PROPOSAL FOR MERGER BETWEEN KIDDERMINSTER COLLEGE AND NCG FINAL MERGER PROPOSAL. 1. Introduction 2. 2. Executive Summary 3

PROPOSAL FOR MERGER BETWEEN KIDDERMINSTER COLLEGE AND NCG FINAL MERGER PROPOSAL CONTENTS Page no 1. Introduction 2 2. Executive Summary 3 3. Background and the Case for Merger 11 4. The Geographical Area impacted by Merger 14 5. Kidderminster College 21 6. NCG 23 7. Benefits and Objectives of Merger 29 8. Branding and Quality Arrangements 40 9. Stakeholder and Partner Engagement 44 10. Financial, Legal and Estates 46 11. Governance, Management and Staffing Arrangements 50 12. Public Consultation and Due Diligence 54 Appendices Appendix 1 NCG Structure Incorporating Kidderminster College PURPOSE Kidderminster College and NCG propose to merge to form a single institution. This proposal document explains how the merger will take place, and how it will improve the future range and quality of training and education in Kidderminster and the Wyre Forest. The document incorporates the feedback from the recent consultation process. 1

1. INTRODUCTION On behalf of our respective organisations, we submit this Full Proposal to merge Kidderminster College and NCG. Since the approval of the Initial Outline Proposal by both boards in February 2014, managers and staff from both organisations have worked with great purpose to formulate a realistic plan to achieve the merger on 1 August and deliver benefits to both organisations. We are encouraged that this collaborative approach has already identified many areas where we can benefit from working together and we are confident that there are significant additional benefits to be derived from a formal merger of Kidderminster College with NCG. Our vision is to continue the improvement journey of Kidderminster College to create a high performing and successful institution, which is responsive to local need and to the wider skills priorities. We will ensure that, as a result of our proposed merger, learners and key partners in Kidderminster and the Wyre Forest will benefit from the provision of high quality education and training within the heart of their local community. To this end, we intend to work with all our key partners to play a full role in the future prosperity and contribute to the wider social and economic development agenda of the area. We believe that Kidderminster College can inspire and engage its local community as part of NCG and that our proposal will meet the requirements of all who have an interest in the future success of the College. Mr David Cory Chair of Governors Kidderminster College Mr Jamie Martin Chair of Governors NCG May 2014 2

2. EXECUTIVE SUMMARY Kidderminster College Kidderminster College is a small and successful general further education college. It enjoys good success rates and sound finances. It operates at the heart of its community, in Kidderminster and the Wyre Forest, and enjoys a high reputation for the quality of its provision. In 2013 the college conducted a careful and thorough strategic review, and concluded that there were two key options for its future continued independence or merger with the right partner(s). The college has actively chosen to pursue a suitable merger as the best means, in the current and anticipated environment, to further the ambitions it has for those it serves. NCG In 2013 the Corporation of Newcastle College formally adopted its trading name NCG as the new name of the Corporation. NCG has evolved over several years through a process of growth, merger and acquisition, into one of the largest providers of high quality education, training, employability and work-based learning in the UK. There are currently five divisions of NCG: Newcastle College, West Lancashire College, Intraining, Rathbone Training and Newcastle Sixth Form College. NCG is recognised for its strong leadership and management, excellent governance, and is a sector leader in respect of its financial performance. The organisation has a first rate reputation regionally and nationally, and a commitment to the highest standards of delivery. Over the past ten years, NCG has developed an operational model that is capable of delivering excellent education and skills on a national basis in a wide range of settings, whilst preserving an appropriate level of autonomy. Why Kidderminster College should merge with NCG The strategic review conducted by Kidderminster College concluded that a merger with a strong and suitable partner was its preferred option for future development. A merger with NCG will successfully fulfil this ambition, allowing the college to retain its own brand, identity and presence in the local area. The proposal is that Kidderminster College will form a distinct operating unit of NCG, and will operate with a high degree of agreed autonomy within the NCG structure. Kidderminster College will retain its full local identity, current sites and provision, with local leadership provided by the Principal and Senior Management Team. A Kidderminster College Advisory Committee will be established, and a place on the NCG Board will be made available for a representative of that Committee. The objectives for Kidderminster College within NCG will be to continue with its existing ambitious plans for growth and continuous improvement. The intention will be to: 3

Build on the current good financial position. Continue the staff focus on the core business of teaching and learning. Benefit from shared good practice in raising standards and outcomes for learners Review the accommodation portfolio to develop a coherent and affordable property strategy. Utilise NCG s capacity in IT and e-learning to extend access and improve quality. Utilise NCG s shared services model to provide effective back-office support. Create a single integrated learning offer for adults from Foundation Level to Level 7 including employability programmes. Strengthen the range and accessibility of vocational learning for young people to support the economic regeneration of the area and improve the career prospects of learners. Support progression routes to higher education (HE) and higher skills. Engage constructively with business to meet its needs and build reputation. Assist local authorities with their imperative to drive up educational standards at all levels. Meet the needs of the wider region in key specialist areas. Benefit from the activity and contracts of other NCG divisions operating in the wider West Midlands region. Build on, and seek to enhance, the college s current Corporate and Social Responsibility activities The merger of Kidderminster College with NCG has the potential to be extremely beneficial to both organisations. Kidderminster College will be able to retain its successful local identity and realise its ambitions for future stability and growth through the support of NCG. NCG will be able to consolidate and enhance current operations in the West Midlands by adding a flagship college base. Merger Method and Date It is proposed that Kidderminster College 1 will merge with NCG under a model B merger arrangement, i.e. with the corporation of Kidderminster College being dissolved and its assets and liabilities being transferred to NCG. The date of the merger is planned to be 1 August 2014. Creating the Kidderminster College of the future Through merger with NCG, Kidderminster College will be well positioned to deliver stability and future growth in the provision of education and training in the area served by the college. NCG s mission is to develop people through learning and achievement for the benefit of themselves, society and the economy. To deliver 1 When the term Kidderminster College is used in this document in relation to arrangements after 1 August 2014 it refers to a Distinct operating unit of NCG in West Midlands with a distinctive remit to serve the needs of Kidderminster and the Wyre Forest area 4

the mission NCG has aligned its business objectives and operational processes to six core values: put the needs of the learner and customer first innovate and support excellence in learning and employability promote diversity and social mobility value, involve and invest in staff foster strong relationships with employers, partners and communities secure our future through strategic investment and profitability This mission and these values align closely with the current mission and values of Kidderminster College. Curriculum and Quality Being part of NCG will help Kidderminster College to continue to raise standards of teaching and learning and success rates and identify new products which will meet the needs of local people and employers. The aim is to: Finance Continue to align courses to the Government s new curriculum developments for young people and adults Build activity in line with local, regional and national priorities Develop the 14-16 offer to meet the needs of young people Expand HE provision and as part of doing so introduce Foundation Degrees Increase the range of real working environments (RWE) which reflect the skills needs of Kidderminster and beyond. Develop effective response to 19+ adult skills and employability needs Align quality systems and approaches to deliver whole college engagement in raising standards and apply best practice across the whole of the larger organisation Use the experience of NCG in raising standards and institutional transformation to benefit managers and staff at Kidderminster College Share good practice across occupational areas in terms of curriculum development, shared resources, expertise and employer networks/links Kidderminster College has managed its finances, in an environment that has been tight for the whole of the sector, in a sound fashion, and has steadily improved the efficiency of its operation. It successfully restructured its key manager roles in 2011. The FMCE (Financial Management and Control Evaluation) review, as part of the Ofsted Inspection in 2011, assessed the college s Financial Planning and Financial Controls as Outstanding. The SFA assessed the financial health of the college in 2012-2013, on the basis of the audited Financial Statements, as Good. The SFA endorsed the College s self-assessment of its financial health for the period of the latest 2-year Financial Forecast as Good. Kidderminster College has an income of c. 9m per annum; and has made a surplus (excluding FRS17) every year since 2004/05. The college has net current 5

