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Annex**: Explanatory Memorandum EXPLANATORY MEMORANDUM TO THE YSTRAD MYNACH COLLEGE FURTHER EDUCATION CORPORATION (DISSOLUTION) ORDER 2013 This Explanatory Memorandum has been prepared by The Department for Education and Skills and is laid before the National Assembly for Wales in conjunction with the above subordinate legislation and in accordance with Standing Order 27.1. MINISTER’S DECLARATION In my view, this Explanatory Memorandum gives a fair and reasonable view of the expected impact of the Ystrad Mynach College Further Education Corporation (Dissolution) Order 2013. I am satisfied that the benefits outweigh any costs. Huw Lewis Minister for Education and Skills 9 July 2013 1. DESCRIPTION This Order provides for the dissolution of the Ystrad Mynach College Further Education Corporation and the transfer of its property, rights and liabilities to Coleg Morgannwg Further Education Corporation. 2. MATTERS OF SPECIAL INTEREST TO THE CONSTITUTIONAL AND LEGISLATIVE AFFAIRS COMMITTEE There is no specific information which the Minister wishes to bring to the attention of the Committee. 3. LEGISLATIVE BACKGROUND This Order is made under section 27C of the Further and Higher Education Act 1992. This Order is subject to annulment (negative resolution procedure). 4. PURPOSE AND INTENDED EFFECT OF THE LEGISLATION The dissolution of the Ystrad Mynach College Further Education Corporation and the transfer of its property, rights and liabilities to Coleg Morgannwg Further Education Corporation is intended to strengthen and secure the provision of facilities for post-16 education and training in the South East Wales Valleys catchment area. It will effect a unique merger of two high quality Colleges, which are financially viable and have strong corporate services. The two Colleges between them offer a number of curriculum areas which will benefit from the merger, namely in. Business and management training; Service industry training; adult community learning, including learning the Welsh language; HE in FE through partnerships with the three South East Wales Universities and Universities Heads Of The Valley Institute (UHOVI); There is an opportunity to develop these further. Merger with Coleg Morgannwg which is also a Category A ‘financially sound’ institution is considered a prudent way forward. Merger of the two colleges will create an enlarged college with a combined turnover of circa £45m, circa 20,000 learners, circa 1,000 staff with a network of 5 main campuses covering some 58,000 sq metres of floor space providing an enhanced operational platform. It would be able to operate across the core catchment within the South East Wales Valleys and beyond in selected areas, most notably in Essential and Vocational Skills training. With combined revenue of around £45m the proposed merged College will be a very significant organisation, and one of the largest in Wales. Operating across mainly urban and sub urban areas of South East Wales, the College will have the capacity to have a significant impact on learners and the economy of the region. This Order implements a proposal received from both Corporations to merge functions. Ystrad Mynach College has been consulted and Coleg Morgannwg is content with the transfer. The dissolution and transfer will come into effect on August 1 2013. Both colleges are fully prepared for the merger. As of August 1 2013, immediately following the dissolution and transfer, Coleg Morgannwg will change its name to ‘Coleg y Cymoedd’ (College of the Valleys) CONSULTATION Ystrad Mynach College Further Education Corporation has been consulted in accordance with section 27C(6) of the Further and Higher Education Act 1992 and the transfer of property, rights and liabilities is made with the consent of Coleg Morgannwg Further Education Corporation as required by section 27C(2) of the Further and Higher Education Act 1992. The colleges have consulted widely with both internal and external stakeholders and the proposals to merge have been broadly welcomed. DfES officials have considered the consultation responses and actions taken by the colleges to resolve any points raised. The merger business plan includes a summary of responses with full versions published on the college website available at: www.morgannwg.ac.uk/index.php/en/ REGULATORY IMPACT ASSESSMENT This Order has no impact on the statutory duties (sections 77 – 79 Government of Wales Act 2006) and does not impose any additional burdens upon the statutory partners (sections 73 – 75 GOWA 2006). Options Various options were considered and rejected prior to the decision made by the parties to dissolve the Corporation of Ystrad Mynach College and merge operations as set out in a Statement of Intent dated June 2012. The following options were considered as part of the process and an assessment made of the advantages and disadvantages that would occur for both the learners and the partner Colleges against each of the options. Option 1 - Status quo / continued informal collaboration (Retention of existing corporations and building on goodwill and current collaboration) Option 2 - A South East Wales College (Dissolution of a number of South East Wales colleges and transfer of all their assets and liabilities under a Group umbrella organisation). Option 3 – A single merged College (A type ‘B ‘ merger: the dissolution of one existing corporation and the transfer of all its assets and liabilities into another existing corporation) Option 4 – A federal structure between two SE Wales Colleges(A single Principal and Governing body for the two existing colleges). An analysis of the arguments for and against the options was undertaken and presented as follows: 1.Status Quo – This option: building on good Does not conform to Welsh Government will and current Transformation policy and provides little or no progress collaboration. toward a South East Wales curriculum; Is vulnerable in the face of one College’s changing priorities; Is unsustainable, offering few opportunities for securing better value for money and could therefore be regarded as unaffordable; Misses opportunities for development of centres of excellence /improved course provision. 2. A SE Wales This option: College Offers one Board of Governors, one CEO and one senior management team; Could be seen as a remote distant College not connected to local issues; would incur significant and continuing change management costs; Would risk brand confusion and loss of focus. 3. A single This option: merged college Maximises opportunities for quality curriculum options, delivery options/modes, accessibility, new ventures and learner services; Is likely to deliver most efficiencies through streamlined provision of services; Has potential for efficiencies through joint management of estates and possible rationalisation of assets; Offers potential for staff development / improved CPD opportunities given wider exposure to courses / levels of study. 4. Federal This option: Structure Could mean potential disruption to course provision during establishing period as planning / possible rationalisation takes place; Is likely to cause confusion/tension over lines of accountability and strategic direction; Could present potential difficulties in terms of agreeing mechanism for representation on Board of federation; Potential loss of community links as federation expands. Favouring Option 3, and following discussions with other potential partners, Ystrad Mynach College concluded that merger with Coleg Morgannwg would provide the financial robustness, expertise and a strong track record of efficiency that would be most likely to guarantee that existing provision is safeguarded and extended. The feasibility process highlighted a number of areas that would benefit from greater partnership between the two Colleges including: improved management and planning of provision, quality, finance and estates. Both colleges are closely matched in terms of expertise with operating multiple sites and a merger would not necessitate further reduction in sites or staff. Merger with Ystrad Mynach College is considered financially viable by Coleg Morgannwg and is to be regarded as ‘a merger of equals’, creating Coleg Y Cymoedd (College of the Valleys). Both institutions are deemed of sufficient scale to secure potential benefits by helping to strengthen the learning provision offer - particularly in meeting the 16-19 bilingual offering as further school collaborations are considered across the region, and allowing links to be strengthened with 14-19 and work based provision. Reciprocal Financial and Legal due diligence exercises have been undertaken by both institutions which have identified where immediate efficiencies and savings can be made. As such the information is considered commercially sensitive. Benefits Both colleges have consistently been rated among the top FE colleges in Wales with regard to quality and financial viability and these systems will be applied to the merged institution. Comparison of the due diligence exercises carried out on both institutions has identified various areas where further efficiencies can be achieved. The curricula of the two colleges are complementary in nature, offering all members of the community an expanding choice of educational opportunities. Learners will be able to progress to a much wider range of programmes within the merged College, aided by common procedures, facilities and standards of service. The integration of the staff of the two colleges will bring together a greater variety of skills and experience
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