Further education Minister Matthew Hancock has written to all governors and principals with a warning on mergers just weeks after his staff launched a probe into the plans of two Midland colleges to join forces.

He “would expect accountability” to local communities to be the main reason behind any major changes,  and said: “The starting point, therefore, should be an assessment of need and how different delivery models might fulfil it.”

His letter, dated February 13, goes on to outline the processes that should be followed in proposed mergers and has also gone to the Skills Funding Agency’s chief executive, Kim Thorneywork, and Association of Colleges chief executive Martin Doel.

It follows an investigation by the Department for Business, Innovation and Skills (BIS) into a proposed merger between Birmingham Metropolitan College and Stourbridge College.

A six-week formal consultation on the proposals launched on January 18, but BIS is looking into it over concerns the colleges may not have followed correct procedure.

A BIS spokesperson said the investigation was ongoing.

And, without referring to any specific colleges, Mr Hancock covers the issue of merger procedure in his letter, mentioning first the need to carry out a college structure and prospects appraisal.

“You need to consult widely and transparently on … proposals, taking explicit account of the views of … communities … and of other interested parties including the LEP [Local Enterprise Partnership], Local Authority and the funding agencies,” he added.

“This consultation should be done at an early stage and should not be confused with the formal consultation stage that is required should the final proposal involve dissolution of the college.

“Finally, any actions you take to secure new partners or change your delivery model should be through open and competitive processes which will allow the best possible solution to be identified to meet local needs.

“This is especially important should one of the options involve dissolution of the college.

“In these cases, transparency and openness on the options that have been considered, and a clear rationale for the final proposal are both critical, and need to be in place well before the final, formal consultation.”

The Midland colleges’ merger proposals would see the 12,500-student Stourbridge College dissolve on May 31 with its property, rights and liabilities then transferring to Birmingham Metropolitan, which had more than 26,000 learners two years ago.

A statement on the Birmingham college’s website said they were planning to merge “to become one of the largest and most significant further education providers in the country.”

The consultation report is due out by March 20 — the day before governors were expected to rule on the proposals.

The consultation document says a draft order for the dissolution of Stourbridge College would come out the same day as the governors’ decision, with merger taking place on June 1.

A joint statement from the colleges said: “We reject any suggestion due process has not been followed in taking forward the merger process. The processes required by law have been, and are being, strictly observed.

“Views expressed in the consultation will be fully considered in due course and those views and the corporations’ response published.”

The Birmingham college achieved a good grading from Ofsted in March 2011 while Stourbridge got the same grade last month.

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