Merger - it's all in the planning

4th June 2010 at 01:00

Julie Tolley raises interesting issues around college mergers ("After so many mergers, why so few statistics", Letters, May 14).

The plea for more analysis of "before" and "after" data of merged colleges will, sadly, never be delivered in the controlled way Ms Tolley hopes for - and even if it was, it would not improve future mergers.

In our experience, the lack of data is due to poor pre-merger planning and a clear rationale to support the proposal. Lack of experience and a tendency for governors and managers to protect their own college obstructs rational decision-making. There is often no clear view on staffing, curriculum and premises on day one of a merger, and financial planning sometimes consists of adding together the colleges' forecasts, leaving no way to measure financial success.

Cost control and curriculum restructuring are vital to a successful merger but often ignored in the early stages, only to be forced on the parties later when financial benefits have failed to be delivered. Collecting data on successful mergers retrospectively will not lead to better planned mergers. Every college and thus every merger is different and requires separate analysis. Good-quality management is paramount in mergers, but sometimes lacking.

Most mergers are takeovers by a strong college of a financially weaker one. In our view, the success in such situations depends on a small number of factors: the strength and vision of governors and management of the dominant college; the quality of pre-merger planning; and the amount of finance available to the merged entity.

It is hard to predict how the first two factors will be met, but our worry is that recent change in government policy means colleges will have to finance any merger. Under the previous government, funding for mergers was withdrawn - a potentially risky step as it encourages ill-planned mergers in which colleges will be obliged to cut corners to save money. Post- merger analysis will not help in such a situation.

Whatever funding bodies the sector may have, we hope they will realise that realistic, well-planned and well-funded proposals are the only way to deliver successful mergers.

Neil Reed, Senior associate director, MCA Cooper Associates.

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