Plans for a merger that would create the largest college group in the country have been dropped.
Activate Learning and Lincoln College Group started exploring a merger last year when it was announced the latter’s chief executive Gary Headland would take the reins at Activate after its chief executive Sally Dicketts retired.
But Activate announced today that the merger will not go ahead. In a statement the group said this decision was made following due diligence being carried out.
However, Dicketts later told FE Week that “nothing untoward” was found with the due diligence, and instead the decision was strategic.
“The biggest reason for Activate is we have virtually doubled in size with Bracknell and Wokingham College and then taking on the Surrey group of colleges which happened just before lockdown.
“Those colleges were also slightly difficult financially, because they had very large deficits.”
Dicketts explained that when Headland was appointed he suggest a merger could be looked at- something governors were open to considering.
“But obviously it has to fit in with the strategic plan we have. We aren’t anti-merger, but it has to fit in with where we are at the moment,” she said.
“It also has to be financially right and I think what we felt with where we are at the moment, given those [previous] mergers, our group services are probably at their maximum capacity.
“Therefore, if we now merged we would probably have to take on more pupils and therefore the financial savings that we have made in the past wouldn’t be there and the board felt there was still quite a lot to do within Surrey to really bring them on board.”
Dicketts explained that the technical challenges associated with a merger were also a factor.
“Something like 70 per cent of commercial and public sector mergers never happen. Normally because you have got to change all your systems,” she said.
“A lot of our systems are different… once you start getting into all of that in a merger, then you start getting into the cost of implementing it.
“That is when you think, if you have just taken over two colleges that are net losing six and a half million, do we have a lot of cash left over to put into changing all of these systems, when frankly we’ve just changed them.”
Both Lincoln College Group and Activate Learning are made up of multiple colleges and have international and commercial operations.
LCG has three colleges located in Lincoln, Gainsborough and Newark and Activate’s seven campuses serve Berkshire, Oxfordshire and Surrey.