“We will need to move towards fewer, often larger, more resilient and efficient providers.” That was very much the message that has underpinned the area based review process. And for very good reasons, the FE college sector needs to reform to meet the demands of public policy changes, the challenges of reducing budgets, increased localism, and changes in the markets for education and training.

The area based review process is supposed to deliver benefits for the key stakeholders in education and training, including learners, employers, the wider community, taxpayers and also for the colleges that undertake the process. It should lead to a more rational, objective and collaborative approach to planning post-16 provision in an area that would avoid wasteful duplication and create more demand-led, flexible and responsive curricula to meet educational and employer needs, eg to increase the number of apprenticeships. It would strengthen the regional reputation of colleges and also create a clearer and well understood brand for FE.

There are potential economies of scale if colleges merge or federate as a result of the process. It would enable colleges to reduce operating costs – especially staffing costs – create specialist education and training centres, and deliver higher quality provision, particularly at higher levels. At the very least, rationalisation into fewer, bigger colleges or college groups could save money through better shared services, such as MIS and IT. But throughout the process, the need for inclusive and comprehensive post-16 institutions for those who are more vulnerable and least qualified, and those who are less likely to travel, must be a key consideration.

The best ways of working and structures to respond to changing needs and demands, and also to deliver these benefits, should be considered by individual colleges and their governors. Options for specialisation, joint working, shared services, ‘soft’ and ‘hard’ federations and mergers need to be considered, and the pros and cons of each in turn. There has been a significant ‘rush to merge’ to improve financial security and establish a stronger brand for FE.

However, there are several reasons to doubt whether area reviews and the resulting mergers will deliver the expected outcomes and benefits. Firstly, bigger colleges do not necessarily mean more efficient colleges. Cutting costs without investing in new physical and human capital does not mean that efficiency and effectiveness will improve. Diseconomies of scale can also accrue, eg difficulties in managing larger, more complex organisations, loss of niche markets and communication problems. Also, although being bigger can protect colleges from the impacts of funding cuts, some of the biggest college groups have actually experienced falls in total revenues in recent years. Banks and other creditors are also getting increasingly nervous about the future viability of colleges.

Secondly, the merger process itself can be very expensive and disruptive. Integration of systems and harmonisation of conditions can be complex, take time and be costly initially. More significantly, establishing a new culture or single ethos in the larger organisation can take a long time and can be fraught with difficulties if not managed well. It can also mean a huge drain on legacy knowledge with new inexperienced managers coming through at a time of great austerity and this can lead to ‘organisational wobble’.

Thirdly, the proposed benefits to learners and the curriculum can be the most difficult to achieve. Duplication of curriculum offer may be reduced but at the cost of learners having to travel further to study, or the removal of some ‘boutique’ courses, eg mergers in Scotland have led to a significant reduction in adult part-time participation. Aligning the curriculum with local economic needs may lead to short termism and negative impacts, for example if an industry suffers a sudden downturn in fortunes. Establishing a clear, consistent teaching and learning strategy across a complex multi-site organisation is also more difficult, eg to meet the challenge of Ofsted.

So, on the journey to there being ‘fewer, larger, more resilient and efficient colleges’ there are lessons to be learned, and sometimes they will be learned the hard way!