assets in excess of 2m and net assets in excess of 7m. It has c.100 cash days in hand, a current ratio of 3.0:1, and has regularly achieved annual cash inflows from operations. The college has adopted a longer-term strategy, utilising the Education Funding Agency (EFA) lagged learner number funding methodology, to grow its 16-18 funding allocation. As a result, the college forecasts to be close to break-even in 2013/14 and 2014/15. NCG is one of the largest and most financially robust education, training and employability organisations in the UK, with an annual income of almost 180m. In the year ended 31 July 2013 NCG generated a surplus of 7m and a surplus before depreciation and amortisation of 20.6m. At 31 July 2013, NCG had cash and short term investments of 57.6m and net assets (excluding pension liabilities) of 157m. NCG also had around 117 cash days in hand and in 2012/13 generated a net cash inflow from operating activities of 12.8m. NCG s financial health for the year ended 31 July 2012 was assessed as Good by the SFA and its financial health for the duration of the three-year plan, submitted in July 2013, was also assessed as Good by the SFA. The resultant organisation, following a merger between NCG and Kidderminster College, will be economically sustainable for the foreseeable future without any reliance on further mergers. Property Kidderminster College relocated to a new, purpose-built, town centre site in 2003 and has continued to invest in facilities for the benefit of learners and staff. It has subsequently successfully completed two 1m+ investments in 2011 and 2012 to create an extension, glass roofed atrium, and social and eating areas. A further 300k investment in the IT infrastructure and equipment began in summer 2013. The college also has an annual routine and planned maintenance budget together with an annual works programme. The Ofsted inspectors commented favourably during the 2013 inspection on the quality of the college s main campus accommodation. The college has also taken on the lease of additional facilities for motor vehicle work in Kidderminster from 1 August 2013, following the withdrawal of a subcontractor. NCG recognises that continual investment in estate and facilities is required in order to improve the learner experience and successfully compete for learners in the FE sector. Over the past ten years NCG has invested significantly in improving the estate and facilities of its divisions for the benefit of its learners and communities. As such NCG has a great reputation and significant experience of delivering large, multi-award winning buildings and capital projects to a very high standard, within budget and time constraints. NCG also has significant experience of successfully accessing capital grants in support of these projects and Kidderminster College will benefit from this experience / expertise in relation to any future investments in its estate. 6

NCG will work with the senior team at Kidderminster College to review the college s accommodation portfolio and develop a coherent and affordable property strategy. Kidderminster College will have the full support of NCG in the identification of growth opportunities and the development of viable business cases in support of investment. Governance and Management Under the merger proposal the name Kidderminster College will be retained and the college will form a new distinct operating unit of NCG. The unit will be known as Kidderminster College and will build its new reputation on the strengths of that brand loyalty. The college will have its own Principal who will report to the Chief Executive of NCG. This will enable Kidderminster College to maintain the authority of the college in its discussions with regional and local stakeholders. Through merger with NCG, the Principal of the new Kidderminster College will be supported by the experience and authority of a much larger organisation and all the skills and expertise that reside there. A Kidderminster College Advisory Committee will be established comprising employers, community interests, local authority, staff, students and other stakeholders to shape the strategy for the college, supported by the professional advice of the Principal. This strategy will be connected to NCG in two ways. Firstly, through the governance process of the merged college with a space on the governing body of NCG made available to a member of the Kidderminster College Advisory Council. Secondly, through the leadership role of the Principal of Kidderminster College as a senior manager of NCG. As is already the case in Newcastle College and West Lancashire College, the Principal of Kidderminster College will have the responsibilities of a senior operational manager and will be charged with developing and delivering effective relationships with learners, employers, partners and communities. Staffing The future success of Kidderminster College depends on the continuation of a staffing model which ensures efficient, high quality delivery and high levels of staff engagement. Staff and managers will be encouraged to access the comprehensive personal and professional development opportunities already in place at NCG and benefit from NCG s staff appraisal and development procedures and its Leadership Academy. Via enhanced IT links, staff will benefit from access to NCG s teaching and learning resources available online through NCG s intranet. Under TUPE arrangements, the staff of Kidderminster College will be transferred to NCG on their current terms and conditions. Staff will be fully involved in the merger process through an effective communications strategy. Arrangements for formal and informal consultation with trade union representatives will be put in place to ensure that a full range of staff views are assessed during the merger process. 7

Public Consultation The proposed merger has developed out of an open and transparent process. In September 2013 Kidderminster College published an Invitation to Express Interest. This document, which was agreed by the Corporation of the college, set out the rationale for a proposed merger and invited interested parties to make a proposal addressing a set of criteria, in a prescribed format. The closing date for responses was the end of October 2013. The proposals received were scored against the published criteria. The proposers were then invited to make a presentation to Kidderminster College and answer questions relating to their presentation and their written proposal. Following this process NCG was selected as the recommended potential merger partner and the decision to support this recommendation was unanimously endorsed by the Corporation of Kidderminster College. The two parties to the merger have continued the openness and transparency that has characterised the process thus far by carrying out a full public consultation. The consultation complied fully with statutory requirements for the proposed dissolution of FE college corporations, including the placement of statutory notices in the local and national press The Initial Outline Proposal (IOP) was made available to all relevant stakeholders, and made available publicly via the websites of both Kidderminster College and NCG All stakeholders were invited to respond to the consultation questions relating to the merger proposal Kidderminster College and NCG has published a summary of consultation responses received and, where relevant, has shared intentions to address the nature of the responses Kidderminster College will also consult separately with its recognised trade unions over the transfer of its employees to NCG, to meaningfully satisfy its obligations under TUPE In total there were 56 responses during the consultation period, with a further written response being received from the Worcestershire LEP six days after the end of the consultation. The LEP response is not included in the consultation statistics below. The responses can be broken down as follows. Online Survey 45 Paper based survey 8 Written Responses 3 Respondents to the survey were asked to describe their interest. The distribution of the 53 survey respondents who answered the question was: College staff (62%) Learner (10%) Local community (8%) College or training organisation (8%) Other (8%) 8

Local business (2%) Employer (2%) The 3 written responses were distributed as follows. Local government (1) Government agency/body (1) College or training organisation (1) There was a clear majority in support of the merger. Of the 46 survey respondents that answered the question 29 respondents (63%) said they supported it, a total of 10 respondents (22%) did not support it and 7 (15%) were not sure. All 3 written responses were supportive of the merger. Of the 56 responses overall, therefore, 65% were in favour. Support for the merger is further evidenced by the answers to the individual questions in the survey: 63 per cent supported the retention of a local identity, name and management 94 per cent supported the broadening and expanding the range of provision Two areas that are addressed further in this final merger proposal are that: 38 per cent thought that a group may be adversely impacted by the proposals (28 per cent did not) and 48 per cent supported the management/governance proposals (37 per cent did not) Support has been expressed by key organisational stakeholders such as the local council, the local colleges, the skills funding agency, and by key individuals such as the local Member of Parliament. The survey allowed respondents to add comments. This qualitative information, along with the quantitative information above, has informed the identification of the key messages below. These are addressed in this document. Specific response to the concerns around the impact on staff has been provided. This highlights the large groups of staff unaffected (all learner facing staff) and explains how the TUPE process will work. Explanation has been given of how this will be communicated to staff across the organisation and how they will be consulted. More clarity has been given on the nature of the local advisory board and the ways in which it will work to challenge performance and ensure that the College, as a Division of NCG, meets the needs of local stakeholders. Further detail of the financial implications of the merger for both parties has been included. The information in the IOP has been updated with any recent developments. 9

A clear description of the proposed shared services model has been included, including identification of the benefits this will bring for Kidderminster College NCG has also made clear its commitment to fully retaining resources and provision in the town, as well as identifying ways in which these will be further developed. The full report on the public consultation is available from the website of both organisations. Due Diligence Both parties have carried out due diligence studies on each other in parallel with the development of the initial outline proposal and the public consultation. NCG appointed UNW Chartered Accountants and Bond Dickinson Solicitors to undertake financial and legal due diligence respectively. Additionally Property, Health and Safety and IT due diligence was completed by the relevant internal NCG experts. The most significant issues raised were around ensuring Kidderminster Bank Loans are able to transfer and their covenants are not breached and that the dissolution does not cause the Local Government Pension Scheme (LGPS) pension liability to crystallise. Additionally it was recognised that Contract novations and gaining appropriate consents to proceed with the merger are key. A further significant risk was identified around the poor condition of the Kidderminster Motor Vehicle Centre, an issue that had previously been recognised by the college itself and highlighted by Ofsted. A number of other less significant issues were also identified. Discussions with both the bank and the relevant pension authorities have been undertaken and plans are in place to ensure the first two risks are mitigated. A comprehensive action plan has been created to follow up on all the issues. Kidderminster College appointed Baker Tilly to undertake a limited scope due diligence on NCG. They were able to report that there were no significant issues and highlighted a number of areas for further discussion including funding and the potential impact on Kidderminster of future funding reductions, including the continued investment in facilities, NCG s recent loss of a DWP contract and a potential litigation issue. Delivering the Merger The experiences of NCG s successful merger with West Lancashire College and the integration of Rathbone Training into NCG will inform the process of merger between NCG and Kidderminster College. A Merger Project Team has been established comprising of staff from NCG and Kidderminster College to plan and deliver the merger, ensuring high levels of participation from the people who will go on to lead and develop the new Kidderminster College as a division of NCG. The process is being overseen by a Merger Project Board comprising empowered governors and leaders from both organisations. 10

