PC20/21-030
Committee
Regional Strategy Committee
Subject
Options appraisal for alignment of colleges within the partnership
Action requested
☐ For information only
☒ For discussion
☐ For recommendation
☐ For endorsement
☐ For approval
Brief summary of the
This paper informs the Committee of developments since the last
paper
committee on the proposal to explore options for alignment among
academic partners.
Six colleges – Argyll College, West Highland College, Lews Castle
College, North Highland College, Orkney College and the (soon to be
formed) new Shetland Col ege – have proposed an options appraisal
into three options: a model of shared curriculum and services
underpinned by formal agreements, a group structure that
maintained the identities of the colleges and merger. These would be
compared against a do nothing option. The proposal is that the
outcome may be a hybrid model where some partners opt for merger
or group structure and some are part of the wider col aboration.
While this is a ‘bottom up’ proposal coming from the partners, the
university partnership as a whole will, at some point in the future,
have to consider the implications of any plan for change that comes
from the options appraisal. For that reason, the committee’s views on
the proposal are sought.
The proposal that the seven colleges have made to the university
seeking funding is attached to this paper.
Resource implications
Yes
(If yes, please provide
A proposal for funding the options appraisal wil be considered at the
details)
partnership council on 4th November.
Risk implications
Yes
(If yes, please provide
There is a risk that the complex nature of the proposal and the
details)
overlap with the existing change programme means that the
appraisal does not produce a viable outcome and delays progress on
related actions. The executive will work with the six colleges to
ensure this does not happen.
Date paper prepared
23/10/2020
PC20/21-030
Date of committee
01/11/2020
meeting
Author
John Kemp, Senior Adviser, Change Implementation.
Link with strategy
The project, while not formal y part of the change management plan,
is strongly related to its aims.
Equality and diversity
No
Does this activity/
proposal require an
Equality Impact
Assessment?
Data Protection
No
Does this activity/
proposal require a Data
Protection Impact
Assessment?
Island communities
Yes
Does this activity/
Three of the colleges involved in this proposal are in island local
proposal have an effect
authorities. The impact on these communities will need to be
on an island community
considered in the options appraisal.
which is significantly
different from its effect
on other communities
(including other island
communities)?
Status (e.g. confidential,
Non confidential
non-cofidential)
Freedom of information Yes
Can this paper be
pincluded in “open”
business?*
Consultation
The proposal has been developed though partnership-wide
How has consultation
discussions
with partners been
carried out?
PC20/21-030
Options appraisal for alignment of col eges within the partnership
Background
Seven colleges – Argyll College, West Highland College, Lews Castle College, North Highland College,
Orkney Col ege and the (soon to be merged) NAFC and Shetland College – have proposed an options
appraisal into three options: a model of shared curriculum and services underpinned by formal
agreements, a group structure that maintained the identities of the col eges and merger. These
would be compared against a do nothing option. The proposal is that the outcome may be a hybrid
model where some partners opt for merger or group structure and some are part of the wider
col aboration.
At an early stage in this process a group of academic partner chairs wrote to both the Minister for
Further and Higher Education and Science and the Scottish Funding Council. The Minister’s staff have
apologised for the delay in responding. The SFC response has come in the form of the phase one
report of the SFC’s review of coherent provision and sustainability which is strongly supportive of
exploring mergers and other changes within the partnership
The role of the partnership.
This proposal has been developed by the seven colleges involved following discussions begun by a
group of academic partners about the possibility of exploring options for change. In the meetings of
chairs and principals to consider possible proposals, several partners made the point that this
process should not be driven from the centre of the university. The university executive endorses
that view.
The partnership as a whole will however at some stage need to consider whether the outcome of
the process is one that it can support. In considering this we may need to take account of the view
expressed by SFC in its evaluation of UHI as an RSB that:
…the current structures and ways of organising the delivery of education across UHI are
expensive and unwieldy at a time when public funds wil become increasingly pressured,
funding models wil change and outcomes for learners and the Scottish economy wil be
paramount. When changes have been proposed in the past, either through mergers of
academic partners or more vertical y integrated models, they have not commanded support
from al stakeholders. There has been strong representation from the student body that
aligns with our assessment of the current arrangements.
At the time of writing colleges are exploring with UHI options for possible mergers of partner
colleges. We recommend UHI considers consolidation, shared services, recalibrated roles
and responsibilities, and options to ensure it survives and thrives, and gets closer to the
original mission of a more fully integrated tertiary institution. In all options it will be vitally
important to preserve local presence and reach, as well as good further education, while
streamlining governance and decision-making, securing greater curriculum coherence, and
seeking more efficient modes of delivering provision that streamline management costs and
support front-facing services, courses and opportunities for students and local communities.
