To merge or not to merge – that is the question

I’m not going to quote Shakespeare at length, but many college leaders will feel they are suffering the slings and arrows of outrageous fortune today.

The Institute for Fiscal Studies reported late last year that 37 per cent of colleges were operating in financial deficit in 2022-23, and 44 per cent of these colleges had been in deficit for at least three consecutive years.

My sense is that after five years or so of having slowed down – partly as a consequence of Covid – we will see an increase in the number of colleges that fall into difficulty. This could trigger more central government intervention, and potentially more mergers.

I have written before about how colleges could get on the front foot by conducting their own “College led SPA” (structure and prospects appraisal) but I haven’t seen much appetite in the sector for undertaking them recently.

Whereas 10 years ago there may have been a government policy aim to have fewer, larger colleges in England, I am unable to detect any national blueprint for FE today.

There may be a generalised feeling in government that a proliferation of providers is not ideal. But there is probably also an understanding that structural consolidation has natural limits.

We’ll see if a post-16 strategy changes that, but for now the improvement and intervention functions in government seem happy to allow providers to exist as currently configured, provided they are healthy in quality and financial terms.

So – for now – the most likely trigger for a merger remains organisational failure, government intervention, a diagnostic assessment that follows and a commissioner-led SPA that recommends a merger.

The key question is whether mergers actually work. Do they improve student outcomes and do local communities actually benefit?

There’s not much hard evidence on that front. Department for Education research in 2019 found no strong statistical evidence of college mergers leading to an improvement or deterioration of college performance.

Ofsted statistical analysis in 2023 found that since mid 2016, of those merged colleges that received their first full inspection, 81 per cent were ‘good’ or ‘outstanding’. This was 16 per cent higher than the proportion judged that way prior to merging. However, those colleges that didn’t merge also improved, by similar percentage points.

Context is everything when it comes to mergers. The two London mergers I led as chair were necessary to secure the colleges’ futures, but they were very different cases.

The Kensington and Chelsea College (KCC) merger took place in the wake of the Grenfell tragedy. The college merged with a wonderful mainly adult education college, Morley College. And Morley definitively improved outcomes at KCC.

When I was chair in 2018, KCC extraordinarily received its fifth ‘requires improvement’ judgement. Morley College was judged ‘good’ in 2023, arresting years of poor outcomes at KCC.

The North Kensington Centre for Skills (as KCC is now named) is today a vibrant and thriving part of the local community – a fantastic transformation in just five years since the merger, and nearly eight since Grenfell.

Richmond upon Thames College (RuTC) was officially ‘good’ at the point of merger in early 2023. But years of circling around a merger had taken its toll on achievement and student experience.

RuTC merged with Harrow College and Uxbridge College, and HRUC (the merged group) has also just been judged ‘good’. HRUC’s leadership no doubt hoped to secure ‘outstanding,’ but the Ofsted report details progress made.

A key question was how the merger would work given the geographical distance between Richmond and Harrow and Uxbridge. Ofsted offers nothing to suggest that this has impacted negatively on the student experience at any campus.

However, it is a key question for future mergers. I would like to see more detailed surveys of parent and student opinions feeding into the merger due diligence process, to ensure there is a good cultural and student-experience ‘fit’ when a merger takes place across significant geographical distances.

It’s difficult to say whether mergers work on a policy level. But there will very likely be more of them.

I remain of the view that colleges should get on the front foot and run their own structure and prospects appraisals. It could be the most effective way for a college leadership to take arms against its sea of troubles, avoiding the slings and arrows coming down the line!