3. BACKGROUND AND THE CASE FOR MERGER Kidderminster College is a small and successful general further education college. It enjoys good success rates and sound finances. It operates at the heart of its community, in Kidderminster and the Wyre Forest, and enjoys a high reputation for the quality of its provision. It is an ambitious and forward-thinking organisation, and in early 2013 recognised that it needed to be part of a larger whole, with the right partner(s), to best realise its ambitions for the communities it serves. The college conducted a careful and thorough strategic review, and concluded that there were two key options for its future continued independence or merger with the right partner. The college, given the quality of its provision and its financial strength, could without difficulty continue as an independent organisation. It has actively chosen, however, to pursue a suitable merger, as the best means, in the current and anticipated environment, to further the ambitions it has for those it serves. Following its announcement in June 2013 of its intention to seek a suitable merger partner Kidderminster College conducted an open and transparent process to identify the best partner. This was achieved by publishing in mid-september 2013 an Invitation to Express Interest (IEI) prospectus and inviting bids from suitable organisations. The IEI identified and made public fourteen key criteria that potential partners should meet: 1. Combined annual income of a scale that enables any resultant merged organisation to be economically sustainable without further mergers 2. Retention of the Kidderminster College brand and identity 3. Most recent Ofsted overall grading or equivalent of merger partner(s) no less than satisfactory 4. Merger partner(s) has/have not been in receipt of a notice to improve or notice of concern or equivalent in the previous twelve months 5. Most recent financial health rating of merger partner(s) no less than Good 6. Firm and quantified commitment to investment in Kidderminster College estate and facilities 7. That the potential merger partner(s) curriculum and geographical offer(s) align(s) with Kidderminster College s current offer and ambitions 8. That the potential merger partner(s) curriculum and geographical offers align(s) with the ambitions of both the Worcestershire and the Greater Birmingham and Solihull LEPs 9. Avoidance of compulsory redundancies as a direct result of the merger 10. An agreed number of seats on the board of the merged organisation for Kidderminster College governors 11. Appropriate roles for Kidderminster College principal and senior management team members in the merged organisation 12. A culture in line with the Kidderminster College values 13. An enhanced experience for learners 14. An enhanced experience for staff 11

NCG submitted a full proposal to Kidderminster College at the end of October 2013 and were invited to a formal presentation at the end of November. Other shortlisted potential partners were considered in the same way. On 12 December 2013 Kidderminster College s Corporation identified NCG as its preferred partner for merger, with the aim of the colleges formally and legally coming together on 1 August 2014. This document therefore constitutes NCG and Kidderminster College s initial outline proposal and has been written with due regard to key documents and guidance regarding delivery models and mergers in the FE sector, specifically the Department for Business Innovation and Skills (DBIS) publication New Challenges, New Choices and the Further Education Minister s letter of 13 February 2013. This proposal also seeks to demonstrate how merger with NCG will drive up quality and standards, complement the existing curriculum provision and enhance the employability and up-skilling of the communities served by Kidderminster College. In the Minister s letter four critical factors were identified that must be accounted for when FE corporations are looking to review their operating models to forge potentially new or different futures. i) Accountability to local communities is expected to be a key driver of any change, starting with an assessment of needs and a College Structure and Prospects Appraisal. Kidderminster College have carried out a full College Structure and Prospects Appraisal culminating in a report to their Corporation on 28 March 2013. This covered potential structural models and fully considered accountability to the local community. ii) iii) Consultation should be undertaken widely and transparently on the proposals with local stakeholders, including the LEP, Local Authorities and Funding Agencies. From the beginning of its strategic options review and throughout the whole process of determining its future direction and seeking a suitable merger partner, Kidderminster College has had regular contact with key local stakeholders. The Worcestershire and Greater Birmingham and Solihull LEPs have been kept fully informed through updates from the Principal. The local authorities, both county and district Councils, have been consulted and kept informed at all stages. Both key funding agencies EFA and SFA have been fully involved throughout. The college has received strong support both for the transparent approach it has taken and for the resulting proposal to pursue merger with NCG. Any actions to secure new partners or change delivery model should be through open and competitive processes which will allow the best possible solution to be identified to meet local needs. 12

The identification of a preferred partner was carried out through a rigorous, open and competitive tendering process and a thorough evaluation of proposals against a set of published criteria agreed by the Kidderminster College Corporation. iv) Finally, there should be a formal consultation before the ultimate decision is taken. A full public consultation has been carried out ending on 21 March 2014. This has given an opportunity for staff, students, members of the public and local stakeholders to feed back their views either in writing or online. The outcomes of the consultation have been published and shared with key stakeholders. Overall the consultation outcomes showed a large majority in favour of the proposed merger. Comments from the consultation have been analysed and have been addressed in this document. 13

4. THE GEOGRAPHIC AREA IMPACTED BY MERGER It is not anticipated that there will be any impact on NCG operations or activity outside of the West Midlands region. The current divisional structure of NCG means that the only potential impact will be on the Group Services that are currently located in Newcastle. There is also no anticipated impact on the education services that NCG delivers in either the North East, North West or via the national contracts in Intraining or Rathbone. This section will therefore focus on the West Midlands region alone. Geography and Demography Kidderminster College primarily serves a population of approximately 98,000 people living in the main Wyre Forest towns of Kidderminster, Stourport and Bewdley and the surrounding villages. The population of Worcestershire overall has grown almost 9% since 1991. It is forecast to increase a further 9% in the next twenty years. This population is however ageing, with the proportion of over 65s forecast to grow significantly. In the Wyre Forest the number of children has declined by 7% (1,400) since 2001. Similarly the number aged 18-64 has decreased by 1,100. In contrast, the number of people aged 65-plus has increased by 3,600 or 22% over the same time period. This has implications for Health and Social Care sectors over the next two decades. Wyre Forest census figures show the district has had the smallest population increase in the county: just 1.1% over the last decade. It is projected to increase to 101,600 by 2021 (from 98,000) an increase of 3,500 (almost 4%). Economy and the Labour Market The Wyre Forest area has traditionally been associated with the carpet industry and there are still strong community links between Kidderminster and carpet making. Production, new techniques and imports from abroad however have had a negative impact. At the height of the town s factory output, some 20,000 people were employed in the manufacture of carpets; today the figure is less than a tenth of that. This serves to highlight the scale of challenges that has faced the local communities Kidderminster College serves. The area is now developing a more diverse economy in response to demands of the adjacent West Midlands travel to work conurbation, which is easily accessible by rail or car. The concept of North Worcestershire as an integrated economic area has grown in importance with the three local authorities (Bromsgrove, Redditch and Wyre Forest) merging their regeneration resources. Wyre Forest District Council has taken the decision to participate in both the following Local Enterprise Partnerships: 14

