West Midlands college merger bites the dust for lack of government cash

West Midlands college merger bites the dust for lack of government cash

Another major merger between two colleges in the west Midlands has been called off, amid accusations that the government was unwilling to provide the necessary funding.

In a joint statement, North Shropshire College and Reaseheath College in neighbouring Cheshire, said “unfortunately, long-term funding is not available” for a merger, even though they have “successfully worked closely together in federation” for more than a year.

Both colleges claimed that they had been “keen to build on” the benefits of federation, but after 10 months of talks with the Education and Skills Funding Agency and the Treasury’s transaction unit, the process has fallen through.

“Despite best efforts and long discussions, the ESFA and the TU have been unable to fund a merger sufficiently to enable the college management teams and governors to recommend with confidence that the financial support offered will ensure a successful merger,” the statement said.

This collapse makes for the 16th failed merger from the area review process – which finished recommending a total of 52. The original merger was recommended in the wave two report, though the two colleges were part of separate reviews: Cheshire and Warrington for Reaseheath – an agricultural and land-management college with around 7,500 learners – and the Marches and Worcestershire for North Shropshire, which has five campuses in the county.

In their statement, the colleges lamented the “huge amount of work and expense” that had been put into the merger over the past 18 months, and admitted that “both college management teams and governors are extremely disappointed with this outcome”.

They added that North Shropshire College “will now work with the ESFA and the FE commissioner to find an alternative solution”.

“The conclusion to this process is disappointing to both colleges and the government, but we have explored all possible long-term funding support and unfortunately there is not a viable solution,” they said.

Earlier this month, FE Week reported that the government has so far spent just under £1.04 million on supporting mergers that went on to collapse, from a total of around £5.6 million awarded so far. 

The government had set aside transition grants of £50,000 or £100,000 for consultants to help plan mergers, as well as loan funding to help towards the cost of restructuring. In fact, a total of £726 million was set aside to implement the recommendations of the area reviews, but FE Week has been unable to ascertain where the cash has been allocated.

Earlier this month, Association of Colleges boss David Hughes warned that colleges were still “funding the majority of upfront costs of these structural changes themselves”.

Peter McCann, North Shropshire’s interim principal, added: “After so much work together it is of course disappointing that the merger has broken down at the eleventh hour but North Shropshire College has already begun discussing alternative strategies with our community and government stakeholders and we will ensure that the outcome serves the needs of our students, employers and community as effectively as possible.”

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