhe denies excess slack.

“It doesn’t match up with our own experience,” says Mr Escritt. “A survey showed staff struggling to keep up with the workload. If you take all the remission time out, it will leave unmanageable workloads for those who are left.”

Mr Taylor is aware he must build bridges. ” I have always given high priority to brief staff and feel it important they are aware of all the facts.”

One inescapable fact is the Learning and Skills Council, which assumes responsibility for post-16 FE and training from next April. Mr Taylor does not expect an easy ride. “The FEFC has been very helpful in assisting with the re-structuring of Sheffield,” he said. “But I anticipate the new environment may be more demanding and circumstances more challenging if the college does not meet appropriate measures of efficiency and effectiveness.”