Guidance to institutions considering merger

26 September 2008

SFC/47/2008

http://www.sfc.ac.uk/information/info_circulars/sfc/2008/circulars_2008.html

This letter gives guidance to colleges and universities considering merger. This refreshed guidance uses the experiencegained from the assessment of merger proposals from colleges and universities and from post-merger evaluations inboth sectors.

FAO: Principals and directors of Scotland’s colleges and universities

Contact: David Baudains, Policy Officer, Strategic Development, email: dbaudains@sfc.ac.uk, Tel: 0131 313 6533

Recent SFC documents 12 September 2008 SFC/46/2008 2007-08 data return for funding purposes and audit guidance for colleges 29 August 2008 SFC/45/2008 Student and Staff Performance Indicators for Further Education Colleges in Scotland 2006-07 29 August 2008 SFC/44/2008 Financial performance indicators for Scotland’s colleges 2006-07 29 August 2008 SFC/43/2008 Efficient government 29 August 2008 SFC/42/2008 Benchmarking sector governance guides 22 August 2008 SFC/41/2008 Student support funds: 2007-08 audit guidance 22 August 2008 SFC/40/2008 Channel Islands and Isle of Man: fees for undergraduates in academic year 2008-09 22 August 2008 SFC/39/2008 Allocation of additional ESOL funding for colleges in academic year 2008-09 1 August 2008 SFC/38/2008 2008-09 student activity data guidance for colleges

Guidance to institutions considering merger

1 This letter gives guidance to colleges and universities considering merger. This refreshed guidance uses the experience gained from the assessment of merger proposals from colleges and universities and from post-merger evaluations in both sectors.

Context

2 This guidance takes into account evidence from the recent post-merger evaluations, lessons learned by the institutions concerned, and other comments received from colleges and universities who have merged or who have considered merger (see Appendix 1 for a list of these institutions). This guidance is in two parts; firstly it explains the procedures to be followed when proposing merger, and for post-merger evaluation, and then it discusses the lessons learned by institutions which have merged in recent years.

Part 1 – the role of the Council in mergers

3 The Council encourages institutions to engage in strategic dialogue and consider greater collaboration, and perhaps merger, where this would be strategically advantageous to their effective and efficient performance.

4 The Council advises the Cabinet Secretary for Education and Lifelong Learning on proposals from institutions wishing to merge, and reports on post-merger evaluations. The Cabinet Secretary will make decisions based on this advice and other consultations. In its work in this area the Council is advised by its Collaboration and Mergers Advisory Committee (CMAC). The remit of the Committee is at Appendix 2.

Procedure

5 The Council strongly recommends that institutions approach the Council’s executive early and informally in the first instance when considering merger; they may find it useful to obtain general guidance on the models for merger, proposal procedure, requirements, funding and advice on any issues that could have an impact on the outcome of the proposed merger. Stakeholder engagement is important and should be progressed early.

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Widespread consultation

6 While close attention must be paid primarily to the educational, structural and financial issues associated with merger, a merger may affect many parties in different ways, for example geographical location, changes in terms of employment or significant administrative issues. Governing bodies should ensure that the executive team consults widely with students, staff, trades unions, customers, and other stakeholders on a wide range of issues. Institutions need to provide evidence in their proposal that they have undertaken such consultation and have taken account of the responses obtained.

Agreement of the governing bodies

7 Any proposal for merger will have implications for the management and governance structure of the merged institutions. If the Cabinet Secretary approves a merger, responsibility for the subsequent academic development and financial accountability of the merged institution will ultimately lie with a single governing body. The proposal should, therefore, demonstrate the clear commitment of the governing bodies of the institutions to merger, as well as including a formal statement of agreement by the governing bodies to indicate that they understand and accept the proposed new governance arrangements and responsibilities of the new governing body.

Milestones for achieving mergers

8 A clear set of milestones should be established early on, and an action plan developed. The merger proposal should show clearly the necessary steps and timescale for achieving merger. It is essential that the partners agree a comprehensive implementation plan with target dates and milestones for the early years following merger. Major implementation issues might include internal and external communications, transfer of staff onto new terms and conditions of employment, harmonisation of information and communications technology (ICT) and systems integration, and estates and accommodation issues, including any relocation of activity.

