LeARNING FROm meRGeRS - THe CASe STuDIeS

Voluntary and Community Action Wirral
WirrAl, merseyside

Voluntary and Community Action Wirral (VCAW) was formed in April 2008, bringing together four of the five local councils for voluntary service (CVSs) into a new organisation.
Before VCAW was formed, there were five CVSs operating in the Wirral: Wirral; Bebington; Heswall and District; Hoylake and District; and Wallasey. Wirral CVS worked Wirral-wide, focusing uniquely on providing infrastructure services. It also hosted the Wirral Voluntary and Community Sector Network. In contrast, the other four CVSs functioned as providers of infrastructure services, but also delivered services direct to communities. Heswall CVS, for example, delivered holiday coaching courses and summer playschemes; Bebington CVS provided Befriending and Counselling services. All provided some volunteering services, although not all were funded to deliver volunteer bureaux. Of the district CVSs, Bebington was the largest and the only one to be a charitable company; the others were unincorporated charities. On the whole the CVSs worked separately, but some history of joint working underpinned the merger. For example, two of the CVSs had previously delivered a joint BIG Lottery project in partnership. They had also worked closely with another of the CVSs, which suffered a tragedy when its chief officer died suddenly in 2006. Rather than appointing a new chief officer immediately, two other chief officers gave support, for example to carry out monitoring for funders. Similar support was offered to another CVS whose chief officer was on long-term sick leave.

2006 Chief officers start to discuss merger Preparatory work to scope out merger June 2006 decision in principle to merge taken by the five chairs; Steering Group set up

June 2007 Merger preparations: each organisation undertakes due diligence and consultations New charitable company set up

december 2007 New chief officer appointed; Wirral CVS pulls out of merger

April 2008 Merger date Post-merger phase

motivations for merger
Chief officers recognised that there was considerable similarity between the services that the district CVSs provided, and potential for some duplication with the infrastructure support delivered by Wirral CVS. Those running volunteering services recognised that these could be more effective and consistent across the Wirral if there was more collaboration. There were also some capacity issues amongst staff and trustees, not least because two CVSs were operating day-to-day without a chief officer. The prospect of merger offered staff the opportunity for more management support and security. “With the chief officer issues, we started to think we’re all too small to cope with this - the CVS who lost its chief officer only had one other staff member and was otherwise volunteer run.”
Stakeholder

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“We recognised that the external environment was changing and that external funders were sick of talking to five about the same thing.”
Chief offiCer

VoluntAry And Community ACtion WirrAl
At the same time, there was an acceptance that the funding environment was unlikely to keep supporting five similar organisations. Although external funders had not explicitly encouraged the CVSs to merge and funding was not under threat at the time, some funders had encouraged joint bids. Chief officers and chairs also perceived that the local authority would prefer to work with one organisation rather than five. The Citizens’ Advice Bureaux in the Wirral had recently gone through a merger, working closely with the local authority in doing so, and there was a sense that if the CVSs did not act of their own accord, in future they might be under pressure to do so.

“We didn’t want to be forced to merge, we wanted to do it in our own time and for it to be our decision.”
Stakeholder

The merger model
The decision in principle to merge was taken in June 2006 at a meeting of the five CVS chief officers and chairs. Following this meeting, a steering group including the five chairs and chief officers was set up to oversee the merger. The CVSs looked around for suitable models on which to base their merger, and chose a similar model to that used in Cumbria - at the time, a high profile example of a CVS merger. Steering group members visited Cumbria CVS as part of the process. This model was chosen to enable each CVS to be equal partners in the new organisation, rather than making it feel like four were being taken over by another. It was felt to be “workable” locally, and “fairest to the chief officers”, who could compete on an equal basis for the chief officer role in the new organisation.

“We didn’t want a takeover. We wanted a merger of equals.”
Stakeholder

A new company was set up in 2007, with the five CVS chairs as its directors. This company started to look for funding straight away. The directors fed back to each CVS and all decisions were taken back to the five CVS boards for approval - although for decisions to be passed, it was not necessary for all CVS boards to agree, only a majority. A launch date for the new merged organisation was set (April 2008), and it was agreed that at this point each existing CVS would dissolve its assets and put them into the new company.

The merger process
In preparing for the merger, each organisation worked through the NCVO’s due diligence checklist and each employed a solicitor and external auditor to go through these. One organisation’s finance officer visited the others to review their finances. The CVSs kept local authority funders informed of the process, inviting them to some of the steering group meetings. Prior to the launch, they gained agreement from the local authority to put the core funding for 2008/9, which otherwise would have distributed across the five organisations separately, into the new company.

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VoluntAry And Community ACtion WirrAl
An external consultant worked with trustees to draft a first business plan for the new organisation, to which staff then contributed. A chief officer for the new organisation was appointed in December 2007, from amongst the chief officers of the existing organisations. Having taken advice from external HR advisers, an employment lawyer and the Advisory, Conciliation and Arbitration Service (ACAS), the CVSs overall took the view that an internal appointment needed to be made as the role was essentially the same as the chief officers’ existing roles. This meant that if an external appointment was made, the chief officers could have been in a position to sue for unfair dismissal. However, one of the CVSs had expressed a strong preference for an external appointment. However, the merger did not go ahead quite as planned. Towards the end of 2007, Wirral CVS decided to pull out. As a result, VCAW was launched in April 2008, formed of four of the five local CVSs, while Wirral CVS continued in its previous form.

