Models of merger
There are essentially two types of merger currently being discussed in the college sector. These are a 'phoenix' model or a 'host' model as described below. Both models have been used in previous mergers.
In the University sector all recent mergers have been host models. In the college sector three mergers have used the host model approach and two have followed the phoenix model. From SFC's experience of these mergers there is no strong correlation between the model of merger and the success or otherwise of the merger or even of the way that the merger is perceived by staff.
However, we again emphasise that decisions on college mergers are ultimately for Ministers, whose job it also is to promote the necessary legislation.
The 2009 LSN research report, Understanding FE Mergers, outlines that a shared vision and the communications of the drivers for merger are more critical in how the merger is perceived than the actual mechanics of the model for merger. That said, early consideration, and potential agreement, of the model for merger is a key step in the merger process as it enables many other key decisions to be made.
When using the phoenix model an entirely new institution is established, with a new chair and Board members. This new Board will be responsible for implementing the merger post-Vesting Day. It needs to become a fundable body and then take over provision, employment of staff, assets and liabilities. The existing colleges are dissolved by the Scottish Government. Three statutory instruments are required for this model of merger.
Using the host model one of the existing colleges acts as the legal vehicle for creating the new college. Its board is reformed to include members from the other college. It then takes over provision, employment of staff, assets and liabilities. The remaining college is eventually dissolved by the Scottish Government. In cases where a change of name is required then this is usually undertaken on a separate, but concurrent timescale.
It is worth emphasising that where the host model is used there is a range of possible outcomes. While the essential characteristic is that the board of one college is used as a vehicle for creating the new entity, there are other things that might or might not change. These include the name, board membership, the principal and the terms and conditions of staff. In some host models there is a great deal of change and the genuine creation of a changed entity. In others, particularly in very asymmetric mergers (a very large institution with a very small institution) this does not happen.
It is worth considering the impact of each of the models on the speed, and maintaining momentum, buy-in from boards and staff and risk of the process being derailed.
Models of merger key considerations
Comparison of Host and Phoenix Models [PDF]