Options appraisal

9 There are levels of joint activity ranging from independence to full merger and sometimes there will be a range of potential partners from which an institution contemplating merger could choose. Institutions should therefore undertake a comprehensive options

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appraisal to determine the likely success of a spectrum of scenarios. Market demand is an important factor in this appraisal. The Council may be willing to assist institutions with funding for external consultants if needed.

10 A financial appraisal should then focus on the more viable of these. Whilst it is clear that academic issues are of paramount importance when considering merger, the proposal must contain a thorough appraisal of the potential financial and non-financial benefits and disbenefits that would arise, agreed by all the institutions. If the merger is to involve significant capital expenditure/relocation, institutions will need to seek specific advice from the Council.

Due diligence reviews

11 The Council cannot be held responsible for any planned or unplanned deficits or additional costs or liabilities that may arise either during the consideration of, or subsequent to, the approval of a merger by the Cabinet Secretary. The burden of responsibility lies with each institution involved to perform due diligence reviews on each of the other partner institutions when considering a potential merger.

12 In the context of preparation of a formal merger proposal, a due diligence review should examine all the significant financial and non-financial aspects of the prospective merger partner institutions. It is important to include an audit of the staff’s ICT skills and benchmark them, so that the institutions can plan for ICT integration with confidence. The report arising from the review should inform the commissioning party on aspects of the prospective partner institutions that are not known to it before the review. The purpose of a due diligence review is to provide reassurance that information provided by the prospective partner for the merger is accurate to the best of all parties’ knowledge.

13 Institutions should make use of in-house and/or external expertise to carry out due diligence reviews, and should evaluate the financial health and financial and management systems of their prospective partner(s) to ensure that they are satisfied that the information on financial health, and the underlying systems which produce this information, are adequate for the period up to merger. The Council is normally willing to assist institutions to employ external assistance by providing some strategic funding.

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14 A due diligence review may not provide an exhaustive list of areas in which institutions might wish further information on their prospective merger partner(s). Institutions contemplating merger should seek details from their prospective partner(s) on any area of activity which is of concern to them and which might affect the positive outcome of a merger, so as to satisfy themselves in advance of agreeing the formal merger proposal to be sent to Ministers.

15 As well as examining past performance and systems, the review should also examine future plans, including possible future contextual change. In this respect, institutions will need to be aware of the plans and priorities of other key bodies, including the Council and the Scottish Government.

The formal merger proposal

16 In considering a merger proposal, the CMAC may ask for specific items of supplementary information after giving initial consideration to the proposal. However, when preparing the final proposal, institutions concerned should ensure that they send a single document incorporating all necessary evidence.

Process

17 The period between preliminary informal discussions and the Council’s advice to the Cabinet Secretary may often be a lengthy one and may require an extended sequence of exploratory discussion, analysis, consultation and supplementary submissions. Given the significance of the merger to the institutions concerned and to the wider tertiary education sector, the Council believes that such a detailed procedure is justified. These are the normal steps to take:

Stage 1: preparation of the merger proposal • preliminary, informal discussions between the prospective partner

institutions and the Council’s executive to obtain general guidance and advice on evidence required and a suggested procedure for submission;

• institutions should discuss procedures with the Office of the Scottish Charity Regulator which would have to give consent to any name change and dissolution of a charity;

• institution should also seek advice from the Scottish Government about secondary legislation required;

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• institutions prepare a draft proposal for merger, supported by the required evidence;

• institutions consider how they are going to consult widely on the draft proposal to ensure it is truly inclusive;

• institutions carry out the consultation; and

• governing bodies of management formally agree to propose merger, and the model to be used.

Stage 2: assessment of the merger proposal and advice to the Scottish Government

• institutions send the formal merger proposal to the Scottish

Government who in turn will seek advice from the Council;

• the Council seeks advice from CMAC;

• CMAC visits the institutions to discuss the proposal;

• CMAC makes recommendations on the proposal to the Council;

• the Council makes recommendations on the proposal to the Cabinet Secretary;

• in parallel the Scottish Government consults widely on the merger proposal as part of its consideration of the proposal;

• the Cabinet Secretary notifies the decision to the institutions concerned;

• the statutory instrument(s) laid before Parliament to close institution and any changes necessary to governance instrument; and

• the merger takes effect.

