Merger of a debt burdened General Further Education (GFE) college and a Sixth Form college to create a c£28m organisation. Colleges were complying with Area Based Review recommendations, but in the quest to achieve long term sustainability, many challenges had to be overcome.
Summary
- Proposed merger of a GFE college and a sixth form college
- Colleges were complying with area based review recommendations
- Heavy debt burden in one; both affected by funding cuts and sector reforms
- Efficiency opportunities to be leveraged
Challenges:
- Legacy debt; forward deficits
- Excess space capacity
- Operational inefficiencies
- Management and governance required strengthening
- Merger principle not fully embraced
- Lack of coherent strategic direction
- Substantial level of restructuring support needed to secure viable, sustainable merged entity
How we helped:
- Early and significant stakeholder engagement
- Began to rebuild stakeholder confidence for the future entity
- Facilitated financial discussions with ESFA, TU and Bank
- Supported and guided Management and Shadow Board
- Facilitated inter-college discussions / relationship building
- Input into and constructive challenge of strategic business plan and forecasts
- Engaged with TU and Bank re level and structure of forward support
- Co-ordinated with third party advisors (Estates, Project Managers, Financial DD)
Results:
- Successful TU application, supported by robust business plan
- Retention of Bank support
- Merger completed
- Significant increase in stakeholder confidence
- Enhanced leadership and governance in place
- Clarity over future direction
Benefits at a glance:
- Colleges received clear, timely and practical advice
- Constructive challenge aided delivery of a robust plan
- Support and guidance enabled management and governors to make sound decisions
- Stakeholder management, and expertise of dealing with funders in distressed scenarios
De Novo has been hugely supportive, highly commercial and have made a significant difference to the process. We have benefitted from their know ledge and expertise, and are grateful for the support, advice and guidance provided. De Novo Advisory have been a real pleasure to work with. Thank you again.
Interim Principal
May I take this opportunity on behalf of the Shadow Board to thank you for all the hard work that you have made towards the proposed merger. Your knowledge and expertise has played a major role in setting the foundation for what I know will be a successful outcome for the borough and its learners. You have helped us to get in to the position of being on the cusp of a merger agreement. Thank you.
Chair of Shadow Board