The Greater Birmingham and Solihull Local Enterprise Partnership (GBSLEP) is one of the largest in the country, covering a population of over two million and 840,000 jobs. It has ambitions to increase GVA by 30% by 2020, create 100,000 private sector jobs, stimulate business growth and profitability, boost inward investment and achieve global leadership in key sectors. Birmingham itself is a leading European business and tourist destination with a growing reputation as a place to do business on an international level. Being centrally based in the UK and at the heart of the motorway network brings 90% of the UK within a four hour travel time. Air, road and rail provide a gateway to 400 million people across Europe. According to the Ernst and Young s annual European Attractiveness Survey, which ranks the appeal of locations for foreign direct investors, the Midlands is the most attractive destination for inward investment projects outside of London, with an increase of more than 35% on 2010 figures. The city and surrounding region is home to 75,000 companies, including almost 1,190 international firms. The GBSLEP is primarily, although not exclusively, focussing on supporting the Automotive Assembly, Low Carbon Research and Development, Business and Professional Services, Financial Services, Clinical Trials and Creative and Digital sectors. Research by GBSLEP has also shown that, despite current economic challenges, there is a group of dynamic small firms that are thriving and attracting inward investment such as Higher Value Added Advanced Manufacturing, Transport, Environmental and Medical Technologies, Financial and Business Services and Transport and Logistics. The Worcestershire Local Enterprise Partnership (WLEP) has ambitions to halt the decline in Worcestershire GVA, create 5,000 jobs and stimulate 750m worth of private sector investment in Worcestershire businesses by 2017. Traditional trading and cultural links will provide the basis for collaboration with neighbouring LEPs to connect businesses, market sectors, peoples skills and abilities, communities and locations together to better set Worcestershire up to compete effectively in the UK and global marketplace. Priorities are skills and workforce planning, strengthening the relationship between education and business, and increasing employability. The WLEP is committed to working with partners to strengthen current skills provision and co-ordination to meet private sector needs. It is primarily, although not exclusively, focussing on supporting the Manufacturing, Defence and Cyber Security, Tourism, Horticultural and Food Production and the Environmental Technology/Low Carbon sectors. The Principal of Kidderminster College is a member of the North Worcestershire Employment and Skills Board, which brings together 15

representatives of both LEPs to address education and training needs across the North Worcestershire area. There will be continuing employment demand in all sectors and occupations over the next decade, including those that face decline in overall employment terms, because of the need to replace staff lost through turnover and retirement. This is a particular issue in sectors with an ageing workforce. The twin LEP approach has helped secure approval for the Kidderminster Business Park on the former sugar beet factory site (as well as about 200 hectares along Worcester Road and Stourport Road). The college is working with the district council to ensure that planning for skills is an integral part of the further development of the site. Skills Needs The coalition Government has outlined national skills priorities, and the following challenges for Kidderminster remain: Deliver high standards of learning and success for 16-19s Reduce the number of young people who are not in education, employment or training Support the needs of young people at risk, such as young offenders Ensure robust arrangements are in place for delivery of 14-19 vocational education Increase availability and take-up of apprenticeship opportunities, and introduce traineeships Eliminate poor quality provision and ensure continuous improvement Ensure high-quality learning opportunities are available for LDD learners Strengthen social inclusion, address worklessness and support entry to the labour market Identify and address diverse community needs Encourage more progression to higher education The continuing challenge is to improve the qualifications and skill levels of the local population, driving economic competitiveness and making a real difference to the people who live and work in the area. The priorities set out above demand a strong and vibrant college in Kidderminster that is capable of working in partnership with its local schools to deliver to learners of all ages across the local area. Kidderminster College Activity in the Region Kidderminster College is the main provider of vocational education and training in Wyre Forest. It has an overall income of 9.2m and the college offers provision in 14 subject sector areas (SSA), although provision in some of these areas is extremely small. The college has particular vocational specialisms in Creative Industries and Technology, Hairdressing, Beauty and Holistic Therapies, Care, Support, Public Services and programmes for learners with learning difficulties and disabilities (LLDD). It has recently acquired Motor Vehicle provision which 16

was previously delivered in partnership with a charitable organisation. The college enjoys a high reputation for its work in Music and Creative Industries and delivers some of its programmes in these areas at centres across the Midlands and the North of England. The college recruits up around 4,500 learners each year, of whom around 1,300 follow full-time programmes. The college has contracts with the Education Funding Agency for its work with 16-18 year olds, and with the Skills Funding Agency for work with adults and for the delivery of Apprenticeships for 16-18 year olds. The college enrols around 4,500 learners annually. The Funding Agency (EFA) and Skills Funding Agency (SFA) fund most provision and the remainder is funded through indirect HE provision, tuition fees and other income-generating activities. EFA and SFA Provision by Age and Mode in 2012-13 Total number of learners 16-18 16-18 % 19+ 19+% Total Total % Full-Time 825 18.8% 465 10.6% 1,290 29.4% Part-Time 471 10.8% 2,622 59.8% 3,093 70.6% Total 1,296 29.6% 3,087 70.4% 4,383 100.0% Most full-time and a large proportion of part-time courses are delivered at the main town centre site. Increasingly, diverse provision is also offered at a range of centres across the district. There is close collaboration with local employers, and partners deliver Apprenticeships, workplace learning and tailored training. Collaboration with the Emily Jordan Foundation provides supported employment opportunities and land-based studies programmes are provided at Brinton Park in partnership with Wyre Forest District Council. In addition to delivery on the main site, the college has a range of outreach provision in local community centres in Kidderminster and several villages in the Wyre Forest. Skills for Life provision for adults is well developed, although the number of learners studying English for Speakers of Other Languages (ESOL) has fallen back considerably from its peak in 2006-07. By collaborating with local schools, IT provision continues to be offered in a number of communities and through laptop initiatives which take IT training into areas where participation is traditionally low. The college also offers a successful programme of full cost recreational courses. The college offers a small number of higher education programmes, both in partnership with the University of Worcester and in its own right. 17

NCG Activity in the Region Current NCG brands operating within the Region include both Intraining and Rathbone. Intraining has offices in central Birmingham, Kings Heath, Dudley and Wolverhampton, delivering the following programmes: DWP Work Programme for Birmingham and the Black Country a prime contract, delivered in partnership with an extensive supply chain of providers. SFA Skills Support for Unemployed Birmingham and the Black Country SFA Skills Support for Redundancy a regional support contract for those at risk of redundancy across the West Midlands SFA Skills Support for the Workforce delivering on behalf of the Birmingham LEP and SFA to up-skill the workforce of SMEs Apprenticeships - all ages, with a focus on the Service Sectors 16-18 Study Programmes following successful bid for the Birmingham Gap provision contract in 2012 Adult Employability Skills Rathbone Training has offices in Birmingham, Walsall, Coventry and Wolverhampton, delivering the following activity: 16-18 Study Programmes Apprenticeships - for those aged 16-24 with a focus on the Service, Voluntary and Fair Train Sectors Military Preparation courses Each Division of NCG retains its distinct character and position in the marketplace. This is determined by geography, core business markets and funding streams. In terms of curriculum and location of operation, suitable arrangements are made to avoid overlap of provision between NCG Divisions. A similar arrangement will be agreed with Kidderminster College. On initial review there does not appear to be a significant overlap with any current NCG activity. Therefore Kidderminster College is well placed to further develop and expand its provision, complete with the full support of NCG. 18

Individual brand identity will remain across Kidderminster College, Intraining and Rathbone Training, as each division operates within clearly defined and differentiated markets. NCG will seek to maximise synergies and create progression pathways wherever possible to benefit Kidderminster College, its learners and community. For example, Rathbone Training works closely to engage disadvantaged young people who have often dropped out of the education system and develops them to progress to college or an apprenticeship. Rathbone learners will be able to progress on to suitable courses at Kidderminster College, providing seamless transition and progression opportunities. Education in Kidderminster and the Wyre Forest Wyre Forest and Hagley are served by seven 11-18 high schools, all of which are members of the ContinU Trust. The Trust was originally created to run the new diploma provision under the last government. It has now assisted with the conversion of four schools to become academies. The Kidderminster College Principal is one of the Trust Directors along with representatives from Barnados and the Universities of Birmingham and Wolverhampton. The ContinU Trust has a mission, through a commitment to collective responsibility, to provide a rich, varied and high quality learning experience for all young people in all its institutions. The aim of ContinU is therefore to work collectively to retain and recruit learners in provision within the Wyre Forest area. Many learners from the schools progress to Kidderminster College at age 16. It is intended that, following the merger, Kidderminster College will remain a member of the ContinU Trust and that the Principal of Kidderminster College will remain as a Director of the Trust. The merged college will be committed to maintaining the existing strong partnerships with local schools. 19

The 11-18 high schools are: King Charles I School Baxter College The Stourport High School and VI From Centre The Bewdley School and Sixth Form Centre Wolverley CE Secondary School Haybridge High School Hagley Catholic High School In addition to the 11-18 high schools, the district has a special school for learners with complex needs, for which a new site is currently under construction, and a 0-18 independent school which is in the process of converting to becoming a free school. The ContinU Trust, comprising the college, the high schools and other partners, has also established an alternative provider free school the ContinU Plus Academy to provide alternative and inclusive education for 11-16 pupils at risk of exclusion. Since 2012, through its Academy at Kidderminster, Birmingham Metropolitan College has also offered a limited range of vocational courses in the town. 20

