Forget egos and government indecision: mergers and acquisitions are logical steps towards increasing educational sophistication, says David Sherlock.

I’ve come at merger from all ends. As a college principal I fought off an inappropriate merger and ended chairing a subject-based consortium.

As head of Central Saint Martin’s I was part of a federation that seemed to have pulled off the unenviable trick of creating a whole that was less than the sum of the parts.

In 10 years as chief inspector of the Adult Learning Inspectorate I saw more than my share of thriving and busted mergers, and absorbed the sobering lesson in  the University of Warwick’s classic study: most mergers fail to satisfy the hopes of those who promote them.

And I have spent a rewarding day during the Lingfield review of staff professionalism listening to Jackie Fisher and her staff talking about the scope for learning from the good practice found in every new organisation acquired by a £200m turnover outfit such as the Newcastle College Group.

That doesn’t make me an expert but it does mean that my views are seasoned by personal experience.

The motives for combining organisations range from an inability to compete with a more powerful neighbour in breadth of curricula, to inherited financial or academic weakness, to inability to build capital from the diminishing margins available from government funding to keep buildings and plant up-to-date, to the kind of vanity projects sponsored by vainglorious chief executives or funding body managers that Phil Frier, interim principal of K College, mentioned in his FE Week Expert piece of Monday, June 24 [edition 71].

The structures that might save the business are just as various. They include developing vertically integrated services from nursery school through University Technical College to university on a single campus; formal or informal consortia that give the members access to anything from a limited number of shared, efficiently procured, services, to a common contract with Education Funding Agency and the Skills Funding Agency; to retained operational independence within a local plan developed with other providers, a local enterprise partnership, local employers and the local authority, as Richard and Heseltine might recommend; to corporate merger.

The mistake is to wait until market forces propel one organisation so close to collapse that a rescue has to be cobbled together in haste.”

The varied reputation of merger in FE rests on a piece of public-sector doublespeak. The distinction between Type A and Type B ‘mergers’ is not, as Mr Frier suggests, meaningless bureaucracy associated with the Treasury’s evaluation model.

It is the difference between acquisition of one organisation by another, resulting in total absorption, and the willing combination of equals to form something new and better.

If we talked openly about mergers and acquisitions in FE, instead of just mergers, we would gain a clearer understanding of both the process and its social dynamics.

Most of the ‘mergers’ in FE are, in fact, the acquisition of an organisation teetering on the brink of failure by another that is healthier, usually prompted by a government agency anxious to avoid embarrassment.

There are good reasons for sensible merger. The mistake is to wait until market forces propel one organisation so close to collapse that a rescue has to be cobbled together in haste.

Make no mistake, the ‘terms of trade’ change when you create fewer, bigger, providers. If you admire the example of Australian TAFE (technical and further education), rationalise English FE so that each college serves a similar proportion of the national population as does a TAFE institute and you would end up with around 120 to 150 FE colleges, each with sufficient turnover to sustain its own needs for capital formation.

In the past 40 years, mergers and acquisitions have taken universities from an average of 5,000 students to more than 20,000. They are controversial in FE only because of their entanglement with individual ego and governmental indecision.

David Sherlock, director of Beyond Standards Ltd

Highly-skilled jobs needn’t be the reserve of graduates, says Michael Davis. For him, a change in apprenticeships funding might allow them to solve the country’s youth unemployment problem.

For the past 18 months, the UK Commission for Employment and Skills (UKCES) has been working on proposals to change the way public and private investment in skills align to produce better jobs and growth outcomes.

It’s a big challenge, and there’s no magic solution, but one way of helping is to change the way public funding flows around the apprenticeship system.

By routing the government’s contribution to apprenticeships directly through employers we can make them the system’s true customers; carrying the responsibility and reward for ensuring they invest wisely in the skills needed for business success.

The background is this — youth unemployment is serious, but the challenging economic circumstances of the last six years are not the sole cause. The labour market has seen a long-term decline in the number of entry level jobs, and, critically, there are too few good jobs for young people.

It’s not that the jobs aren’t there. Employment in highly-skilled, technical, managerial and professional roles has grown by more than 900,000 over the course of the recession and recovery and this growth is set to continue.

In the decade from 2010, growth in these jobs will stand at 1.9m — more than 13 times greater than the 140,000 growth forecast for the sales and elementary occupations that young people rely on for their first jobs.

But the employers who specialise in highly-skill roles are the least likely to recruit young people and, where they do, they tend to rely on graduates.

Employers should be able to claim tax relief via Pay As You Earn (PAYE) when they commit to employing an apprentice.”

Creating more non-graduate routes into technical, professional and managerial jobs would offer opportunity and feed employers young talent. Apprenticeships are a proven way of delivering highly productive, well trained and loyal staff, access to a successful career for young people and strong benefits for the exchequer and the economy as a whole.

