GrouNork North EaSt
LEARNNG FRM MERGER - TE AE TUDE
uccess factors for the merger
Treating all of the merging trusts as ‘equals’ in the process was critical toits success. Although trusts varied considerably in size – from 8 staff to 70– and some were nancially stronger than others, the merger discussionsfocused on the positive aspects and skills that each would bring to the neworganisation. The process is legally a merger, not a takeover, and the neworganisation has ‘merger accounts’.ommunicating the changes effectively to staff was seen as really importantto the success of the merger.A further success factor was that Groundwork West Durham and Darlingtonunderstood what mergers involved - having been through similarprocesses twice before. ne of these, a takeover of a smaller charity,had been successful, while another more recent takeover had been muchmore difcult, with a pension liability causing serious problems. taff andtrustees therefore had a good idea about what types of issues might comeup, particularly around due diligence, before embarking on the process.
The merger took place on 1 July 2009, although owing to an issue aroundpensions that still needed to be resolved, one trust did not merge until laterin the month. During July, staff whose roles were at risk were interviewedfor new roles, and new terms and conditions of employment for all staff were agreed. By 1 August 2009, staff were in their new posts.
“You need everyone to eelthat they are coming in as anequal partner. This is reallyimportant i want to make ita success.”
“ major beneft was thatwe could take the best termsand conditions rom otherorganisations – so sta nowhave better salaries, moreholidays, better conditionsand eel more secure. Sogenerally sta are airlypositive.”
“It’s been a antasticexperience. When we didthe skills matching process,writing down what we’dachieved, it showed weachieved a lot and now,having gone through themerger, we’ve achieved evenmore.”
Benets of merger
Groundwork North East has beneted nancially since the merger.Although one-off costs have been incurred, longer term cost savings havebeen made through sharing back ofce costs - there is only one nancialdirector, rather than four, for example. The former Groundwork UK regionalofce was closed, saving overhead costs, although a new ofce has nowbeen opened in underland to give more consistent coverage across theregion.Turnover has also increased, from £7.9m in 2009/10 to some £12mpredicted for 2010/11. This is partly as a result of securing a number of new, larger contracts for service delivery, which has also meant that 50new staff have been recruited. takeholders felt strongly that this wouldnot have been possible if the organisations had not merged. The size andscale of the new trust has increased its capacity to win large contracts, andits senior management are also able to “act and decide on things as one”,meaning they are better able to take advantage of new opportunities. Thetrust is also applying staff day rates more consistently in order to ensure fullcosts of service delivery are recovered.Although some jobs were at risk and the process of transferring to a neworganisation necessarily involved some insecurity, the new structure andorganisation has offered benets for staff and the process itself helped to