5. KIDDERMINSTER COLLEGE Kidderminster College s Funding In 2012-13 Kidderminster College had a total income of 9 million, including 8 million from the EFA and SFA. This funded the delivery of education and training to 4,500 learners. Kidderminster College has an SFA Good financial health assessment based on the audited financial statements for 2012-2013 and for the two-year financial plan for the period ending July 2015. The surplus for 2012-2013 was 147k. The college has delivered regular surpluses over many years which have enabled the investment of over 2 million since 2011 in developing the estate for the benefit of learners and staff. Kidderminster College s People Kidderminster College employs 307 staff. Staff are supported to work with the core values which include treating everyone with respect and fairness, supporting and valuing each other, encouraging everyone to fulfil their potential and putting learners and local community first. These values are achieved by working closely with managers, trade unions and staff within a framework which enables Kidderminster College to recruit, retain and engage a workforce with the skills and commitment to deliver a high quality service. Departments are regularly reviewed to ensure that they continue to be responsive to internal and external demands. The college s recently created bank of parttime hourly paid lecturers and learner support practitioners ensures that there are appropriate resources to respond to immediate and future recruitment needs. Kidderminster College provides a wide range of opportunities for all staff to undertake continuing professional and personal development. Currently 66% of academic staff in a teaching role are qualified or part qualified and a significant number of staff are currently undertaking PTLLS, DTLLS or PCGE. As part of induction new academic staff, if appropriate, are enrolled on courses to gain relevant qualifications and progress is monitored during their probationary period. Kidderminster College has a range of online resources to support staff development across the college. Development needs are initially identified during new staff induction and followed up with various options which include but are not limited to: dedicated staff development days, external courses and conferences, group and individual projects, shadowing colleagues, sharing good practice and close involvement in designing new and updating existing courses of the curriculum. The college communicates regularly with staff and encourages open and honest communication. Kidderminster College fully consults with the recognised unions on matters affecting staff and their employment. 21

The college works closely with employers, schools and the wider community to further develop effective and sustainable partnerships which improve outcomes for learners. Staff are actively encouraged to share good practice and information so that they work together more effectively and efficiently. Kidderminster College s Quality Kidderminster College has achieved sustained improvement in success rates in recent years. In 2012-2013, the college s headline success rate of 89% places it in the top 25% of colleges nationally and its success rate for long qualifications, at 84.3% is above the national average. Despite this good performance and improving trend, the college was inspected by Ofsted in November 2012 and October 2013 and was graded as Requires Improvement on both occasions, due largely to inconsistencies in performance between departments. The individual curriculum areas were graded as follows: Subject Area Grade November 2012 Visual and performing arts 2 Adult literacy and numeracy 2 Employer responsive 2 October 2013 Health, Social Care 3 Early Years and Play Work 3 Hairdressing and Beauty Therapy 3 Public Services 2 Sport 2 Foundation English 3 The Ofsted inspection in 2013 identified the following as key strengths of the college: Overall learner responsive success rates are good High attendance and good attitudes to learning shown by learners Good care and support for vulnerable learners and those with identified learning needs High success rates for learners aged 14-16 and adults on college-based courses A well-maintained main campus which has been developed well to enhance learners experience Enthusiastic, friendly and supportive staff who are highly valued by learners Good promotion of equality and diversity Well-developed partnerships which benefit learners Financial management and planning are very good Strong arrangements for Safeguarding 22

6. NCG NCG s Structure and Curriculum Offer In 2013 the Corporation of Newcastle College formally adopted its trading name NCG as the new name of the Corporation. NCG has evolved over several years through a process of growth, merger and acquisition, into one of the largest providers of high quality education, training, employability and work-based learning solutions in the UK. There are currently five divisions of NCG: Newcastle College, West Lancashire College, Intraining, Rathbone Training and Newcastle Sixth Form College. NCG is recognised for its strong leadership and management, excellent governance, and is a sector leader in respect of its financial performance. It has a first rate reputation regionally and nationally, and a commitment to the highest standards of delivery. The growth of Newcastle College to become one of the largest and most successful further and higher education colleges in the country provided the foundation for the development of NCG. Following a successful merger in 2007 with Skelmersdale and Ormskirk College (now West Lancashire College), a smaller, failing college in West Lancashire, NCG acquired TWL, a private training provider also based in West Lancashire. This was followed in 2008 by the acquisition of a substantial part of Carter and Carter plc, which had gone into administration. In 2011-12 NCG acquired Rathbone Training, a youth charity specialising in delivery to disengaged 14-23 year olds. Since then expansion has been through the successful tendering for and implementation of national contracts in the welfare to work and skills sectors. Finally, in 2012 NCG split off the A-level provision in Newcastle College to create a fifth division in a state of the art new building Newcastle Sixth Form College. The five divisions operate from over one hundred locations throughout the UK with their main activities as follows: Newcastle College is a further and higher education college based in Newcastle upon Tyne. The college is led by the Principal and Senior Management Team. It has a main campus at Rye Hill and operates a number of Specialist Skills Academies around the city. It has a turnover of around 65 million and offers a wide range of high quality academic and vocational courses ranging from entry level to post-graduate qualifications. Newcastle College is the largest HE provider in FE and one of the UK s largest FE providers. West Lancashire College is a further education college based in Skelmersdale which offers some higher education courses. The college is led by the Principal and Senior Management Team. Whilst provision primarily ranges from Levels 1-3, provision is also offered at Entry Level and at Levels 4 and 5. West Lancashire College offers a number of 23

programmes specifically designed to meet the needs of disadvantaged and disengaged learners (the NEET group) and discrete courses for students with learning difficulties and/or disabilities. At the same time, supported by NCG, WLC offers Foundation Degrees in Computing, Business Information Systems, Sport Rehabilitation, Children and Young Persons and in Social Care. The Intraining Group Ltd is a wholly owned subsidiary company with its head office in Sheffield. It delivers a wide range of skills and employability programmes throughout the UK. It operates through three operational units which cover Employment Related Services (ERS), Workforce Development and National Accounts. Intraining is led by a Managing Director and Senior Management Team. o ERS operates out of thirty locations from Blackpool in the North to Luton in the South including delivery of prime contracts on the DWP Work Programme in Birmingham and North East, Yorkshire and Humber. Alongside this ERS runs numerous complimentary contracts from a range of funders both direct and sub-contracted; these include DWP, SFA and ESF. o Workforce Development delivers a range of Apprenticeships and workbased learning to employers through national SFA contracts. It also operates a number of skills centres offering 16-18 study programmes. In addition there is a small amount of commercial income generated by delivery of bespoke training courses to a number of customers. o The National Accounts division has been created following the successful bid for delivery of Apprenticeships with Wm Morrison Stores. Rathbone is a UK-wide voluntary youth sector organisation and registered charity which merged with NCG in January 2012. It has a turnover of around 33m and works primarily with 14-24 year olds currently not in education, employment and training (NEETS). Rathbone creates lifechanging opportunities for thousands of young people at risk of long-term social and economic exclusion by engaging or re-engaging them in learning. Current developments include developing new and improved services for customers. Newcastle Sixth Form College is a purpose built sixth form college which offers an academic and pastoral experience to young people. It delivers AS and A-levels to young people whose aim is to go to university or Level 3 employment. This is the first dedicated sixth form college in the city and aims to be the leading deliverer of A-levels in the North East. 24

Each of the NCG divisions has its own character and position in the marketplace, determined by geography, core business, markets and funding streams. NCG s Head Office and Shared Services operations are based in Newcastle upon Tyne. Group Services provides the overview and specialist support across the divisions in areas such as Human Resources, Finance, IT, MIS, Estates, Quality, Business Development, Health and Safety, e-learning, financial modelling for bids and mergers and acquisitions, Safeguarding and Child Protection. Back office transactional support services are provided centrally to all divisions through Group Shared Services, including Accounts Payable, Accounts Receivable, Payroll and HR Administration. NCG Group services provide back office support to the 100+ operating sites across the UK. NCG s Funding NCG holds contracts with most of the UK s education funding bodies. In 2012-13 this included: A contract of 55.4m with the Education Funding Agency (EFA) for delivery to young people A contract of 53m with the Skills Funding Agency (SFA) for delivery to adults on a variety of classroom, apprenticeship and ESF skills support programmes Higher education income from the Higher Education Funding Council (HEFCE) and Student Loans Company (SLC) of 18.4m Delivery of two Work Programme prime contracts for the Department for Work and Pensions (DWP) with income to the value of 18.2m Contracts with the devolved authorities in Scotland and Wales of 8.5m In March 2014 NCG was informed by DWP that it would withdraw the contract to deliver the Work Programme in North East Yorkshire & Humber in March 2015. This was based on the poor contract performance in the first two years of operation. There will be a minor impact on surplus for NCG in 2015-16. NCG has committed to running the contract to the highest standards in the final year before handover and the contract is already in the top half of the performance league tables for year 3. NCG s People NCG employs around 3,500 staff. A key objective in implementing the NCG mission is to fully value and involve staff. NCG achieves this by working closely with managers, trade unions and staff within a framework which enables NCG to employ, deploy, develop and retain staff with the required skills, knowledge, qualifications, experience and competencies in the right place, at the right time, and at the right cost. 25

