Defining mergers and federations
Mergers are not takeovers. Takeovers imply that amongst two or more organisations, one is the wholly dominant body, and subsumes the other organisation(s) within it. No new body is created. Mergers on the other hand create a new single body built upon the voluntary coming together of existing bodies.
Even where mergers are taken forward on the basis of a host model (see Models of merger), it typically involves the drawing in of best practice from the range of organisations coming together to merge into the one new entity.
We can similarly contrast federations and cooperation models. Cooperation and coordination are positive relationships amongst wholly independent organisations that set their own priorities and choose when and when not to deal with others.
Federations involve much more than mere cooperation or coordination. They involve a central strategy and resource allocation to which all organisations are bound, and involve shared decision making, and shared operations. Individual organisations in a federation do not have the freedom to choose when and when not to cooperate and coordinate. Neither do they have the option to leave the federation except in a fundamental reorganisation after due process.
Robust federations are likely to be seen by SFC and Government as valid responses where they create structures that can effectively deliver regional outcome agreements.
What are the distinguishing features of mergers and federations?
Decision in principle to merge or federate
This guidance was developed in 2012 and will be reviewed.
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