Are mergers the only answer to swingeing cuts? by Sally Dicketts @SallyDicketts

There is no denying that times are incredibly tough for the further education sector. We know that the next three years will bring swingeing cuts to our adult budgets and potential reductions in unit resource for 16 to 19 year olds. Management teams in every college in the country will be exploring the impact of this on their profit and loss account and seeking new ways to generate income and save costs. Financial pressures are nothing new, but I can’t remember a time when the position has been quite so stark. Finance, or lack of it, remains one of the key drivers pushing colleges to merge. We have certainly seen a recent flurry of merger activity, a process made simpler by the 2010 Education Act. But are mergers the only answer to achieving financial stability amidst a sea of cuts? I believe there are alternatives. Merger is part of our history at Activate Learning. As Oxford & Cherwell Valley College, we merged three further education colleges in Oxfordshire. When we took over responsibility for Reading College in 2010 we decided to bring it into the group but not to pursue a full blown merger. This has undoubtedly brought benefits of scale and we have been able to use our size to diversify into new areas and reduce our reliance on further education funding streams. We have entered the schools market, grown our international provision and launched a training and consultancy company under an employee shared ownership model. But we have also been able to develop a shared services model which other colleges are benefitting from. This is an approach also taken by The Ten Group in Norwich.

The shared services model works for business support services – such as HR, payroll, IT, facilities and marketing – but it also works for curriculum. We have been working with other colleges on curriculum design and on sharing resources and expertise. I am interested in a model where colleges with shared specialisms in particular curriculum areas could work together to create national centres of excellence. That would benefit the institutions but it would also benefit learners who could access a greater breadth of course content and knowledge. This type of arrangement can also work through informal networks and groups. Through our membership of the Gazelle Colleges network we have been working to develop our approach to STEM. This joining together means we can share the procurement costs of research and expertise. While mergers work for many colleges, the benefits of exploring a shared services model are clear. Colleges can reduce costs while maintaining their identity and local autonomy, and while avoiding large scale organisational change. I believe that there are alternatives to merger that can help the sector to survive a turbulent future.