Structures are regularly reviewed to ensure that they continue to be responsive to internal and external demands and that the workforce is positioned to respond to current and future needs. NCG actively supports staff to attain professionally qualified status. Currently 80% of staff identified as being in a teaching role are either qualified or part qualified. The remainder are enrolled on relevant courses to become qualified or enhance their current status. Figures are monitored on a monthly basis. NCG has a range of online resources to support staff development across the Group. The Group s intranet contains resources on a range of teaching and links to other sites. This complements the e-learning strategy which aims to enhance the use and provision of IT-related applications and activities in all schools. Staff are offered blended learning training in the way in which ILT can support learning and the necessary skills to make this possible. NCG launched its Leadership Academy in 2011. The Academy is a unique, flagship development tailored to meet the specific needs of NCG s leadership teams, which will further promote excellence in leadership and management across the Group. Over 300 managers at all levels throughout the organisation are participating in the leadership programme which is delivered in key locations nationwide. It offers managers the opportunity to develop their leadership and management skills, share best practice and ensure they are well equipped to respond to the challenges that lie ahead of us over the next few years. In 2013 NCG undertook the Great Place to Work employee survey and is committed to engaging with staff fully on the outcomes of this major piece of work. NCG communicates regularly with staff via a variety of channels and full consultation takes place with the recognised trade unions on matters affecting staff and their employment. NCG s Quality NCG has achieved excellent growth and quality improvement between 2000 and 2014 and is one of the top performing providers of education and training in the UK. The success rates of its further education learners have improved from 43% in 1999-2000 to 85% in 2012-2013. The colleges retain over 90% of their learners. Teaching, training and learning are very good and significantly better than the national picture in all curriculum areas. Ofsted judged that NCG s quality assurance arrangements are sophisticated and rigorous. In 2008, inspectors observed that the merger with West Lancashire College had been managed exceptionally well, and that there had been rapid improvements in the quality of provision offered. NCG was last inspected in May 2012 under the revised Common Inspection Framework and was graded Good for Overall Effectiveness of Provision, Outcomes for Learners, Quality of Provision, Leadership and Management and Equality and Diversity; and Outstanding for Safeguarding. 26

Subject Area Grade Health, Social Care and Early Years (work-based) 2 Hairdressing and Beauty Therapy (college-based) 2 Visual Arts (college-based) 1 Literacy (college-based) 1 Business Administration (work-based) 2 Business Administration and Law (college-based) 2 Ofsted acknowledges that NCG s leaders are extremely ambitious for the organisation and that its clear vision has led to a rapid and successful expansion of NCG in a relatively short period of time. They confirm that management structures created by NCG have ensured that the different Divisions focus well on ensuring that learners succeed. Through these robust structures NCG provides good quality education and training both in its Colleges and through Intraining. This allows NCG to help realise its mission and vision with Ofsted noting The organisation makes a significant contribution to improving the life chances of a large number of young people and adult learners, both in the communities served by the Colleges and nationally. Further quality indicators include: Centre for Excellence in Teacher Training AoC Beacon Awards Matrix Excellence Awards Ofsted Best Practice Surveys Ofsted Twelve Outstanding Providers of Work based Learning (July 2010) Quality Assurance Agency for Higher Education Confidence judgements NCG rigorously monitors performance at Quarterly Quality Reviews and through monthly SMT reports. Through previous mergers, acquisitions and contract wins, NCG has continually adapted the scope of the quality system to ensure that it continues to meet the needs of all users. NCG operates through a data rich environment in which decision-making at all levels is informed by robust data. The NCG performance hub provides strategic development of management information and drives planning and performance across NCG, and ensures clear and consistent reporting and compliance with appropriate access to information for staff. Experience of Managing Transformational Change In 2000, following the appointment of a new principal, the Newcastle College Corporation agreed a phased transformational plan to create a world class beacon college. In particular, the college recognised the need to improve significantly its financial performance and data management whilst at the same time re-engineering provision to deliver growth and respond to the government agenda. Since then, every area of NCG has been engaged in a dynamic and 27

challenging programme of change in which growth and financial success have gone hand in hand with a commitment to staff and student engagement, continuous improvement and excellence. The success of the transformational change programme at Newcastle College led the way for the phased transformational change programme produced for West Lancashire College (WLC) in 2007 and Intraining in 2008. The challenging programme of change which transformed WLC in a twelve month timeframe was confirmed by Ofsted inspectors in 2008 when Newcastle College and WLC were judged to be Outstanding. In 2009 following a challenging18 month programme of change Intraining was judged to be Ofsted Outstanding. In 2010 NCG was awarded Beacon status. NCG promotes a culture which values achievement, action, personal accountability and ownership. Resources are delegated to divisions and services and performance is closely monitored and reviewed through a highly effective annual cycle of business planning and performance monitoring, linked to quality review. Within this context, governors and the Executive Team have set ambitious targets which have been consistently met, and in many cases exceeded, in terms of student numbers, quality and financial performance. 28

7. BENEFITS AND OBJECTIVES OF MERGER The strategic review conducted by Kidderminster College concluded that a merger with a strong and suitable partner was the preferred option for future development. A merger with NCG would successfully fulfil this ambition, allowing the college to retain its own brand, identity and presence in the local area. The proposal is that Kidderminster College will become the sixth division of NCG, and will operate with a high degree of agreed autonomy within the NCG structure. It will retain its full local identity, current sites and provision with local leadership provided by the Principal and Senior Management Team. The objectives for Kidderminster College will be to continue its existing ambitious plans for growth and continuous improvement by: Developmental Improvements Build on the current good financial position. Continue staff focus on the core business of teaching and learning. Work with the senior team to review the accommodation portfolio to develop a coherent and affordable property strategy. Utilise NCG s capacity in IT and e-learning to extend access and improve quality. Utilise NCG s shared services model to provide effective back-office support. Share good practice, curriculum and quality Learning Improvements Create a single integrated learning offer for adults from Foundation Level to Level 7 including employability programmes. Strengthen the range and accessibility of vocational learning for young people to support the economic regeneration of the area and improve the career prospects of learners. Support progression routes to HE and higher skills through deployment of NCG Foundation Degree Awarding Powers at an appropriate future point Stakeholder Improvements Engage constructively with business to meet its needs and build reputation. Assist local authorities with their imperative to drive up educational standards at all levels. Meet the needs of the wider region in key specialist areas. Benefit from the activity and contracts of other NCG divisions operating in the wider West Midlands region. Build on, and seek to enhance, the college s current Corporate and Social Responsibility activities 29

Creating the Kidderminster College of the Future The partnership with NCG will provide an excellent platform to deliver stability and future growth for Kidderminster College. The NCG mission, to develop people through learning and achievement for the benefit of themselves, society and the economy aligns extremely well with Kidderminster College s core values and clear mission focused on Excellence, Equality and Engagement. Underpinning the NCG mission are six core values against which the current NCG business objectives and operational processes have been aligned. These are: put the needs of the learner and customer first innovate and support excellence in learning and employability promote diversity and social mobility value, involve and invest in our staff foster strong relationships with employers, partners and communities secure our future through strategic investment and profitability The achievements of NCG over the last decade have been secured through delivering these objectives and a similar focus will be applied to the work to take Kidderminster College on the next phase of its development. The behaviours outlined in the mission and objectives are actively promoted throughout NCG and form the content of the Leadership Academy programme which specifically supports the development needs of all NCG managers. To further reinforce shared values, the Leadership Academy also includes a specific module on equality, diversity and inclusion to give managers the tools to actively promote and value diversity and overcome bias. In addition, NCG s values align well to Kidderminster College s community engagement activities of listening and responding to the needs of stakeholders in the local community. NCG has a rigorous corporate social responsibility programme operating across the divisions, through which all divisions express their passion for the impact made by their learners. Both learners and staff are active members of their local communities. Furthermore, NCG assesses any changes and developments against its core values and many examples have been highlighted during Ofsted inspections: An empowering culture, which continues to raise aspirations amongst learners, staff and key partners. This has supported the expansion of participation amongst high-priority, hard-to-reach groups including 16-24 NEETS and unemployed adults. Progress of learners supported by investment in student support schemes. 30

