governors briefing coleg gwent, ystrad mynach and university of wales, newport project steering...

Governors Briefing Coleg Gwent, Ystrad Mynach and University of Wales, Newport

Project Steering Group, May 2010

Education

ADVISORY

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The project scope

Option 1 Retain the Status Quo

Option 2 Merger of all three institutions

Option 3 Merger of the two FE colleges with enhanced links to the University of Wales Newport

Option 4 A strategic alliance between the three which falls short of merger but which may involve shared services and/or a joint venture

Option 5 Any other option which is in line with national and international best practice


Our methodology

Desk Research Socio-economic analysis, Strategic plans, finances, curriculum, estates etc

70% complete

Consultation Governors, Staff groups, DCELLS, Local Authorities, Business, Other providers etc

80% complete Evaluation

just beginning


What are the strategic options available? Defining Terms

Term Common usage Key analysis

‘Hard’ federation All institutions are within a single accountability

framework and a single corporation. A shared senior management team and shared back office services.

FE colleges do not have the same level of flexibility to establish “ hard federations” as do schools.

‘Soft’ federation

A group of FE colleges, and possibly other institutions such as 6th Form colleges, work together.

This arrangement can be used to procure services, obtain funding or share back office functions.

It can also be used as a vehicle for sharing the delivery of front line services

This type of federation should be seen as ‘collaborative’ or ‘co-ordinated’ as it involves two or more distinct legal institutions working together. It can be formalised via a company structure or less formally by a memorandum of understanding . In each case, each individual college can walk away at any time as each institutions retains their legal identity and does not cede any powers or responsibilities.


Defining Terms


Joint Ventures and college companies

A joint venture is any substantial arrangement entered into formally with another organisation for business purposes

Colleges may establish companies ( the powers were widened in the Companies Act and Education Act 2006) but must always obtain permission – with the SFA in England and WAG in Wales. The FE and Training Act 2007 (for FE colleges in England and Wales ) appears to prevent colleges becoming companies. New Guidance is being prepared by the SFA in England.

Colleges can become members of Federations of schools or take part in a Trust with a school via a “ Joint Committee”

Such arrangements vary from small projects via an informal arrangement with an external party to larger projects which have a joint venture board comprising representatives of each of the joint ventures. This may or may not be formalised by a company structure

All companies will be subsidiaries as the status of the FE college will always take precedence.


Defining Terms


Merger • This is where two or more institutions come together to form a larger organisation.

• The dissolution of one or more FE corporations and the assets and liabilities transferred to a new or revised FE corporation.

• FE colleges can merge with HEI’s. In this case, the HEI Governing Council becomes the Accountable body and assumes the assets, liabilities and responsibilities of the FE corporation. The assets and liabilities are usually protected in a Trust Deed

• Where a college takes over a private provider, this is an AQUISITION rather then a merger. Most recently in England, the fiscal crisis has resulted in the latest Type B mergers having some features of an acquisition, in that no public money is being made available to support the merger.

Type A - when the corporations of all colleges involved are dissolved and a completely new Board, with a new Principal is established. Many of the most recent Type A mergers in England and Wales have been “ tactical”.

Type B – one college assumes the responsibilities, assets and liabilities of one or more FE colleges. Usually the principal of the college assuming the assets continues in post. The Governing Body of the larger college includes representation from the college being merged. This type of merger is commonly used where one college is financially weaker than the other, or is significantly smaller.


College infrastructure models

Sunderland•Single Accounting Officer•‘Shared sovereignty’ between GFE and 6th Form provision in schools•6th Forms legally subsidiary parts of GFE•Each Head of 6th Form is Associate Principal•Maintains strong brand identity•Similar model operating in Derby

Sheffield

•A ‘hub & spoke’ model•Single administrative centre•Centre of specialism with own brand identity

Deeside College Merger to create “ specialisms” Has a developed employer and land based focus Merged with Welsh College of Horticulture Planned merger with Coleg Llysfasi

The Gower College ( Aug 2010) - A single college formed for the Swansea area

NewcastleLarge college with FE and HE provisionGrowth through acquisition of Carter & Carter and Type B merger with Skelmersdale CollegeLocal identity and sub-branding used extensively

The Manchester College

Similar to Newcastle. Utilises local branding to retain local identity. Various other initiatives marketed through separate companies/joint ventures


Federations in FE and for FE/HE

SURF Staffordshire University Regional Federation Successful federation of FE colleges and an HEI

FE SussexMultiple Accounting Officers•Ltd company of 12 colleges•All principals on board with full time CEO•Collaboration on funding, procurement, shared services etc.•Shared services

Durham- a MEG college HE in FE •Single Accountable Officer•Mixed economy model•Combination of FE and HE provision•Single CEO/principal with specified Director responsible for HE provision reporting in to overall structure

FE Plus A federation of the 6 GFE’s in the Tees Valley


What have we learnt from abroad?

