Role of the Council in merger (or federation)
SFC recommends that institutions approach their executive early and informally in the first instance to discuss the merger or federation process and timescales.
SFC can provide general guidance on:
- Federation requirements.
- Models for merger.
- Developing a proposal.
- Governance issues.
- Communication and consultation.
- Any issues that could have an impact on the outcome of the proposed federation or merger.
Go to the merger process for key steps and milestones in the merger process.
SFC may also be able to provide strategic funding to support the merger process and merger implementation.
During the early stages of developing a proposal for merger or federation SFC will work directly with the senior managers and boards of management/governors of institutions to provide advice and support as they develop their proposal.
Later in the process, once the Boards/Governors have submitted their proposal to merge or federate to Ministers, SFC has a more formal role, where Ministers will ask for its advice. Ministers will make a decision based on this advice and other consultations.
SFC also has a formal role two years post-merger when Ministers request a post-merger evaluation.
SFC may be able to provide strategic funding to support institutions through some of the necessary steps required to achieve merger or a strong federation. In the past this has been separated into pre-merger "enabling" funding and merger implementation funding (to deliver and implement the merger following a formal decision from Ministers). This should be discussed at an early stage with SFC.
Recent experience suggests there are advantages to be gained by taking some important actions prior to Vesting Date (or prior to the final establishment of a strong federation). This most noticeably includes institutions enacting any required voluntary severance or voluntary redundancy schemes as soon as funds are made available. Typically, this will involve the use of some reserve funds and also SFC transition or strategic funds. Early consideration of the proposed staffing structure for the new institution is required, to ensure that decisions on applications for voluntary severance are prudent and will realise savings rather than incur replacement costs.
By undertaking such actions at an early stage, there will be efficiency savings gained much earlier in the process. It will also ease the process of restructuring.
SFC also has a formal role two years post-merger when it is asked to prepare a post-merger evaluation, which will include evaluation of costs incurred and savings realised. In some recent mergers SFC has also been asked to monitor the early implementation of mergers. It is advised by its committees and subcommittees in its merger work and will keep partners up to date on processes and procedures.
It is likely that SFC will want to review federations in a similar manner to mergers. Federations will be expected to deliver the same levels of efficiency gains and educational improvements as merged institutions.
This guidance was developed in 2012 and will be reviewed in 2017.
Your feedback is important so let us know where you have used it or how it can be improved by contacting Linda McLeod, email: firstname.lastname@example.org.