18 Based on previous experience the whole process outlined above takes a minimum of a year.

Content of merger proposals

19 The content of the merger proposal will vary according to the type of institutions proposing merger (for example the research strategy will

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be a very important aspect of a merger between universities). It should normally cover the following areas:

Aim and objectives

20 This section should consider:

• why the institutions considered merger and what purpose it will serve;

• the overall vision and objectives of merger (both real and aspirational), including the educational benefits envisaged; and

• how the proposal relates to the institutions’ strategic plans.

Options appraisal

21 This section should contain a comprehensive options appraisal identifying and discussing all reasonable options, including:

• the status quo (as projected into the future);

• collaboration with other institutions;

• the proposed merger with the preferred partner(s); and

• a merger with (an)other institution(s) where relevant.

Evidence

22 The Council requires certain evidence in support of the merger proposal. The following should be included:

Academic benefits

• that the quality, relevance, efficiency of provision in teaching, research and knowledge transfer, where applicable, would be safeguarded/enhanced;

• that the quality of the student experience will be at least maintained;

• the range/breadth of provision and qualifications would be appropriate to meet need; and

• that specialist facilities and profile would be safeguarded/ enhanced.

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Implications for tertiary education in Scotland • the fit to local/regional/national and international needs;

• other benefits such as improved student access;

• location of proposed campus(es)/sites appropriate to meet needs;

• accountability to stakeholders (local/national) provided for; and

• impact on other institutions, community learning and development, other providers and local authorities (local/national).

Financial benefits • a detailed financial plan assessing the financial implications of

merger (ie one-off costs required to facilitate merger, future recurrent costs/income of the merged institution, resources released, opportunities to grow the business and any savings expected);

• improved value-for-money;

• impact on financial health of partners;

• space utilisation/quality of premises no less adequate or enhanced;

• changes in expenditure distribution (research, teaching, support, premises, management) expected; and

• impact on institutions of not proceeding.

Issues arising from consultation with • students;

• trades unions;

• staff (including terms and conditions);

• local communities; and

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• other stakeholders and providers (schools, institutions, community learning and development etc).

Strategy

23 This section should address the merged institution’s intentions for:

• the learning and teaching, and research and knowledge transfer strategy;

• staffing issues: including restructuring plans, harmonisation of terms and conditions;

• student issues: integration of student representation, projected student numbers;

• estates issues: including an options appraisal discussing all reasonable options for future use of the existing estates; and

• intentions for systems integration, including ICT.

Governance and management

24 This section should include:

• the proposed title of merged institution;

• the intended management arrangements for the merger and beyond;

• the intended communications arrangements, both internal and external up to and following merger;

• a proposed implementation timetable;

• a risk assessment to cover all aspects of the merger, including a contingency plan;

• the key measures of success through which the new institution can judge whether the merger has been successful; and

• funding required to facilitate the merger, including a proposal for an award from the Council’s strategic funds where necessary.

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Consideration of the proposal by CMAC

25 CMAC will consider the merger proposal and discuss areas where it needs clarification and further advice from the institutions, before advising the Council. A team from the Committee will visit the institutions to discuss the merger proposal with them, including agreeing the aims and objectives, and measures of success of the merger. This baseline will effectively provide the basis of the new institution’s strategic plan. The Committee will then refine its advice to the Council and Ministers.

Strategic funds

26 The Council has assisted recent mergers of Scottish institutions by offering strategic funding to provide assistance for some of the preparatory stages of mergers and towards some of the major costs that institutions can incur that are directly merger-related. The Council issues guidance from time to time, in circular letters and on the Council’s website, on the criteria and procedure for applying for strategic funds. The Council’s executive can give more detailed advice on any application related to a merger.

27 CMAC advises the Chief Executive and the Council on the use of strategic funds.

Evaluation of approved mergers

28 The Cabinet Secretary requires the Council to undertake post-merger evaluations of all approved mergers. The main purpose is the assessment of achievements and progress against the agreed aims objectives of the merger, and the key measures of success previously identified. A secondary purpose is to enable the Council to gain information on, and experience of, the process of merger which may benefit the sector as a whole, or which may be helpful to CMAC in giving consideration to future merger proposals. Finally, it will identify whether any of the policy assumptions of the merged institutions, the Council or the Cabinet Secretary are no longer appropriate, either to mergers which have taken place, or which are now proposed.