Some of what SFC recommends is beyond the scope of this options appraisal proposal as it only
includes some of the partners. Some of the recommendations are related to Assembly/change
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programme rather than the mergers or other arrangements proposed in the options appraisal.
However, in assessing the outcome of the options – and perhaps – the commission to the
consultant, it would be useful to test proposals against the SFC view. As is noted in the proposal by
the seven colleges, the options appraisal wil be part of the partnership’s engagement with SFC on its
review. To do this effectively we will need to be assured that the proposals are part of an effective
response to that review.
Next steps
We are not seeking a decision at this committee on whether or not to support the options appraisal.
That decision will be taken though the appropriate approval processes fol owing discussion at the
partnership council. At time of writing the outcome of the partnership council meeting is not known,
but we are assuming it will be supportive of the proposal.
However, in order that the options appraisal is carried out with knowledge of the likely future
requirements of the partnership, the Committee’s views on how well the proposal fits with the
partnership response to the SFC, the committee’s views on the appraisal would be useful in refining
both the proposal or any conditions the university might add to the funding.
Recommendation
The Committee is invited to note the progress of the development of an options appraisal and to
consider any advice to either the university or the partners undertaking the options appraisal on the
proposals to be assessed or the process.
PC20/21-030
PC20/21-030
Project Title: Strategic Investment – Options Appraisal for Highlands and Islands Col eges Group
Date: 28 October 2020
Prepared by: Lydia Rohmer (WHC) - on behalf of Argyll, Lews Castle, North Highland, Orkney, Shetland and West Highland Col eges
1. Background/Context/Rationale
Comments /
Agreement /
Confirmation
1.1. At the end of August 2020, the Chairs of North Highland, Inverness, Moray and West Highland colleges discussed the potential for appraisal of
strategic options for different alignment of academic partners within UHI, including al iances, groups and traditional mergers. The rationale for this
approach and potential benefits were highlighted in three main points:
1.1.1.
Protecting and developing provision – delivering better outcomes and opportunities for students and the communities we serve, recognising
that creating larger entities could potential y network curriculum and support provision and deliver more sustainable and enhanced
opportunities local y.
1.1.2.
Efficiency and sustainability – recognition that pressure on public funding is likely to be greater in coming years, therefore creating significant
pressures on individual academic partner col eges. Efficiency measure currently considered as part of the UHI change plan may be more
effective and potential y more secure through creation of larger groupings of partners, thereby protecting in particular local provision in remote
rural and island communities
1.1.3.
Simplification of the university partnership - the options to be explored would not change the tertiary structure of the university partnership;
however, a simplified partnership structure with potentially fewer partners may contribute to more effective partnership working, in particular
taking forward the change plan and enhancing the work of Partnership Council.
1.2. In order to ensure ful transparency, the four Chairs wrote to Scottish Government and Scottish Funding Council to indicate their intention and to
seek views to inform such an options appraisal.
1.3. Subsequently, al academic partners were invited and encouraged to meet, and consider participating in a partnership -wide options appraisal. An
initial meeting was convened for the nine academic partners who indicated they wanted to discuss this further on 28 September 2020, where it was
agreed that individual partners should take a period of three weeks to discuss potential combinations of partners to inform an options appraisal.
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1.4. A further meeting on 22 October 2020 was held to discuss any proposals for an options appraisal. One proposal was presented at that meeting on
behalf of the seven rural and islands col eges. At this meeting it was proposed that the proposal should be funded and expedited at pace, with the
formal funding allocation to come for due process via Partnership Council and relevant governance structures. The subsequent document contains
this proposal.
1.5. Whilst no formal response has been received from Scottish Government or Scottish Funding Council, SFC’s Phase 1 Report on Coherent Provision and
Sustainable Funding was published on 20 October 2020, expressing an expectation for UHI to ‘consolidate’ and consider academic partner options
within this context, in particular for efficient delivery for remote, rural and island contexts.
1.6. There is a recognition that SFC could be approached for strategic funding to take forward this option appraisal. However, there is agreement that
such an application could waste precious months when the colleges (and UHI) want to move forward at pace, intending to have a completed exercise
by April 2021 at the latest to inform next steps. Any subsequent change proposals agreed to be taken forward based on the options appraisal would
apply to SFC’s for strategic funding for support and implementation. There is recognition that an available options appraisal would help secure such
funding from SFC more quickly.
