EXPLANATORY MEMORANDUM TO THE YALE SIXTH FORM COLLEGE AND DEESIDE COLLEGE FURTHER EDUCATION (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 Yale Sixth Form College Further Education Corporation and Deeside College Further Education Corporation (Dissolution) Order 2013. Huw Lewis Minister for Education and Skills 3 July 2013 1. DESCRIPTION This Order provides for the dissolution of Yale Sixth Form College Further Education Corporation and Deeside College Further Education Corporation and the transfer of property, rights and liabilities to Coleg Cambria Further Education Corporation, with effect from 1 August 2013. 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. The powers in section 27C are powers of the Welsh Ministers. Section 27C was substituted for section 27 as originally enacted, by the Education Act 2011, section 49, Schedule 12, paragraphs 1 and 7. This Order is subject to annulment (negative resolution procedure). 4. PURPOSE AND INTENDED EFFECT OF THE LEGISLATION The dissolution of Yale Sixth Form College Further Education Corporation and Deeside College Further Education Corporation and the transfer of property, rights and liabilities to Coleg Cambria Further Education Corporation is intended to strengthen and secure the provision of facilities for post-16 education and training in the North East Wales 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 have a number of strong curriculum areas including Engineering, Construction, Hospitality and Catering, and Land-based Studies, which will develop a significant portfolio for Coleg Cambria. Coleg Cambria will operate from six campuses and provide services to communities and employers in North East Wales (Flintshire, Wrexham and Denbighshire). With a combined turnover of more than £60m it will also become one of the largest FE colleges in Wales - providing learning to around 27,000 students and employing more than 1,800 staff. This Order implements a proposal received from both Corporations to merge the institutions. Both Corporations have been consulted and Coleg Cambria has consented to the transfer to it of the property, rights and liabilities of Yale Sixth Form College Further Education Corporation and Deeside College. The dissolution and transfer will come into effect on 1 August 2013. Both Corporations are fully prepared and are in agreement for the merger. 5. CONSULTATION Yale Sixth Form College Further Education Corporation and Deeside College Further Education Corporation have 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 Cambria 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 throughout the process and the proposals to merge have been welcomed. Responses received indicate overwhelming support for the proposed merger. A small number of concerns were registered and these have been fully addressed. 6. 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 Four options were considered prior to the decision made by the Governing Bodies to approve the dissolution of Yale Sixth Form College Further Education Corporation and Deeside College and merge operations into a newly established College: 1. Option 1: Status Quo (Retention of existing corporations and building on goodwill and current collaboration); 2. Option 2: Minimum Change (Retention of existing corporations but with shared sovereignty over areas of overlapping provision) 3. Option 3: ‘Type B’ Merger (A type ‘B’ merger: the dissolution of one existing corporation and the transfer of all assets and liabilities into another existing corporation); and 4. Option 4: ‘Type A’ Merger (A ‘type A’ merger: the dissolution of both existing corporations, alongside the creation of a new entity, with all their assets and liabilities being transferred to the new corporation). An analysis of arguments for and against the options was undertaken and presented as follows: 1. Status quo – This option: building on goodwill . does not conform to Welsh Government Transformation policy and and current provides little or no progress towards a North East Wales collaboration Curriculum; . is vulnerable in the face of one College’s changing priorities; . offers no definitive closure for the Colleges and their communities; . is unsustainable offering few opportunities for securing better value for money and could therefore be regarded as unaffordable. 2. Minimum change This option: – retention of . is minimal in conforming to Transformation policy; existing corporations . places the Colleges at risk of falling within the ‘two-college’ but with shared consortium criterion leaving them liable to subsequent merger; sovereignty over . brings parts of the Colleges services together under a legal areas of overlapping framework, however it does not permanently insulate them from the provision and withdrawal of one party, leaving unbalanced provision behind; collaborative . is not sufficiently robust over time; structures for e.g. offers poor value for money over the long-term. ‘back office’ functions. 3. Intermediate – This option: Type B Merger . has the perception to Governing Bodies, and the community of one College taking over the other however sympathetically managed and has a very small chance of acceptance; . creates a risk of conflict which are deemed so great to compromise its value for money. 4. Maximum change This option: – Type A merger . offers a once-and-for-all address to Transformation policy which symbolises the equality of the founding Colleges; . delivers a North East Wales Curriculum; . offers the opportunity to retain the heritages and identities of both colleges; . allows proper deliberation due to a longer merger timescale in planning transitional arrangements without delaying coordination of curricula to benefit students and stakeholders; . maximises efficiencies of centralised services, economies of scale and concentrated capital formation creating the means to optimise funding for frontline services and to invest in new ventures; . has been widely accepted during consultation; . represents good value for money; . offers a better combination of educational, strategic, political and development advantages. Following discussions with stakeholders and potential partners, both colleges agreed that Option 4 (a Type ‘A’ merger) should be taken to emphasise that the merger will be one of equals that will build on existing strengths and bring together two complementary, successful organisations to provide excellent learning opportunities and experiences for young people, adults and employers in North East Wales. Deeside College and Yale Sixth Form College Further Education Corporation are comparable in terms of providing high quality provision, both being ‘A’ category in financial health, and are strong providers of post-16 learning opportunities, including general FE provision, higher education and work based learning, encompassing all learning areas. Due diligence exercises have been undertaken for both institutions. Both reports reflect the strong financial strength of both colleges and the outstanding quality profile. The reports also considered the combined position of the new College and concluded that it would be financially strong, produce an operating surplus, maintain a positive cash position, and generate a significant positive reserve position. Benefits Coleg Cambria will provide a more comprehensive, flexible and responsive curriculum offer, with the potential to improve access and increase choice for a broader range of learners at all levels and ages, and improve progression routes and enable greater course viability. The merger of Yale Sixth Form College Further Education Corporation and Deeside College will bring two complementary and successful organisations together. The merger option proposed is the option that most effectively meets the needs of north east Wales communities and will realise the following benefits: . ensure excellence in teaching and learning, training and learner support by building on the excellent quality of both colleges and disseminating best practice; . optimise and bring together the professionalism, commitment and skills of all staff to deliver the vision and core values of the new College; . provide opportunities to strategically develop the curriculum offer which will widen the range of learning provision and options for all learners within a positive and supportive learning environment; . provide opportunities to collaborate to increase