29 If the merged institution experiences serious difficulties it is to alert the Council early so that the Council can consider whether it should intervene to assist. The Cabinet Secretary will expect the Council to bring this to his/her attention. In such circumstances institutions

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must not wait until the formal evaluation is due, but should inform the Council immediately.

30 The Council may make enquiries at any time if it feels that the merged institution is not developing as envisaged.

Process for post-merger evaluation

31 Between six months and one year following the formal date of a merger the Chair and a team from CMAC and/or the Council executive as appropriate, will meet again with the merged institution to review progress and establish the agreed baseline for future self-evaluation and scrutiny by the Committee. This visit will enable both the institution and CMAC to discuss any changes needed to the previously agreed aims and objectives, and measures of success, since the formal merger date. The Chair of the Committee will then write to the new institution setting out arrangements for a post-merger evaluation to take place at the end of the second year after merger.

32 An integral part of the post-merger evaluation will be self-assessment by the institution of the progress made against the agreed objectives of the merger. At this stage it is helpful to seek the views of stakeholders. The self-assessment document should be a succinct, but comprehensive statement of the progress made, with supporting and explanatory information provided in annexes. The Council should receive the completed self-assessment within three months of the end of the second year of the merger.

33 Following receipt of this information the Council will consider the documentation. This is likely to involve a visit to the institution by members of CMAC and the Council's executive as appropriate. The Council will then make a report to the Cabinet Secretary which will identify progress to date and the extent to which the objectives for the merger have been achieved. Institutions will have the opportunity to comment on the accuracy of the report before the Council sends it to the Cabinet Secretary and they will receive a copy of the final report.

34 In light of the first report, the Council may request further self-assessments and visits if required.

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Part 2 – Lessons from recent mergers

35 Each merger, or potential merger, will have its unique features. However, certain key factors are common to most mergers. Following recent post-merger evaluations undertaken by CMAC, the Committee has identified key areas which are likely to be most critical to a merger. The information below contains advice on each of these areas. Institutions should note this advice when considering merger. The aim of this advice is to highlight the most common challenges associated with mergers in order for institutions to deal with these adequately, or to prevent potential problems from arising.

Governance and leadership

36 The governing bodies need to demonstrate their strong commitment both in the time leading up to the merger and during implementation, and be clear that the new governing body has the task of shaping culture, developing parity of esteem and providing vision for the entire process. A clear vision supported by consistent, honest and well-thought out communications is of paramount importance, as is the need to create an empowering, transparent, communicative culture in what will be times of stress, change and uncertainty.

37 It is important to ensure that the composition of the new governing body provides the range of skills and expertise needed to oversee the new institution; new members should be selected with skills appropriate for the new and enlarged institution. Institutions are advised to form a shadow governing body early, with clear lines of authority, and to make sure members receive the training necessary for their duties. Away-days are useful to assist with training, and to enable members to get to know each other better. Staff and students’ representation should be carefully considered to ensure that this is appropriate; observer status can be useful.

38 It is advisable to plan meetings to take place at each of the merging institutions’ campuses; this enables members to develop an understanding of the physical aspects of the new institution, and helps to ensure that the new body is ‘visible’ to staff.

Leadership and management

39 Successful implementation of a merger requires a structured approach to the implementation process and to the achievement of many different tasks. It is crucial that senior managers consult regularly and thoroughly with staff and other key stakeholders including external

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stakeholders, such as local authorities, then make decisions and develop a firm plan.

40 Senior leaders within each institution need to give clear leadership, be accessible to all staff on a regular basis and also demonstrate full commitment to the merger. It is important to have adequate senior, skilled resources in place to manage both the merger implementation and ‘business as usual’. Institutions have found it helpful to use formal project management techniques.

41 A lead project manager needs to work with the appropriate project groups, assist the senior managers to maintain momentum and identify key factors in the merger implementation process. A formal project management approach will also assist in developing effective communications between the institutions merging and within their respective organisations.