The Dutch modelSmaller colleges merged to larger regional organisations . Local “ college” delivery arms

The Australian modelTechnical and Further EducationStrong vocational focus

The Canadian model•British Columbia / VancouverAn integrated model across school/FE/HE

The American modelCommunity-colleges offering further And higher education

Northern Ireland 16 colleges merged to 6


College Size What does the literature say?

Is bigger better?

Broadly speaking – theory of economies of scale well-established (Smith, latterly Payne and Perry & Fletcher).

Current UK sector has broad range of turnover:

Small (<£5m )

Medium (£14-29m)

Large (>£29m) (Payne)

But there are “good and bad colleges at all sizes, and many outliers.” (Perry & Fletcher)

Is there an optimum size of college?

…or a critical mass beneath which no institution can offer high-quality FE provision?

No consensus on best size for a college from consultees nor clear answer from available data.

Some ‘optimum sizes’ identified in the course of consultation and research:

No smaller than £15m turnover p.a. (Webb)

No smaller than £40m (Vice Principal, London)

£25m-£40m (Principal, North-east)

£100m (Principal, South-west)


What does the data show?

Larger colleges appear to offer better value for money than smaller colleges without reducing academic outcomes

These conclusions have been drawn from analysis of data taken from the LSC’s own figures. We are aware of some concerns over the accuracy of this data so would caution against drawing firm conclusions on the basis of this data.

Given these caveats, it is possible to demonstrate the following general conclusions:

Value for money: larger colleges have lower administration costs as a percentage of total costs than smaller colleges

Success rates: size of college has very little impact on success rates – although there is a slight positive correlation between college size and success rates

Quality of provision and learner experience: larger colleges score better against these than smaller colleges (based on Ofsted gradings, as analysed by Perry & Fletcher).

Graph showing correlation between college size and Ofsted inspection grade (Perry & Fletcher 2008)


Where do learners come from ? Map showing Coleg Gwent Learners


Map showing Ystrad Mynach College Learners


Welsh College Allocations 2008/09

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2008/09 Allocation

P ost Mergers

The 2008/09 allocations indicate that Gwent is the largest College in Wales representing 13.4% of the Further Education Allocation in Wales which is significantly bigger that the other colleges as the next biggest has 7.2% of the allocation

Barry College + Coleg Glan Hafren merger would potentially be £26.1 Million pound institution

Gorseinon College + Swansea College merger would potentially be £26.1 Million pound institution

Coleg Llysfasi + Deeside College + Welsh College of Horticulture merger would potentially be a £19.6 Million pound institution


2008/09 Allocation comparisons of college size ( income) in England and Wales

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Using the 2008/09 allocations a comparison of the Welsh Colleges ranked against the 239 GFE English Colleges indicates that Coleg Gwent would be equivalent to the 13 largest College. The rest of the Welsh Colleges would be below position 175. In addition the gradient of the two lines suggests that there is more consistency between the sizes of the Colleges compared to the Welsh Colleges.

English Colleges

Welsh Colleges


Progress to date - Stakeholder Consultation

KEY POINTS

• General confusion as to the intention of the FE colleges in undertaking the study: most respondents think that merger is the only option being explored;

• Strong agreement that a formalised link with University of Wales Newport will enhance learner participation and progression, although there is concern that links to other HE institutions will still be possible where this is in the best interest of the learner.


Key points continued

• General agreement that the status quo is not sustainable. Reasons provided include:

- the level of need in the area is so high it needs greater partnerships between all providers, including schools, FE and HE to provide clear access and progression routes

- funding will be tight in the future so there is a need for a coherent curriculum plan across the whole area to avoid duplication where this can be avoided

• Strong agreement and support for the formalisation of links between UWN and the colleges

• A single interface between the 5 LA’s and post 16 will be welcomed and go some way to combating the complexities within each LA of pre and post 16.

• Acknowledgement that a “strategic alliance” between the 2 colleges which falls short of merger is likely to be only partially effective and would represent the “ middle way”

• Merger would present an opportunity for a fresh start with a brand new organisation – old arguments and barriers could be swept away

• A merged FE organisation would have greater status and higher visibility for the community and employers especially if it had clear progression routes to HE


Key points continued

Concerns expressed include:

• The merger of all three would form too large an organisation for the rest of Wales – and would threaten the HE status of UWN

• FE would get lost in the HE environment

• The merger of the two FE colleges would also create an organisation which is out of kilter with the size of the rest of the Welsh FE sector

• Coleg Gwent has still not “ merged” from the last time; adding another site would be a retrograde step and threaten progress just beginning to be made

• Merger could threaten the unity and single focus of Ystrad Mynach and “suck” it into the “troubles” of Coleg Gwent

• Some suggestion that alternative merger partners may be available for Ystrad Mynach

governors briefing coleg gwent, ystrad mynach and university of wales, newport project steering...

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