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Published by ImprovingSupport

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Published by: ImprovingSupport on Dec 15, 2010
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GndwN Es
The merger was partly prompted by local government reorganisation.Durham became a unitary authority in 2009, meaning that there were nowtwo Groundwork trusts working in the same local authority. As a result,these two were already considering merger. Meanwhile, some parts of theregion were somewhat under-served, and regional partners, such as theRegional Development Agency, were supportive of closer working.The trusts also faced some capacity issues. For example, it was not possiblefor each to recruit a landscape designer, so a regional landscape designteam had been set up. The trusts were considering doing somethingsimilar for other teams. There was a recognition that more collaborationand could better serve local people.The catalyst for merger came from Groundwork UK, which was looking atstrengthening regional delivery and bringing more consistency to projectmanagement and reporting systems across Groundwork trusts. The centralorganisation was encouraging Groundwork trusts to choose one of twooptions: creation of a single regional trust (‘model A’), or creation of a newregional independent trust to work with all trusts in the area (‘model B’).As ‘model A’ offered a chance to rationalise human resources and addresssome of the capacity gaps already identied, while ‘model B’ would havemeant creation of yet another organisation, the North East trusts chose theformer.
ScarborouGh, North YorkShirE
Groundwork North East was formed in July 2009 following themerger of four Groundwork trusts and the regional ofce of Groundwork UK. Rather than setting up a new organisation,assets from four organisations were transferred into the fth,which then changed its name. Another Groundwork trust in theregion chose to remain independent. The four Groundworktrusts that merged – West Durham and Darlington, outh Tees,East Durham and Northumberland – had similar roles andactivities prior to the merger. While staff from different trustsknew each other, and chairs met quarterly via the regionalcommittee, there was little history of joint working.
Working Groupundertakesconsultations andstarts preparationsor mergerChie ofcer leadson due diligenceprocess andoversees ormalsta consultation 
ags 2008
Initial discussionsbegin; WorkingGroup set up
Fey 2009
Boards make ormaldecision to merge;one o the trustspulls out o merger
apl 2009
New chie ofcer isappointed
1 Jly 2009
Merger datePost-merger phase
GrouNork North EaSt
Pge 2
The merger process
nitial merger discussions started in August 2008. A working group,comprised of representatives from the trust boards and the chair of theregional committee, was set up to drive the merger forward and lead onthe consultation process. A further series of working groups took forwardspecic elements of the merger process, including nance, R, T systemsand administration and projects. During 2008/9 the trusts received £50kfrom Groundwork UK to support the merger process, which helpedtowards paying for solicitors and legal costs, external recruitment support,new branding and later, implementation of a new T system.aving chosen in principle to form a single regional trust, the regionalcommittee decided that the model of merger would be a transfer of assetsinto one of the existing trusts, Groundwork West Durham and Darlington,which would then change its name to Groundwork North East. This modelwas chosen partly so that the new organisation would have a track recordand trading history.t was also more straightforward than setting up a new trust and dissolvingall the existing organisations. West Durham and Darlington was the mostcomplex of the trusts structurally, and had an income-generating businesscentre, The Greenhouse, plus a wholly owned subsidiary. t would thereforehave been the most difcult to dissolve, so made sense that it was this trustthat the others transferred their assets to.The boards of the individual trusts took the formal decision to merge inFebruary 2009. At this point, one trust decided not to go through with themerger, and the director of the regional ofce resigned.Despite one trust pulling out, a formal decision was taken to continue withthe merger. The next step was to bring in an external consultant to leadthe recruitment of a managing director for the new organisation. This postwas lled by April 2009, an internal appointment. Key tasks for the newmanaging director included:leading the due diligence processoverseeing a large formal staff consultation on the new organisationalstructureThe due diligence process was carried out ‘in house’. Groundwork NorthEast produced a due diligence pack and asked each trust to work throughit. The pack included a list of what needed to be covered, agreed bysolicitors. A working group then spent a couple of days cross referencingand checking to pick up any economic, technical and organisationalissues, which were again cross-checked by solicitors. Using solicitors in thisway, rather than getting them to do the whole process, saved the trust aconsiderable amount of money.The organisational restructure included identifying 25 posts as ‘at risk’(out of a total of 150), meaning that some staff needed to apply for rolesin the new organisation. owever, 23 new posts were on offer, so fewredundancies were expected.
“So having made this decision[to create a single regionaltrust], how we did that camedown to the ease o gettingthings approved by theCharity Commission.”
GrouNork North EaSt
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 difcult, 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.
Pge 3
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.”
Benets of merger
Groundwork North East has beneted nancially since the merger.Although one-off costs have been incurred, longer term cost savings havebeen made through sharing back ofce costs - there is only one nancialdirector, rather than four, for example. The former Groundwork UK regionalofce was closed, saving overhead costs, although a new ofce 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 benets for staff and the process itself helped to

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