42 It is essential that there is effective communication between senior managers, staff and students, and critically, that it takes place in both directions. While institutions merging will wish to normalise the merger and end the transition period as soon as possible, mergers may require careful project management for a considerable time after the date of formal merger.

43 It is important to understand that the ‘pace’ of change will vary. In the early stages of discussions, collaboration, due diligence exercises and developing a proposal the pace will be quite steady, but once the proposal has been sent to Ministers the pace of change at the institutions will speed up; staff need to be aware that this will be so and extra effort made to ensure that staff and students need are kept aware of change requirements.

44 From the early phase of merger discussions it is vitally important that the principals of the merging institutions develop an excellent working relationship.

45 Institutions should consider the process by which they would identify staff for key leadership roles in the new institution. Team-working is also an important aspect and new teams should be developed at a very early stage, and encouraged to work together.

Consultation and communication

46 Internal communication problems and misunderstandings are considerable risks, and these can result in dips in staff and students’ morale. Two-way communication is extremely important.

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Management should consider and listen to all views and opinions, and staff should be able to participate fully and take ownership of the merger.

47 Senior management should ensure that a well thought-out communications plan is developed for staff, students and stakeholders to address key concerns. Using staff who have been designated and trained as ‘communications links’ pays dividends and can help to allay fears, especially when a small institution is merging with a much bigger organisation.

48 Where a merger involves the maintenance or creation of a geographically distinct campus(es), the need for a visible presence on all campus(es) by senior management of the new institution is often critical. Staff and students need to believe and feel that they have open lines of communication to the senior management and that they do not perceive that they are working at a lesser or subsidiary campus.

49 It is vital to ensure that the student voice is heard through representation and involvement. ‘Issues post-boxes’ for staff and students can provide a useful tool, but it is important to give feedback regularly, in order to maintain credibility. Similarly a staff and student newsletter provides another link.

Staffing

50 Merger is a very sensitive time for staff; they will feel insecure if they do not feel part of the process. They should be involved at every stage and consulted regularly and frequently. It is vital to engage with the trades unions early and regularly. Institutions should involve people in developing a new structure and consult staff. If possible, it is helpful to adopt the top level structure from merger date and decide on the remaining tiers of management in clearly-defined phases.

51 Transfer of Undertakings legislation will normally apply when a merger takes place, and the institutions should take legal advice on this issue. It is sometimes an objective in a merger that staff will transfer to a single set of terms and conditions within a transitional period. Institutions should be realistic about the prospects of transfer to new contracts. Experience from some post-merger evaluations is that progress on this aim is often slower than was expected at the time of the merger. It requires a clear implementation plan and timetable, and possibly incentives. Amongst the most common

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reasons for the delay are differences in holiday entitlement and pay and pensions.

52 Adopting open dialogue and an honest approach with staff helps to develop trust; it is vital to recognise where people have got to in the pattern of change, and understand the distance they had travelled. It is important that staff (particularly those from a smaller institution) realise the opportunity to progress across the new organisation. Institutions should be sensitive to differences of scale and geographical differences, and integrate staff quickly into a shared understanding of the new institution. They should recognise a shared sense of interests and anxieties which will be felt across all campuses. Merging institutions have noted that reactions can vary: for example there can be enthusiasm from staff arising from the opening of opportunities a merger can create; there can be a pattern of: initial shock, followed by arousal of interest and then either a sense of joining in or moving on.

53 Encouraging staff to search out and identify good practice jointly helps building teams, and ensures that the adopted practice is a shared one. Similarly, encouraging staff to experience other campuses can help to develop a better understanding of the new institution, but cross-campus working in the new institution should be carefully programmed to avoid unnecessary travel.

Voluntary severance/voluntary early retirement

54 In some cases institutions have used a voluntary severance/voluntary early retirement scheme to help them achieve the new staff structure as quickly as possible, and to make savings. It is important from an early stage to build trust and be honest about not guaranteeing permanent posts in the new institution, if this is the case. It is vital to handle exits well, so that staff leaving do so on good terms.

