CIPFA SCOTTISH STUDENTS’ SOCIETY “The Challenge of Change”

Presentation Structure  Background - Scottish FE Colleges  Merger – Why?  Merger – How?  Merger – Any lessons?  Merger – Positive outcomes?

Background Scottish FE Colleges  42 Colleges  Governance – Board of Management  Performance Management  Funding contract based on student numbers  Financial Stability  Quality assurance  Local Bargaining

Anniesland College North Glasgow College Stow College Central College GCBP GCFT GCNS Cardonald College John Wheatley College Langside Background Glasgow FE Colleges

Background Glasgow City Centre

Background Merger  Colleges incorporated April 1993  1997 GCBP & GCFT merger proposal rejected  Sept 2001 GCBP, GCFT and Central College  March 2002 Feasibility Study & Due Diligence  Sept 2002 all 3 Board agree to move forward  February 2003 Consultation issued  May 2003 Central College withdrew  Nov 2003 GCBP & GCFT submit merger proposal  Approved by Minister June 2004  Glasgow Met formed 1 st August 2004  Transfer 1 st February 2005

Merger – Why?

 Political steer  Financial Stability  Operating Surplus  Historic Surplus  Income & Expenditure Reserves  Net Current Assets  Capital Investment

TurnoverI&E ReservesStaff FTE Merger – Why?

Merger – Why? Operating Surplus

Merger – Why? Historic Surplus

Merger – Why? Income & Exp Reserve

Merger – Why? Net Current Assets

Merger – Why? Capital Expenditure

Merger – How? Governance  Phoenix Model  Completely new legal entity created by statute  GCBP and GCFT transferred to Glasgow Met  Difficult to enter into contracts as new entity (Glasgow Met) not established until 1 st August 2004  Could not appoint Board or Principal until on or after 1 st August 2004  High Risk Model  Effective leadership difficult  Weak management  Decisions often based on compromise

Merger – How? Governance  Board of Management  Appointed by Deputy First Minister  Established 1 st August 2004  50:50 GCBP and GCFT  12 members  Principal, industry & other stakeholders (7), staff reps (2), Scottish Enterprise (1), student rep (1)

Merger – How? Governance

Merger – How? Leadership & Management  Confident leadership  Strong management control  No redundancies (if affordable)  Effective communications  Trade union involvement  Matching-in

Merger – How? Matching-In  Organisation Structure  Key planning activity  Should not be designed by committee  Desk research  Meticulous care  Span of control (set at 6)  Number of levels (scalar max set at 6)  Consultation

Merger – How? Organisation Structure

Merger – How? Matching-In  Matching in Procedures Developed  Minimal Impact Groups  All lecturers  Cleaners  Catering Assistants  Workshop/General Assistants  Some Technicians  Matching-in Committees

Merger – How? Matching-In Committee

Merger - Lessons Matching-In  Matching-in Committees  4 formal grievances  Competitive Interviews  Out of 600 less than 5% interviews  Strong emphasis on competencies and evidence-based selection.  No disputes with trade unions  No Employment Tribunals

People Lessons TUPE  EU directive on transfer of undertakings  Employment law minefield  Single biggest barrier to harmonising terms & conditions of employment

People Lessons TUPE Terms & Conditions Terms & Conditions Lecturers (GCBP) Management Support (GCFT) Lecturers (GCFT) Support (GCBP)

People Lessons TUPE & Equal Pay  Fertile ground for equal pay challenge  Current defence – differences arise from transfer of undertaking  Cannot take risk of forcing through new contracts for new appointments  Cannot talk about “harmonisation”

People Lessons TUPE & Equal Pay  Age discrimination legislation (October 2006) has provided a spring board for change

People Lessons Other  Staff morale – high risk  Senior management – high risk  Decision making overload  Complex & time-consuming decisions  Operational service delivery stagnates  Creativity stifled

Computerised Management Systems  Accounting System – Symmetry Oracle  Payroll/personnel (Wealdon)  Student Records (Capita)  Estates & Facilities (Concept)  Bursaries (Tequious)

Finance & Accounting  Financial Management Systems  Management Accounting  Financial Reporting

Finance & Accounting Implementation Audit Scotland No additional staff 2004/05 1.GCBP 2.GCFT 3.Glasgow Met 2004/05 1.GCBP 2.GCFT 3.Glasgow Met

Financial Management Lessons  Importance of organisation structure  Cost centre relationships need to be built-up at an early stage  Allows for budgets to be built around new organisation structure

Finance & Accounting Lessons Hand Pick Your Managers Hand Pick Your Managers

Financial Reporting Lessons  FRS6 – Mergers & Acquisitions  If merger part way through financial year, then consider keeping separate systems for full-year – because  It allows continuation of budgetary control and accountability

Merger - Outcomes Financial Performance

Merger Outcomes Financial Performance

Merger Outcomes Student Recruitment

Merger Outcomes wSUMs Performance

Merger Outcomes Absence Management Saving = £350,000

Merger Outcomes  Organisation “refreshed”  Future risks – better spread  College more influential  Economies of scale  Improved space utilisation  Improved market brand & identity

CIPFA SCOTTISH STUDENTS’ SOCIETY “The Challenge of Change”