2. Brief Description: Purpose, outputs, benefits
2.1. The seven rural Highland and Islands colleges would like to explore opportunities for more strategic collaboration in a formal options
appraisal to ensure their continued sustainability and grow opportunities for our students and staff and our communities.
2.2. They share a common operating context in terms of ‘remote rural’ and ‘island’, as well as similar operating size.
2.3. Some of the col eges have been sharing some corporate services for a long time (NHC, AC, WHC); some are and have been sharing further and higher
education curriculum delivery (AC, WHC, NHC and LCC); and some are linked already in strategic growth deals (LCC, OC, NAFC and SC in the Islands
Deal; NHC and WHC in the Inverness City Region Deal). Col eges on Shetland are already working on formal merger and formation of a new college
which wishes to be included in these considerations. This grouping therefore is an opportunity to formalise, consolidate and enhance existing
collaboration and to collaborate to maximise those opportunities.
2.4. The colleges are open to explore strategic options for change that add value and efficiency to their current operating model, including curriculum,
research, academic and corporate services.
PC20/21-030
2.5. As part of the formal options appraisal, the seven colleges would like to investigate the a number of set options for strategic collaboration which
delivers sustained and enhanced provision and opportunity for students, staff and the communities/geographies the colleges currently serve
individual y; enhanced sustainability and efficiency; positive impact on the wider UHI partnership.
2.6. Despite common outlook and agreement on which options to investigate formally as part of this exercise, each of the seven colleges has a different
starting point, with some partners currently not yet in position to consider formal merger or requiring additional steps. The purpose of a formal
options appraisal wil be to create a solid evidence base on which to take a strategic dialogue and subsequent decisions of individual col ege boards
and the boards of all seven colleges forward. The options appraisal will therefore be asked to consider the deliverability of any of the proposals
within each option, recognising that we can only proceed with actions that can produce benefits quickly and have a chance of high success. The
options appraisal will also provide a recommended roadmap which identifies how partners could engage over a period of time with the options for
strategic collaboration investigated. To ensure momentum for change, the option of ‘do nothing’ wil also be formal y investigated and implications
presented.
2.7. Whilst there cannot be any formal commitment to adopt any specific recommendation provided by the options appraisal, the seven colleges are
agreed in their wish to formal y explore the options available to them based on a consensus view that the current status quo is not a sustainable
option.
2.8. In addition to informing the consideration and decision of the seven academic partner boards, the options appraisal project and report wil provide
strategic benefit for UHI’s strategic change process to better realise UHI’s potential as an integrated tertiary university, and can form an integral part
of UHI’s strategic engagement with SFC’s Review of Coherent Provision and Funding.
3. Scope
3.1. The seven colleges would like to take forward an appraisal of the following options through a formal assessment of benefits and risks, to provide a
basis of evidence to inform further strategic dialogue at individual Board level and between our colleges:
Option 1 - A federated partnership model based on a contractual agreement for sharing of curriculum and identified services,
recognising the opportunities of existing col aboration amongst the remote rural and islands partners for curriculum, services and
growth deals
Option 2 - A group structure which delivers benefits of a single corporate body in terms of strategic and financial planning and
efficiencies, but retains a local identity, management and governance for each member of the group (based on models of group
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structures currently in existence in FE and HE within the UK [example LTE Group or Newcastle Col eges Group], but currently not
utilised in this form in Scotland)
Option 3 - A merger model for some or all of the seven members – creation of a single new corporate entity into which members
transfer
Option 4 - ‘do nothing’/status quo: what are the implications?
3.2. Recognising that some members are not in a position to contemplate Options 2 or 3 at present, we would also want a ‘roadmap’ based on options 1,
2 and 3 over a set period of time for this group of colleges
3.3. The report should also provide an assessment over the respective benefits and risks of Option 2 versus Option 3 as variants of merger in the context
of local and regional structure and governance arrangements
3.4. The report should consider that Option 3 may be possible for some colleges nested within a wider adoption of Option 1 and 2 at the same time
3.5. The report should also consider impact of each option on other academic partners in UHI, including impact on UHI as a whole.
3.6. In order to progress the above, the seven col eges want to commission an external consultancy resource. Given Option 2 is of particular interest as a
potential form of alignment, and currently there are no such structures in operation in tertiary education in Scotland, the colleges are looking
specifically for a consultancy service which has direct experience of/expertise in the further and higher education group structures operating in the
UK today, including experience of delivering successful shared services in a tertiary education context.