Students

55 Students will be a key focus for any institution going through a merger. Consultation across all campuses is vital; students need to feel that their voice is being heard. Although some disruption is inevitable during the merger implementation process, this should be kept to a minimum. The opportunity to develop a well-researched, robust students’ union/association leading to effective merger should be pursued. With a merger between institutions of differing size then the new institution should take particular care, with the support of the students’ union/association, to ensure that those students from

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the smaller institution(s) feel welcomed, and are quickly integrated into the merged institution. Where there is a multi-campus structure any disparities in provision between campuses will be obvious. If students at one campus do not have easy access or have reduced access to certain facilities, then there will undoubtedly be an expectation from students for facilities and student support services to be in line with those provided elsewhere at the merged institution.

56 Where an objective of the merger is the expansion of curriculum opportunities, targets for achieving this should be realistic and achievable. If the student experience is negative there is the risk that students will graduate with a negative impression of the institution, and this could in turn affect future student recruitment and the overall reputation of the merged institution. It is vital that students are aware of all merger developments and how these developments will affect them directly.

57 Ensuring the quality of the student experience for current continuing students should be a fundamental priority; disruption for the students can have a significant effect on the merged institution’s reputation and future student recruitment. It is important that the standard of facilities and student support should not decline.

The name and the brand

58 The name of the new institution should be carefully considered; whether it is that of one of the merging partners or a new name; staff, students and other stakeholders, locally, nationally and internationally, may identify with a former name, and alumni may question a loss of identity. Stakeholders and local communities may have particular views on the potential impact of any name change.

59 It is important to develop the brand of the new institution early and to make all stakeholders aware of the new institution and what it can provide. Care is needed to ensure that positive legacies associated with the merging institutions are not lost. Early opportunity to promote the new institution’s ‘way of doing things’ should be taken. Merged institutions should ensure that stakeholders are well-informed of courses available, especially where changes are made, particularly key partners such as local authorities and schools.

Research

60 When a merger brings together institutions that are at a different level of activity in research, introducing a research culture to staff who may

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not have a long tradition of research is a considerable task. It is critically important for senior management to develop a research strategy with a comprehensive plan and timeline for achieving objectives. A lack of research training and shortage of time to be able to dedicate to research are often the main obstacles to achieving objectives. The provision of research training for staff and a support network is necessary, possibly in the form of a staff mentoring scheme.

61 Staff in non research-active institutions have often had a far higher teaching load than those in research-active ones. Obtaining an appropriate balance between the two activities will assist the development of a research culture. Where staff remain on a contract of employment that does not require them to conduct research there is often an added barrier to change. If after consideration of the above, the development of research remains a major task, the institution should also consider recruiting new staff.

Geographical/estates issues

62 A successful merger does not have to involve co-location. Even when co-location is an aim, it often cannot happen until several years after the formal merger date. Well thought-out plans and effective management can help ensure that separate locations are integrated and can fulfil the objectives of the merger. But, without effective management, geographical distance can cause communication difficulties in the development of the synergies which are often the main objective of a merger.

63 Particular thought should be given to matching expectation and delivery when relocation is necessary. Delays are common when relying on external factors; therefore a contingency plan is essential where there are property/land sales or purchases or a need for decant facilities. Robust planning and project management is essential, and any relocation should happen as quickly as possible, supported by fit-for-purpose accommodation for decanting.

Compatibility of ICT systems

64 Integrating ICT systems can be one of the most challenging tasks during a merger; it could be a high risk task, the size of which should not be under-estimated. Opportunities for realising a step-change in ICT capability and achieving improved business process should be explored. A risk assessment and risk management strategy is essential.

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65 It is important to agree the project leader’s remit and decide whether the project is best led by internal staff/consultants or a combination. Institutions are advised to appoint a project leader at the appropriate level early; project management can sometimes be carried out by existing staff, if the institution is confident that the necessary expertise is in house; this should have been established during the due diligence exercise – see above.

66 Consultation both internally with managers to determine their needs, and externally with other institutions will help to develop a clear strategy (for example: new system or integrate former systems). The institutions should consider the compatibility of ICT, administrative and all other systems used at the merging institutions. ICT staff should estimate the cost of integrating systems early in the process and make adequate provision for integration, drawing on external consultants if necessary. Institutions have often found the integrating ICT systems can be more expensive than they estimated and it is important to assign adequate resources to this vital area. Funding of ICT at an early stage is a critical factor in developing clear criteria and objectives.

