Merger - Scottish Funding Council

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In a merger one or more institutions cease to exist as a legal entity and are incorporated into a new or existing institution.

Mergers can be beneficial in that they can:

Improve efficiency and effectiveness.

Combine collective talent, expertise, and resources to create a stronger, more resilient staffing structure, which expands opportunities for professional development and protects local jobs.

Become more financially resilient, with a robust strategy better placed to respond to the changes and challenges in difficult financial environments.

Develop a tertiary curriculum to provide a wider learning offer for students, aligned with the priorities of the Scottish Government and the future skills needs of regional economy need.

Grow research and innovation collaboratively to create greater impact.

Focus collective strength on pursuing key commercial and business development opportunities.

Enhance the student experience by providing a more consistent, high-quality experience across learning and teaching and support, including improved access to technology, facilities, and social opportunities.

Steps towards a successful merger

The following list offers a summary guide to the key phases of a merger including interactions with the Scottish Government and the Scottish Charity Regulator. Similarly, the case study below regarding the Rural and Island Colleges merger (which resulted in the establishment of UHI North, West and Hebrides) includes a timeline and discussion of major milestones.

Define the case for merger.

Carry out an options appraisal.

Undertake early discussions with staff and students.

Obtain the agreement of the governing bodies concerned.

Create a Partnership Board (including staff and student representation) with a Partnership Agreement.

Appoint a project manager.

Conduct due diligence (financial and legal).

Begin preparing the merger proposal, including the business case.

Consider the best merger model (see a comparison of Host and Phoenix Models).

Begin discussions with the Scottish Government.

Ensure consultation and ongoing communications.

Engage with Discussion the Office of the Scottish Charity Regulator (OSCR).

Finalise the merger proposal document, including the business case, and submit to SFC/SG.

Key things to consider when exploring a merger:

How to protect the learning experience of current and incoming students.

How to support staff and maintain their sense of belonging.

How to manage the challenges of a changing work culture.

How to understand the unintended consequences from pursuing a merger?

How to avoid the risk of the merger being perceived as a takeover.

How to create and protect the protect the identity of the new institution being created through the merger.

How the merger might impact on the provision of tertiary education in the wider region.

How to navigate the period of instability created by the merger.

With a merger, SFC has an important role from the beginning of the process, and we expect institutions to inform us at the earliest stage of discussion. Our role is more explicit that in some of the other partnerships, and more detail about what our engagement looks like is explored in the UHI Rural and Island Colleges Merger case study. It will include reviewing an options appraisal, engagement in any Boards/groups established to oversee the merger process, and regular communication and meetings with the institutions involved in the merger.

Case studies

UHI North, West and Hebrides

This is a case study of the Rural and Island Colleges Merger (RICM) and will be updated as the merger continues, and the new college begins to engage with post-merger implementation and activities.

The purpose of this case study is to set out some of the key milestones involved in a merger and provide an indication of the timescales involved. Please note however, that the timeline below is specific to this merger only – a range of factors have the potential to impact on the merger process, including consultation periods, parliamentary processes and legislative requirements, and agreeing funding support.

A range of other activities not noted here will have been taking place between the merging partners, including developing curriculum, communications and shared services strategies, as well as the establishment a range of cross-partner workstreams. Further detail on these will be provided in due course.

The role of SFC throughout the merger been providing support to the merging partners (through the provision of information, advice and guidance, and funding) and being a liaison between the merging colleges and the Scottish Government.

See timeline.

University College London mergers

Between 2012 and 2014, UCL underwent mergers with two institutions to create the UCL School of Pharmacy and the UCL Institute of Education. These mergers not only grew the scale of UCL’s offering, but created new opportunities to expand provision, increase industry engagement and extend their global influence on stakeholders. The IOE merger enabled new and imaginative ways of working with schools and colleges and deepened cross-disciplinary work across the full range of education, culture, psychology, and social science, whilst the School of Pharmacy became the largest grouping of biomedical research, offering new opportunities for pharmacy education and research and providing students with one of the best student experiences in the UK.

The IOE merger started off as a strategic collaborations, where staff from the respective institutions started working together on a series of projects which had small pots of funding attached to them. This approach helped when then discussing the prospect of a merger as staff already had developed positive working relationships and were comfortable with each other’s respective approaches to working.

In both mergers, the approach was always to try and ensure that staff and students felt this was being done with them and not to them. Advice from colleagues who lived through these mergers highlighted the importance of bringing staff at all levels into the discussion, and even sharing the responsibility of communicating about the merger amongst different teams, so that there is a sense of shared ownership of the merger process.

Another key piece of advice was any successful merger relies on the ability to address the similarities and differences of the culture of each organisation; it is vital that in the process, the distinctiveness of the respective institutions is acknowledged, protecting their unique diversity and approach, but that open and honest conversations must take place that ensure that there is enough tolerance and flexibility to adapt and change and see a successful merger.

The School of Pharmacy merger grew from a desire to ensure financial security but also a recognition that there needed to be more opportunities for research and innovation, collaboration and the sharing of resources and ideas, as well as enhancing the student experience, facilities, and services. The merger with UCL offered all these opportunities but also (when compared to other potential options) was less disruptive to current students on courses due to location (there was no need to move) and that there was no duplication or competition around provision as UCL didn’t offer Pharmacy courses.