Mergers doomed to failure

20th October 2006 at 01:00
Schools that join forces face problems uncannily similar to those of merged companies, often with unhappy outcomes

Merge two big firms and, odds are, the new company's share price will plummet and the merger will fail outright - or at least fall short of its stated goals. Merge two schools and the outcome is uncannily similar.

Research by the Hay Group, a management consultancy, shows that the push to save money by combining schools has created bigger but poorer schools.

Although the original schools were often struggling, the long-term results of 55 per cent of the new super-schools were worse than those of their predecessors.

At secondary level, 68 per cent of merged schools achieved lower GSCE grades; at primary level, half had worse key stage 2 results after three years.

Russell Hobby, the author of the study, said the results were startlingly similar to corporate mergers: "Between 50 and 70 per cent of corporate mergers either fail outright or fall short of their stated objectives," he said, "and, on average, the share price of a company falls by 10 per cent in the year following a merger."

This should sound a cautious note for ministers, he said, with its drive for amalgamations through academies, the forced closure of failing schools, Building Schools for the Future, and a response to falling rolls in primaries.

"While not on the same scale as the corporate mega deals, schools underpin local prosperity and cohesion. A decline in standards over a period of years can affect the futures of hundreds of students."

Listing disastrous corporate mergers and acquisitions is as easy as recalling the newspaper headlines: the culture clash of the Vodafone and Mannesman merger in 2000; the embarrassment of AOL and Time Warner in 2001.

Identifying school mergers gone bad is a more local, more poignant business. In Burnley, it is far too early to judge the academic performance of Hameldon community college, formed last month from two secondaries. But parents appear to have already made up their minds on its wider merits: 50 attended a public meeting last week to demand action on allegations of knife violence, after police were called to the school 19 times in its first few weeks.

Mr Hobby said the key to successful school mergers was vision and speed: appointing the leadership team early and making sure they stated unified goals for the new school clearly.

In the inevitable culture clashes there will be staff vying for jobs, arguments over uniforms, mottos, job titles, and inclusion versus academic excellence.

"It's about getting the conflict out in the open, being honest rather than being loyal," he said. "Sometimes you have to be blunt and say, this is how it's going to be. There's going to be pain."

In Halifax, The Ridings school was formed from a merger in 1994 but was dogged by problems from the start. In 1996 it was dubbed "The School from Hell" and "Britain's Worst School", and a new head was forced to exclude 33 pupils in one day.

And in Leicester, the 1,600-pupil New College was created under the Government's fresh start initiative from the merger of three comprehensives in 1999. Its local authority took the unprecedented step of imposing its own special measures in 2002. Forty teachers threatened to walk out after suffering 12 assaults at the hands of pupils, and a general knowledge study found that only three of 200 Year 7 pupils knew what had happened on September 11, 2001.

Dame Dela Smith, the executive head of the new 1400-pupil Darlington Education Village, expressed sympathy: she had faced problems reassuring individual heads about their loss of autonomy, but believed the difficulties were surmountable.

But Russell Hobby offered some good news from the 21 per cent of schools that clearly benefited from mergers: "School mergers are not merely a matter of logistics and infrastructure; they are a blend of potentially divergent cultures, ambitions and communities," he said. "They are not a bad thing, and can form a useful part of the strategy for raising standards."

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