Innovative and high quality teaching and learning further enhanced by the introduction on a substantial scale of sector-leading e-learning provision. A very inclusive and learner focused environment with many new developments in learner support. Investment in excellent buildings and resources. A high commitment to community regeneration and growth. A culture that shares and cross-fertilises best practice across the group. Supporting and Developing the Core Values of Kidderminster College A merger with NCG will enable Kidderminster College to operate in a recognisable environment of shared values and common ambitions. The successful merger between Newcastle College and West Lancashire College was also underpinned by shared values and common ambitions. The merger enabled rapid improvement in the quality of provision and significantly improved the image and profile of the college. Since the merger the college has gone from strength to strength. Kidderminster College has a very good record of investment, in both its estate and its teaching and learning facilities. This is complemented by NCG s track record of investing in excellent resources and facilities that reflect the highest industry standards. Shared values and common ambitions, complete with relevant investment, will make a significant contribution to raising the aspirations of learners, staff and the communities Kidderminster College serve. Kidderminster College will be supported by NCG s extremely ambitious leaders to further develop the core values of the college by ensuring provision is focused strongly on meeting identified local, regional and national priorities and is developed using an extensive range of information, data and best practice, including a thorough analysis of learners and employers needs. For learners, high progression rates both within NCG and to employment or higher education significantly enhance their future prospects, encouraging all learners to fulfil their potential. NCG has established many strong and effective partnerships with employers, other public sector agencies, and community groups that provide clear benefits to current learners and underpin successful initiatives to widen participation. These partnerships and links will be extended to Kidderminster College to ensure learners benefit and local community needs are fully met. Putting the Needs of the Learner and Customer First NCG has a strong track record of creating a high quality curriculum and learning experience that reflects the local community. NCG has invested in facilities in specific response to changing demands of employers including the Aviation Academy at Newcastle International Airport, the Energy Academy, a Health Care simulation environment and the Chef s Academy. These experiences and lessons 31

will be used to develop a range of opportunities for Kidderminster College s learners. Kidderminster College, with the assistance of NCG, will carry out a full and detailed analysis of the curriculum to map provision to the local economy and build on the existing strengths of the Kidderminster College offer. NCG will then work with Kidderminster College to identify links with partners and stakeholders that can be exploited to complement and add to the existing curriculum. The curriculum will be mapped to LEP priorities and to current and future labour market needs to ensure that a sustainable offer is created for Kidderminster and Wyre Forest learners and employers. This will also support Kidderminster College to realise its expansion and growth strategy and develop its provision in response to market need, broadening the range of opportunity for learners. It will help to create a broadened curriculum focusing on the skills areas identified as priorities and reflect the change in emphasis towards demand-led funding for adults in response to the skills needs of the individual and the employer. In summary this will be through: Supporting effective and productive partnerships with local schools to provide a structured vocational curriculum for 14-16 year olds. Increasing the participation rates for 16-18 year olds in vocational FE qualifications from Entry Level to Level 3 including those not in employment or education. Increasing the success rates for young people and adults on long courses to the upper quartile in terms of benchmarked performance. Introducing Traineeships and exploring opportunities for direct 14-16 recruitment that are currently not available in Kidderminster. Increasing participation and success rates of young people in Apprenticeships. Working in partnership with community groups, Jobcentre Plus and private training providers to reach the disadvantaged and engage more young people and adults in learning leading to employment. Collaborating with local schools and universities to increase participation rates in HE, particularly vocational Foundation Degrees. Working with Sector Skills Councils and other employer groups to create a responsive employer-led curriculum. Improving the basic skills of adults in English and maths. Developing the qualifications and capability of staff through CPD programmes. Teaching and learning and student achievement are clearly at the heart of the missions of both Kidderminster College and NCG. Personalised and tailored learning along with robust vocational pathways are embedded within the services offered by NCG. NCG will provide the supporting structures to enable 32

Kidderminster College learners to benefit from these including online individual learning plans. NCG s Online Development Team is currently developing and commissioning a wide range of resources to support the divisions of NCG and these will be made available to Kidderminster College. To match this, NCG s divisions are supported by a state of the art online learning environment with the latest online collaboration tools to support online teaching and learning, including Virtual Classrooms, Video Conferencing, Online Forums, Course Blogs and Wikis. These resources will enable a much wider range of Kidderminster College learners to access learning through the college in a way that is flexible to meet their needs. The supporting infrastructure will allow learners on programme to gain the support they require whilst working at a distance from campus. NCG is one of the sector s strongest providers of Higher Education (HE) in a FE institution with HEFCE grant funding to support over 50 Foundation Degrees and third year Honours top-ups. NCG has worked successfully with West Lancashire College to expand and develop its HE portfolio. This expertise will be used to support Kidderminster College to develop its HE portfolio to provide appropriate pathways that promote lifelong learning and employability and facilitate the participation of students that are currently under represented. Working in partnership with Kidderminster College, NCG will ensure that a key priority of the proposed merger will be to maintain continuity of learning and widen opportunities for learners. This will result in very little disruption to learners and in the first instance they will notice little difference to their experience at Kidderminster College. As the college starts to introduce some of the innovative NCG systems learners will be able to benefit from access to a much wider range of learning materials. Risk management analysis and robust merger implementation plans will also be developed at each stage of the merger to focus on any potential impact, complete with mitigating plans and actions. Innovating and Supporting Excellence in Learning and Employability Teaching and learning and student achievement must be at the heart of any college s mission. NCG has raised quality through focusing on teaching and learning processes, accompanied by investments in e-learning and other resources. Year on year, its success rates have improved, and so has the quality of its teaching and learning. Its investment in systems and processes over the last few years to raise standards will complement and support the existing expertise of Kidderminster College. NCG continues to make a significant investment in online content development to increase the accessibility of learning to an increasingly online learner community and to drive down the cost of delivering learning. Current investment is being targeted on the development of resources to support programmes for apprentices, higher education and the unemployed. These resources can be blended by the delivery teams with classroom-based content to provide a coherent programme to meet the needs of individual cohorts. 33

NCG offers a broad range of learning provision for young people and adults from Entry Level to Level 7 including employability programmes and the largest offer of Foundation Degrees in the UK. NCG has a significant breadth of expertise and has delivered the highest standards in the majority of sector subject areas currently offered at Kidderminster College and the areas into which it wishes to expand. NCG has the largest higher education provision of any college in England and is directly funded by HEFCE. It has Foundation Degree Awarding Powers (FDAP) and is currently undergoing assessment for Taught Degree Awarding Powers. NCG has established many strong and effective partnerships with employers, stakeholders, other public sector agencies and community groups that provide clear benefits to learners and underpin successful initiatives to widen participation. For example, there are links with 20,000 employers and close work with LEPs in key areas to support the development of provision that meets the needs of employers, learners and the local economy. NCG will be able to offer exceptional support to Kidderminster College across all curriculum areas and especially those Kidderminster College wish to develop including: Health and Social Care Newcastle College has over 1,200 learners with a curriculum offer that benefits from working with highly effective working relationships relating to Health and Social care. These include Skills for Health and Care, Care Awards, The Kings Fund, Alzheimer s Society, MacMillan, Community Integrated Care, Age UK and local authorities, among others. These relationships allow the college to address the needs of the sector by enhancing the vocational skills, knowledge and experience of learners which makes them ready for employment. The sector-based work academy provides opportunities for learners to gain recognised qualifications, undertake placements within the sector and be offered a guaranteed job interview on completion of their course. Hairdressing Newcastle College has large numbers attending this provision. Two salons operate as commercial real working environments that support FE, HE and apprenticeships. Hairdressing is delivered within the Lifestyle Academy that boasts excellent retention and success rates across the majority of provision. Achievement on Long Level 3 is in the top 10% across all provision, and 91% of learners progress to further study or employment. Motor Vehicle The School of Engineering and Science at Newcastle College has a curriculum offer for automotive from Foundation Level to Level 3. Provision is delivered in a dedicated automotive centre which is home to both classroom and workshop space. The curriculum is developed in consultation with employers to provide industry-standard training. This curriculum area is a keen participator in World Skills activities. Employability Skills NCG launched the Employment Gateway in 2011, utilising the expertise of Intraining, Newcastle College and West Lancashire College to provide unemployed people with the support to help them get back into work or 34