67 Adequate training and team working is necessary for those adopting new systems. Careful planning to ensure that staff are aware of all systems (not just ICT) not only prevents wastage of time and resources, but also as importantly, it builds staff confidence in the planning and implementation of the merger.

68 At the testing stage institutions should select and test appropriate software rigorously, involving managers regularly.

Timescales

69 When calculating timetables for a merger it is important not to be over-optimistic. Objectives need to be long-term and realistic. While many of the instrumental aspects of a merger (the merging of administration, the creation of a new identity etc) can be achieved quickly, many of the benefits can take longer to materialise. New programmes taking advantage of the synergies brought about by the merger, can take some time to establish. Where the staffs of the institutions are on different sets of conditions of service, it can take time to transfer all staff to one set of conditions.

70 In deciding what length of time the ‘transitional period’ should be, institutions should be aware that many of the benefits of the merger will not be fully achievable within that time. Having laid the

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foundations, it is over-optimistic to assume that benefits will inevitably flow without further action. As stated in the section above on project management, institutions should make arrangements to continue to actively manage those matters that will not be dealt with within the transitional period.

In conclusion

71 Experience of post-merger evaluations has shown that in the most successful mergers, institutions have tackled not only the ‘hard’ issues such as estates and ICT systems, but also the ‘softer’ issues of staff morale, accessibility of senior management and, where appropriate building on the particular focus or brand of the former institutions/institutions.

Further information

72 For further information contact David Baudains, Policy Officer, Strategic Development, Tel: 0131 313 6533, email: dbaudains@sfc.ac.uk.

MTS Batho Chief Executive

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Appendix 1

Institutions who have merged to which the Council has granted strategic funds

Colleges which have merged

Glasgow College of Building and Printing and Glasgow College of Food Technology to form Glasgow Metropolitan College – 1 August 2004 Fife and Glenrothes Colleges to form Adam Smith College – 1 August 2005 Clackmannan and Falkirk Colleges to form Forth Valley College – 1 August 2005 Universities which have merged

Scottish College of Textiles and Heriot-Watt University – 1 August 1998 Moray House Institute of Education and the University of Edinburgh – 1 August 1998 Saint Andrew’s College of Education and the University of Glasgow – 1 April 1999 Northern College of Education (in part) and the University of Aberdeen and Northern College (in part) and the University of Dundee – 1 December 2001 Bell College and the University of Paisley to form the University of the West of Scotland – 1 August 2007 Universities which have merged departments

The University of Dundee transferred Management and Consumer Studies to the University of Abertay, Dundee – AY 1999-2000 to AY 2003-04 The University of Glasgow and the University of Strathclyde formed a joint Department of Naval Architecture and Marine Engineering – August 2002. The University of Glasgow and the University of Strathclyde formed the Glasgow School of Social Work on 1 August 2003

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Edinburgh College of Art, Heriot-Watt University and the University of Edinburgh formed a jointly owned Edinburgh School of Architecture – May 2006 ongoing Cross sector partial merger

Borders College is relocating to the Scottish Borders Campus of Heriot-Watt University, where the institutions will partially merge their Business and Management Schools and some support services – ongoing

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Appendix 2

Remit of the Collaboration and Mergers Advisory Committee

The Committee will advise the Council on:

• merger proposals referred to the Council by the Minister;

• proposals for strategic funding to support institutions considering merger development and subsequent merger implementation;

• proposals for strategic funding to support institutions working collaboratively to implement major structural change at academic and/or support functions level; and

• issues and procedures related to mergers and major strategic collaboration across the sectors.

Note: For the avoidance of doubt, the Council will continue to fund research collaboration and major estates developments through its separate grants for these purposes. In carrying out its work the Committee will:

• assess and make recommendations on proposals for strategic funding;

• evaluate and report to the Council on the progress of approved mergers;

• evaluate the impact of collaborative strategic projects funded by the Council;

• review periodically the principles and criteria for mergers and advise the Council accordingly; and

• be alert to the need to make or receive inputs to or from other Council committees or groups about issues which cut across the remits of more than one committee.

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t 0131 313 6500f 0131 313 6501www.sfc.ac.uk