An abundance of consultants

8th September 2000 at 01:00
Professionals who help you complete a difficult, specialist job on time? Or a waste of time themselves? Phil Revell reports on the growing use of experts in a sector that jealously guards its own expertise

He - or she - borrows your watch to tell you the time. They're the suits, the vultures circling the wounded beast, eager to make off with their share of the spoils. Consultants are down there with estate agents andtraffic wardens in the occupationalpopularity league.

The popular wisdom is that paying for consultants is money down the drain. Look at the BBC where the Birtist middlemen - recommended by the numerous consultants he engaged - are being cleared out by Greg Dyke's new broom. So why, it is reasonable to ask, would any cash-strapped college employ one?

"Consultants enable specific jobs to be done on time," says Richard Williams, principal of the new Westminster Kingsway College in London, after a year that has seen one of the fastest and smoothest mergers in FE history. Mr Williams was brought in to rescue Kingsway five years ago after auditors uncovered a pound;5 million debt. Inspectors had given the management a damning grade 4 - the second lowest. He turned the place round, cleared the debts and increased student retention and achievement.

The merger with Westminster will create an institution of 25,000 students, making it one of the country's largest colleges with an annual turnover of pound;30m. There will be specialist centres in business and finance, new media, hotel, catering and tourism - and heavy investment in new technology.

The merger has seen the two colleges employ nearly a dozen consultancies - from specialist legal advisers to designers. But Mr Williams makes no apologies for the considerable costs involved. He argues that the colleges were in control throughout and that it makes sense to pay for the best advice possible.

"The merger was first discussed at principal level in May '99. When we appraised our strengths and weaknesses, the amount of synergy and complementarity meant that there was a strong business case for the colleges coming together. We then had an informal meeting between the two chairs (of governors). We sat down as a group of four and looked at dealbreaker issues - made a long list."

By the autumn there was a position paper and discussions started with the Further Education Funding Council. The colleges then contracted City auditors and the consultants KPMG for a feasibility study. The next step was "due diligence", the checking process required in law to ensure that both parties have full awareness of the business situation of the other.

"We wanted to do the due diligence work before the FEFC's required date," he says. "KPMG won that contract as well, partly because they had established some familiarity with the college and its systems." KPMG provides audit services for more than 40 per cent of higher education and for more than 30 per cent of those in FE.

"Mergers and curriculum development are key areas of our FE business," says Peter Marples, who leads KPMG's education practice. "The vast majority of our team are from the sector - people who have been involved at principal, vice-principal or curriculum leader level."

Mr Marples is aware of the nervousness some managers feel about using consultants. "There are still a fair number of FE institutions who wouldn't use consultants as a matter of principle," he says. Many colleges argue that they have in-house skills and can do the work themselves. "But those skills tend to be vested in a small number of very busy people. One of the major advantages of using a firm like ours is that we can deliver in a day what a college might take weeks to set up."

It's a point taken up by John Hall from Eversheds, the specialist legal advisers who worked with Westminster and Kingsway throughout.

"We first got involved in January, with the preparation of a memorandum of agreement setting out the main terms of the merger in a way that would be acceptable to both governing bodies," says Mr Hall. "It covered the vision behind the merger, the composition of the new governing body, the structure and procedures of the merged college - no more than about three pages, but something that both governing bodies could sign up to."

In any merger the regulations governing transfer of employment contracts are a concern for managers. But John Hall reckons the real issues surrounding Tupe, the Transfer of Undertakings (Protection of Employment), as they are formally known, come after the event - the harmonisation of two different employment cultures.

"The best legal advice is before the event," he says, "a risk management approach. That can be done in a number of ways: through in-house training, external conferences and seminars, through policy review. There's no typical college scenarioI" Often the vital task of a legal consultant is to minimise the damage to reputation - an employment case that goes wrong, a contract where proper advice wasn't taken, the failure to comply with governance procedures.

"We can help to fight the fire," says John Hall, "but the collateral damage has often already happened." He argues that college policies and procedures are like antique furniture: "They need regular polishing," he says.

One reason for using specialist legal advice is the need to understand the powers of the FE corporation, "which are quite different from the powers of a company in the private sector".

A classic problem in mergers and acquisitions is information flow. Confidentiality can be crucial, yet an absence of information can allow the rumour mill to take over - with dire results. It's a scenario that Kingsway was all too familiar with.

"Four years ago, when Richard arrived, we had a lot of angry feedback from staff about the situation," says Sheila Daley, the college's director of communication. "They didn't realise that there was a serious deficit. We learned quite a lot from that."

The colleges hired an agency to handle external communications during the merger, but equal emphasis was put on getting the message out to people within the college. "There was a joint merger bulletin, one of which dealt with frequently asked questions," she says. "Carol Burgess (the principal of Westminster who retired as the merger took place) and Richard did roadshow briefings. We think we've got it about right. Staff may not feel sanguine about the merger, but they have been kept informed."

The new college will be looking to capitalise on an expanding post-16 market. To gauge its depth, the merging colleges asked the Responsive College Unit (RCU) to carry out research for them. "The brief at Westminster-Kingsway was to carry out a combined analysis of their pattern of recruitment," says Gordon Aitken of RCU. "We took the student databases of the two colleges, amalgamated them and set that against population data." This enabled the unit's statisticians to see from where the combined institutions would mostlikely be recruiting students.

The RCU - started by Lancashire 's FE unit in 1987 and spun off as an independent operation in 1993 - holds the national student database for the whole sector and individual student records for all colleges. "We were able to tell them how many of the residents in their core area were attending other FEFC institutions - which gave them an idea as to where there might be genuine under-participation," says Mr Aitken While managers might accept that complex legal and financial work is best left to the experts, surely marketing is an area where all colleges have some expertise available among staff?

"There is a view that marketing lecturers should be doing all the marketing," Mr Aitken concedes. "But would they expect the construction lecturers to get on and build the extension?" The unit sometimes asks managers to gauge the views of their staff. "Quite often it's identifying a particular group and asking: 'Is what we are doing adequate? Does it meet this group's needs?' We can sometimes identify parts of the market which are being missed year after year," he says.

Westminster-Kingsway didn't use consultants in the all-important management role. "We didn't do that, partly because we had the skill-set, and partly because we wanted to retain ownership," says Richard Williams, the principal. Where they were used, outside experts helped to move the merger along. "We have achieved one of the biggest mergers in the sector in the shortest possible timescale - andnever missed a single target date."


Responsive College Unit Marketing and catchment area information. 01772 885 999 GVA Grimley Estates management . 020 7911 2422 Communications Management Publicity and PR 01727 855327 Action in Marketing College identity and logo. 01525 261822 LLHR Logo design 0207 911 0855 Keith Scribbins Union negotiations 01761 463355 Bentley Jennison Financial analysis 0115 962 0900 Eversheds Legal advice 0207 919 4500 Lawfords Legal advice 0207 353 5099 KPMG General management 0121 230 3000


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