Northumberland College pulls out of merger deal

AMERGER between two of the region’s biggest colleges has collapsed just weeks before it was due to go ahead.

Protest at Northumberland College merger plans
Protest at Northumberland College merger plans

A MERGER between two of the region’s biggest colleges has collapsed just weeks before it was due to go ahead.

The plans to merge Northumberland College with NCG, the parent company of Newcastle College, collapsed after governors at Northumberland decided to pull out of the deal.

The announcement came just days after Newcastle College said would spend £25m on facilities in Northumberland, including a new vocational campus to be built in Cramlington and improvements to the college’s Ashington headquarters.

Yesterday a statement from Northumberland College said that the board had pulled out because it felt the merger proposal agreed in July had “materially changed” and “no longer represented the best solution for students, staff, stakeholders and the local community”.

The board will now consider other options to secure the future of Northumberland College, although no details of these options have yet been revealed.

Chris Todd, acting principal at Northumberland College, said: “Students, staff and stakeholders did not want this merger to happen. The corporation have listened to these concerns and have made the right choice in the interests of Northumberland.

“Northumberland College has a strong business plan going forward and we have demonstrated substantial improvement over the last 12 months.

“The college is no longer in a desperate situation. The college is stronger than ever, both financially, but also in terms of the quality of its provision.”

In an email to staff yesterday, Mr Todd said he “wanted you all to be aware of the good news as soon as possible”.

He said: “On a personal note, I have really stuck my neck out to secure this decision and I now need all of you to support me to take the college forward. I know this college is capable of great things and with your support we can achieve it.”

The merger was first proposed in January at a time when Northumberland was suffering funding problems, strike action by staff in protest at job losses, management restructuring and a major review of its business model.

But the moves proved controversial from the start, with hundreds of people, including many members of staff, opposing the move. Earlier this month The Journal revealed concerns at Northumberland over the way the merger was developing, including plans to sell off the college’s agricultural training centre at Kirkley Hall, near Ponteland.

After that article, NCG released a letter from both colleges’ chair of governors which said that their differences had been worked out and urging the Government to press ahead with the moves.

NCG said yesterday that it had progressively increased its offer since the original proposal as problems with the existing Northumberland College estate and the implications of reductions in college funding over the next three years became clear.

NCG chief executive Dame Jackie Fisher said the group was disappointed Northumberland College had rejected its merger proposal and hinted that it could still make some moves into Northumberland – raising the prospect of the two colleges competing for students.

She said: “We remain committed to supporting learners in the North East and we are considering an alternative strategy to give learners in the county the opportunity to gain new skills in an up-to-date, clean, pleasant and safe environment.”

Last night Wansbeck MP Ian Lavery, who voiced serious concerns over the plans, told The Journal the decision to stop the merger was “the right one”.

He said: “I asked NCG whether they would ensure the college at Ashington and facilities would be maintained, and that the right courses would be introduced for young people of our area and I didn’t receive any cast iron guarantees.”

A spokesman for NCG said: “NCG was planning to invest £77m over the next four years into Learning in the North East, which included the Northumberland College merger investment. As the Northumberland governors rejected the merger proposal, we are considering an alternative strategy and we remain committed to supporting learners in the North East.”

The crucial questions

The Journal put the following questions to Chris Todd, acting principal at Northumberland College.

1. The merger was first suggested because of problems with management, finance and the buildings at Northumberland College? How does the college plan to address these problems now that the merger is not happening?

CT: A merger with NCG is not the only solution to the issues faced by Northumberland College. The college intends to explore other options, with a view to creating a solution that works for students, staff and stakeholders. The corporation did not feel that a merger with NCG, particularly in light of recent changes to the merger proposal and the lack of political support, would deliver this. The college’s performance is improving and the corporation are of the view that it is in the best interests of all concerned for the college to move forward in a new direction.

2. As recently as the end of October, the chair of governors at Northumberland signed a letter saying: “We have no hesitation in asking ask you to approve the merger between Northumberland College and NCG as a matter of urgency to enable both governing bodies to move forward together to address the important and pressing challenges facing Northumberland College.” What has changed in the time since then and what will now be done to address those challenges?

CT: The Minister of State sent the college a letter which influenced the corporation’s decision, while the corporation also felt that the merger proposal had materially changed and that plans currently on the table did not deliver what was best for the local community.

3. Information seen by The Journal suggests that the college faces a multi-million pound bill to get Kirkley Hall and the Ashington site up to standard, as well as a pension liability of over £5m and multi-million loans to Northumberland County Council. How does the college plan to meet these costs?

CT: A pension liability is not a real liability. It is subject to revaluation on a regular basis and will never come to fruition. All colleges, local authorities and public sector bodies have pension liabilities within their accounts. NCG have a significant pension liability of their own recorded in their balance sheet.

4. In the statement issued following the collapse of the merger, you say that “Northumberland College has a strong business plan going forward and we have demonstrated substantial improvement over the last 12 months”. How has the college demonstrated improvement and in what areas? What will the business plan entail?

CT: Financial improvement (improved operating position and cash flow). Improved internal and external audit opinions. Improved governance. Improved and strengthened leadership and management. Improved success rates and outcomes for learners. The business plan provides an ambitious strategy for growth, but also further improvements in teaching and learning, the quality of provision and financial performance.

 

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