1. CIPFA SCOTTISH STUDENTS’ SOCIETY “The Challenge of Change”

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

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

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

5. Background Glasgow City Centre

6. 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

7. Merger – Why?

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

9. TurnoverI&E ReservesStaff FTE Merger – Why?

10. Merger – Why? Operating Surplus

11. Merger – Why? Historic Surplus

12. Merger – Why? Income & Exp Reserve

13. Merger – Why? Net Current Assets

14. Merger – Why? Capital Expenditure

15. 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

16. 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)

17. Merger – How? Governance

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

19. 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

20. Merger – How? Organisation Structure

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

22. Merger – How? Matching-In Committee

23. 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

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

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

26. 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”

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

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

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

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

31. 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

32. 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

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

34. 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

35. Merger - Outcomes Financial Performance

36. Merger Outcomes Financial Performance

38. Merger Outcomes Student Recruitment

39. Merger Outcomes wSUMs Performance

40. Merger Outcomes Absence Management Saving = £350,000

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

42. CIPFA SCOTTISH STUDENTS’ SOCIETY “The Challenge of Change”