4. UHI Strategic Plan/ICT Strategy/Roadmap ref/other
4.1. See section 1 on ‘Background/Rationale’.
4.2. This proposal aligns with the UHI Strategic Plan, and the more recent recommendations for UHI’s strategic change expressed by UHI’s Assembly and
the approved Change/Crisis Management Plan. The proposal also aligns with SFC’s expectations of UHI to develop at pace to ensure it delivers its full
potential as an integrated tertiary organisation. Section 10 also highlights further the strategic benefits of this project and the risks to UHI if it was not
progressed.
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5. Assumptions
5.1. The assumptions of delivering more sustainable provision, efficiency and positive impact on each college and the wider partnership will
be
tested fully as part of the commissioned options appraisal.
6. Budget/Funding and Income & Expenditure Forecasts
6.1. It is proposed to secure the services of a consultant who can undertake al the required investigations and consultation into the proposed options,
producing a final report with an options appraisal and a set of recommendations. This report would be received by the seven academic partners and
UHI to inform both individual and collective strategic dialogue and action.
6.2. Whilst the budget requires to be tested for this through further market testing, it is assumed that the options appraisal and report could be secured
for circa 50k (ex VAT/expenses). This value has been arrived at from knowledge of cost of similar exercises and reports in UHI and the sector.
Therefore, this is the amount of strategic funding sought for this proposal.
7. Key personnel (internal) and required commitments
7.1. In addition to the cost of the consultancy outlined in section 6, an internal project support resource wil be required to assist the development of an
agreed project brief; procurement process; and act as organisational point of contact for the consultant to undertake their investigation. The
procurement process should be able to be supported from within UHI’s procurement team. For the internal project support resource, it is hoped that
this resource could be found from with the current change management team.
8. Schedule/Deadlines
8.1. Subject to being able to securing agreement for strategic investment funding for this project by mid-November 2020, the following timeline is
envisaged:
• Development of Procurement Brief: by mid-November 2020
• Procurement Process: mid-November to mid-December 2020
• Evaluation of Procurement Outcome and Appointment of Consultant: by end of December 2020
• Investigation Phase: January and February 2020
• Report Development and Finalisation: by end of March 2020
• Report to be considered by 7 academic Partners and UHI: April 2020
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9. Known Issues
9.1. Colleges on Shetland – Shetland Col ege, Train Shetland and the NAFC Marine Centre are engaged in formal merger. The projected timeline is for the
new Col ege (Shetland UHI) to be vested in the summer of 2021. Oversight of the merger project and the new College is with a separate Transition
Board which wil need to appraise the options for Shetland UHI for the future. At present the two current colleges on Shetland and their boards will
have a watching brief and wil also need to contribute to the options appraisal for completeness.
10. Risk Assessment – consider the impact on the university if anything went seriously wrong with this project according to the criteria in the table below
10.1. Risk of loss of reputation and standing with SFC and potential loss of future strategic funding from SFC if there was no UHI support for this options
appraisal: the SFC Review Phase 1 report published on 20 October 2020 highlighted a clear
expectation that UHI actively considers options
appraisal of academic partners.
10.2. If this project was not progressed, UHI would also risk losing out on strategic development and growth opportunities in the
following areas:
10.2.1.
Strategic alignment: the proposal supports national and regional priorities in preserving local presence, opportunity and reach
whilst
creating a more aligned and efficient model that helps colleges and UHI to survive and thrive.
10.2.2.
Institutional development – the proposal wil provide a foundation on which strategic options for better alignment of academic
partners
can be considered and which wil benefit UHI’s partnership as a whole
10.2.3.
Growth – the proposal provides options for consideration which may lead to delivery of more equitable and sustainable
opportunities for
learners and communities in remote rural and islands contexts, and may lead to new opportunities for
investment and growth
10.2.4.
Efficiency – the proposal will test ways to increase efficiency of curriculum and service delivery, as well as effectiveness and impact
10.2.5.
Sustainable – the proposal is driven by investigating the best way to assure sustainability of academic partners in remote rural
and
islands contexts within UHI, as well as securing sustainable provision to students, local communities and stakeholders.
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10.2.6.
Implementation – once the resource is approved, the project is ready to be implemented at pace, with al participating partners
ready to
go forward.
11. Extent of discussion/consultation in developing proposal
See section 1 above on Background/Context/Rationale
Recommendations
Approve/Reject/On-hold
Category of Activity
Work package/minor project/major project
Lead Person
Priority
Next steps/Actions
PC20/21-030
Signed off by:
Date
Document Outline