Yet only 15 per cent of UK employers offer them.

The commission’s perspective is that we must return apprenticeships to their founding principle — a contract between the apprentice and the employer.

They should be funded accordingly — paid for, and valued by, the employer.

Our simple proposal is that employers should be able to claim tax relief via Pay As You Earn (PAYE) when they commit to employing an apprentice, provided the apprenticeship meets quality standards, including decent pay and conditions, high quality training and the opportunity to progress.

This is a fundamental difference that positions employers as purchasers of services from colleges and training providers, while also placing the responsibility for the success of that investment with them.

Our proposal is completely consistent with Doug Richard’s recommendations in his review of apprenticeships, which the commission supported.

Led by Scott Johnson, a successful small business entrepreneur, and one of our commissioners, UKCES has had constructive discussions with employers, employer groups, college and trade union leaders on thinking through how such a model could work.

Clearly there is more detail to be considered as changes to the tax system are not made lightly.

But it is encouraging that the Chancellor’s, in the recent Spending Review, announced there would be a consultation on options for major reform of apprenticeship funding, including use of HMRC’s PAYE system.

The current system has delivered results — apprenticeships are now available in more sectors of the economy and to more people than ever before.

However, they are yet to be embedded as the new norm.

To achieve this, we need to continue to raise standards and engage more employers, especially small businesses, in providing high quality apprenticeships.

Michael Davis, chief executive of the UK Commission for Employment and Skills

Macclesfield College soared from an Ofsted grade four to a grade two in just over a year. Principal Simon Andrews explains how.

In February 2012, just weeks before I took over as principal, Macclesfield College failed an Ofsted inspection.  The college recorded an overall grade four ‘inadequate’ for overall effectiveness and leadership and management.  The college had for whatever reason lost its way.

Only 15 months later staff and students are celebrating being awarded a grade two ‘good’ from Ofsted.  This is a transformational performance from the college matched by very few under the new rigorous 2012 Common Inspection Framework.

The seismic shift in performance has been fundamental.  Macclesfield College’s educational performance in May 2013 bears no resemblance to the Macclesfield College of February 2012.  From being very pedestrian and lack lustre the college now has some of the very best teaching and learning the inspectorate has seen.  The curriculum has changed and is better suited to the learners’ aspirations, teaching and learning has improved dramatically, and student satisfaction ratings are in the upper quartile nationally.

So, how has this transformation in performance taken place?  I think it is about having ambition and aspirations for the future. It would have been easy to have simply targeted a grade three — ‘requires improvement’ — as our main objective.  However we decided that we would challenge staff to have the ambition and aspirations for our learners to be one of the best performing UK colleges by 2015 and this was formalised to become the College vision.  We also changed the college mission to put learners at the very heart of all that we do, ‘Macclesfield College: putting learners first’.  These became the drivers that influenced all the developments and initiatives that have rapidly improved performance and changed attitudes and culture.  Indeed the Ofsted Report says: “The Principal is unequivocal in his vision for the college to be outstanding …the Principal has changed the culture of the college successfully to one of high aspiration and ambition.”

Following restructure, investment in infrastructure, and the appointment of two high quality vice principals, managers made teaching and learning and the learner the central focus of activity.  College timetabling was changed to better facilitate the learning and more space was made available for them to use between lessons.  Teaching and Learning Champions were appointed to support the development of teachers.  The college also benefited from some high quality support from the Learning and Skills Improvement Service (LSIS) and Promoting Excellence which was bespoke for the college’s needs.  New specialist vocational areas have been developed in motor vehicle and motor cycle, construction trades such as carpentry and joinery, and brick laying.  Plans are advancing to develop a construction centre to feature plumbing, gas fitting, plastering, painting and decorating along with green technologies.  Further developments in science, technology, engineering and mathematics (STEM) have also taken place, notably in new foundation degrees in science and engineering.

New performance management systems have been introduced based on high quality accurate data which allowed senior managers to monitor all aspects of performance.  Curriculum managers understand that they are responsible and accountable for their performance.  This responsibility and accountability permeate through the teaching teams so that all staff understand their role and responsibilities.

We have focused on the development of teaching, learning, and assessment.  This has dramatically improved classroom performance and the learner experience.  The Ofsted Report says: “The large majority of lessons are good or better.  Teachers plan their lessons well, successfully engage and motivate their students through dynamic, interesting, and well-paced teaching… students benefit from teachers’ high but realistic expectations.”

It is the people who make the difference.  It is important to have highly motivated staff in the right job and it is equally important to understand that the employer has a right to expect good performance.  We now have high quality performing teams across the college — that is the key difference.  The College will now continue to improve and develop.

Simon Andrews, principal at Macclesfield College