“We made the conscious decision that we wouldn’t get rid of people. although we talked to staff that there might be changes in what they did and where they did it, they didn’t have to worry about their jobs going.”
Stakeholder

Success factors for the merger
In going through the merger process itself, success factors included making sure staff were kept informed and involved. Joint consultation events were held with staff as well as sessions with staff from individual CVSs. Some local frontline organisations had gone through mergers recently, and officers from these came in to speak to CVS staff about the process. Although some staff were concerned about the change, others were “looking forward to it”, as the new organisation would give them access to more management and administrative support. Staff were also reassured that their jobs were safe. Support from the Charity Commission was also invaluable. The Charity Commission’s case worker gave the steering group the different options available to them, and advised on the legal processes they would need to go through to set up the new company, inform the Commission of the changes, and so on. In the end, the legal process of setting up a new company was actually “quite straightforward”.

Benefits of merger
VCAW is seen by staff, trustees and funders as a “stronger organisation” since the merger. It is funded by the local authority under service level agreement to deliver community engagement and lead on the Wirral Compact, and also now hosts the Wirral Third Sector Assembly (formerly called the Voluntary and Community Sector Network). VCAW represents the voluntary sector on Wirral’s Local Strategic Partnership and being one organisation means that staff are kept more closely in touch with developments at a strategic level. Financial benefits so far have mainly been around achieving economies of scale, for example with insurances, and in paying for professional services such as audit.

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VoluntAry And Community ACtion WirrAl
The impact on staff overall has been positive. No staff were made redundant during the merger. This was possible because apart from the chief officers, there were no repeated roles within the four organisations that merged. Since the merger, there have been two redundancies, but these were related to the loss of project funding rather than restructuring. Nevertheless, some staff have taken on new roles. For example, three new senior manager posts have been created and are now the chief officer’s only direct reports. Previously, she line managed the majority of staff, so this has freed up time to focus on strategic management. Some staff have moved from back office functions to frontline delivery. For example, one staff member has moved from an administrative role to a funding advice role, having been supported to achieve a level 3 qualification in Information, Advice and Guidance. A key benefit for those who previously worked in smaller organisations has been that they now have more management support and better structures. The organisation is seen as “more professional”. It has recently achieved Investors in People accreditation. VCAW has maintained its local presence, operating from four locations across the Wirral. Frontline organisations are now offered a more structured route through VCAW’s support services, with different managers responsible for providing advice on starting up a new organisation, seeking funding opportunities and strategic influence, and moving towards income generation. Working across the Wirral, volunteers now get a wider range of opportunities and some are involved in more than one service, which would not have happened before. As yet, VCAW has not evaluated the effectiveness of its support for frontline organisations and volunteers, but staff expect and hope that the impact has been positive. The board of trustees has been significantly strengthened. Following the merger, a skills audit was carried out, and several new board members have been recruited to fill the skills gaps identified. As a result, staff now feel better supported by their trustees. The organisation has set a new, clearer strategic direction and has taken a decision to focus more on infrastructure support and less on service delivery to individuals living in local communities.

Challenges
Although the merger process itself was quite straightforward, it took considerable time – around two years – and one of the reasons for this was the pressure on resources. The steering group was meeting weekly in the few months heading up to the merger, and staff were carrying out tasks related to the process “on top of their day jobs”. When the chief officer was appointed at the end of 2007, she was also still working as chief officer of Bebington CVS. No additional funding was received to support the merger process, which is estimated to have cost around £50k in total which each CVS contributed to. Additional administrative and research

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VoluntAry And Community ACtion WirrAl
support - “a practical pair of hands” - for example to carry out research in preparation for board meetings, would have been helpful.

“We were relying on staff to do things over and above their day job, for no financial reward. it put pressure on everybody. Which is why we couldn’t do it faster.”
Stakeholder

By summer 2010, VCAW had been running as a merged organisation for just over two years. During this time, there has been a focus on “getting people working together as a new organisation”. This hasn’t always been easy – one stakeholder described it as “an uphill struggle… but now we’re there or thereabouts”. The organisation has had to tackle some cultural issues, such as differences in working practices and management styles. Communication continues to be a challenge, as it’s necessary to make more of an effort to keep staff across different offices informed of what’s going on. Issues around staff contracts and people being paid differently for the same types of work also arose at first. Getting staff to feel as if they are part of the same organisation has also taken some time – in VCAW’s first year, for example, each office had its own Christmas party; in its second year, a conscious decision was taken that the organisation should have a joint ‘do’. An ongoing challenge has been the impact of Wirral CVS withdrawing from the merger. Although this did not derail the merger, it has meant that there is still some duplication in local service delivery, so the full benefits of merger in this sense haven’t been realised. Stakeholders also report that external funders have been less willing to provide funding for infrastructure in the Wirral unless VCAW and Wirral CVS collaborate, but this has been difficult after the breakdown in this element of the merger.

lessons leArned
• The more you can communicate with staff before, during and after the merger process, the better. Inviting in people from organisations that had already been through a merger to talk to staff was one method VCAW’s predecessors used successfully to help reassure their employees. Setting up the new company and appointing a chief officer some time before the new organisation was launched was helpful for VCAW, although it was a considerable challenge for the chief officer at the time, who was also continuing to run one of the CVSs that was to merge. Appointing the new chief officer even earlier, so that this person could give the steering group more guidance, might have been helpful. Don’t underestimate the time it takes for a new organisation to start delivering to its full potential. For VCAW, the period after merger has probably been more challenging than the merger process itself. Anticipating issues such as differences in working practices, staff pay and conditions prior to the merger could help ease the process afterwards.

• •

for further information about this case study, please contact:
annette roberts, Chief officer, Voluntary and Community action Wirral 0151 203 2111

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