training. Intraining delivers the Work Skills Programme to thousands of individuals nationally, providing the unemployed with increased skills to enhance their chances of finding work through a series of innovative workshops and classroom activities. Music Production and Performance the Newcastle College Performance Academy is one of the best equipped music departments in the world, with stateof-the-art facilities including ten professional studios in two locations. The department works to recreate a music industry experience and musicians gain record label experience working with the professional Push Puzzle Records. Learners have opportunities to work in professional venues and their own radio station. There will be significant benefits to both organisations to link these strengths up to the innovative MAS Records provision at Kidderminster. The School of Creative Industries in which this curriculum sits enrolled over 3,300 learners across FE and HE in 2012-13. Team Leading and Management a broad portfolio of team leading and management courses is designed to help employees develop effective working relationships, manage resources and implement change. Programmes are offered from Level 2 apprenticeship frameworks to Level 7 MBA degrees. Horse Care Newcastle College works in partnership with a leading land-based college to offer a land based curriculum in Newcastle. A range of BHS courses from stage one to three are delivered. Teaching Assistants - The Newcastle School of Education (NSE) is one of only ten Centres for Excellence in Teacher Training (CETTs). NSE offers a range of teacher education programmes and has an excellent reputation. Promoting Diversity and Social Mobility NCG takes a pro-active approach to valuing diversity, meeting its duties under equality legislation and responding to legal developments in this area. NCG s Strategic Development Implementation Plan includes a key aim which is to Promote diversity and social mobility. This aim is underpinned by a series of objectives which are designed to meet current and incoming legislation and are as follows: Raise the awareness and skills of staff to promote fairness, equality and good relations Raise the awareness of learners to promote understanding and good relations between diverse groups Provide a hospitable and multi-cultural environment that welcomes, respects and protects diverse people Monitor learner representation and success and take action to promote equality Ensure that all learners achieve good outcomes, whatever their background Monitor representation amongst all staff types and take action to promote equality Consult and involve representative staff, learners and outside organisations 35

Embed the evaluation of equality impact evidence into policy development, business planning and quality assurance processes For all large contracts ensure that potential suppliers meet NCG s equal opportunities standards and requirements In line with current requirements, the Single Equality Scheme is in place and development underway for the next phase. This provides the basis for engagement with stakeholders, staff briefing and training and the specific duty to publish information relating to performance in the public sector Equality Duty. NCG s Annual Report contains relevant information relating to equal opportunities across the Group and governors are informed through the provision and publication of relevant data and the reporting of progress against the EO Plan with any associated action plans or targets for improvement. Kidderminster College will have its own history, and particular set of circumstances, and NCG will work sensitively with stakeholders to provide a way forward for the new Kidderminster College which will make it a national beacon for valuing diversity and social mobility. Valuing, Involving and Investing in our Staff NCG is wholly committed to meeting the training and development needs of staff. The experience for learners and the development of staff are at the heart of the work that NCG carries out. Ofsted (2012) noted the commitment to this, recognising The very broad range of staff training focuses suitably on improving the quality of teaching and learning. The sharing of good practice across NCG is also a major strength. Collaborative working across divisions and through mutual curriculum staff groups is productive in developing people and the adoption and embedding of key business processes, whilst fostering close working relationships across NCG. Maintaining and improving the quality of teaching and learning and investing in staff development is fundamental. The Newcastle School of Education (NSE) sits within the Group Quality and Standards department and provides a service to develop excellent teachers equipped to support learners and inspire learning across all sectors. The NSE ethos of adopting an employer-led approach to teacher education - Employer Led Initial Teacher Training (ELITE) - ensures that teachers are equipped to deliver excellence and manage change in their teaching and learning setting. The school delivers a suite of programmes to meet the demands of employers in response to de-regulation, the focus of the new Common Inspection Framework (CIF) and the demand for English and Maths specialists. These programmes are flexible in delivery and attendance modes, include blended learning routes, and can be tailored to meet the needs of providers across the sector including free schools and academies. 36

NCG recognises that the future success of Kidderminster College depends on a staffing model which ensures efficient, high quality delivery and high levels of staff engagement. Staff and managers will be encouraged to access comprehensive personal and professional development opportunities already in place as well as benefit from NCG s supporting systems. NCG has developed a robust staff appraisal and development procedure designed to recognise success, support progression planning, ensure suitable progression pathways are in place and help individuals grow and develop. Annual appraisals are conducted each year with interim reviews to monitor performance. Alongside the structures for enhancing the skills and development of staff, NCG has established a clear e-learning strategy for embedding and delivering e- learning across the curriculum and wider services. NCG s e-learning service provides strategic and operational leadership in the identification and development of e-learning interventions, systems and content to support the group s mission of developing people through learning and achievement. All staff will have the opportunity to be trained on the appropriate use and range of learning technologies to support their own development and the quality of learning. All new starters to NCG complete a robust induction process which includes mandatory online training modules including Health and Safety, Safeguarding and Equality and Diversity. NCG is uniquely placed to develop and enhance opportunities for staff at Kidderminster College. The existing performance management structures have been designed to raise aspirations and support staff to achieve their professional development objectives. There are clear progression routes for staff, both within NCG and beyond. For example, NCG s five divisions operate across diverse markets and provide a broad range of internal development opportunities for staff from the youth charity to the employability division. Staff are able to take best practice and operating principles from other areas within the Group and share within their own divisions. Both during the merger process and in future years it is expected that Kidderminster staff will benefit from training alongside other NCG staff, undertaking fact-finding and experiential visits to other NCG sites and contributing positively to the wider development of NCG from their own strengths and expertise. Fostering Strong Relationships with Employers, Partners and Communities Local people need a local college with which to identify. Colleges form part of the civic infrastructure and should work closely alongside local councils to deliver effective services for local people. In this context NCG and the newly merged college will seek an excellent working relationship with local authorities and align wherever possible to their objectives for the county. In return there will need to be support to enable the college to respond effectively to the needs of local people and the economy. Like Kidderminster College, NCG has established effective working relationships with key council directorates in Newcastle and Lancashire such as Children s Services and Management and Planning. This approach will be continued utilising the capacity of the Principal and senior team. Local 37

authorities will be invited to be represented on the college s Advisory Committee and assist in the development and resourcing of Kidderminster College s strategy to meet local needs. Strong relationships with LEPs, skills councils and employers are essential for an effective curriculum for young learners and adults that leads to employment or improved career prospects. Each vocational area at NCG manages its relationship with employers through employers councils. The councils advise and support college developments, and by listening to employers the college has developed a truly flexible and managed response with provision designed for and delivered in the workplace. This has led to effective long-term relationships with employers and organisations with which NCG does business. Kidderminster College could utilise the existing NCG employer engagement infrastructure to build strong local links with employers through such councils. It will also work in collaboration with partners such as CSkills, JTL, NHS, and local work-based learning providers to deliver learning contracts for adults and apprentices. Securing our Future Through Strategic Investment and Profitability NCG is committed to providing good quality buildings and resources to support teaching, training and learning. So far NCG has invested over 120m in creating buildings and facilities which set the UK standard for FE design, with plans to invest further where necessary. Through its building programme and high quality delivery, NCG has grown its income and in particular has increased participation rates at 16-18 which in turn leads to further investment. Without doubt quality accommodation and resources for teaching and learning stimulate aspiration and participation. Accommodation plans will be developed to take into account the skills needs of the region through working in partnership with other agencies, employers and Sector Skills Councils to ensure fitness for purpose. NCG has the experience in designing and managing large projects and this will be brought to the assistance of Kidderminster College to realise the college s aspirations to further improve its estate. Kidderminster College needs continued financial stability to secure its future and to continue the process of creating a curriculum which is capable of attracting new learners to the college to grow the college s income and build its reputation. NCG is financially very strong and delivers healthy surpluses. This is partly a function of scale but is also the result of rigorous financial management and sector-best staff in key professional roles. All of this will be made available to Kidderminster College through a merger. NCG s proven performance monitoring and business planning systems will be introduced to Kidderminster College on a phased basis. Through their use, management will be able to view and evaluate the current and planned financial viability of all activities throughout the college. They can then plan to maximise opportunities, funding, and use of resources, to ensure value for money which will lead to the long term financial health of the college. The cash generated from 38

operations along with that from other parts of the Group can then be invested, based on priorities, back into the college to support development of accommodation and resources and the specific needs of the learners. NCG has been undertaking a considerable volume of work with managers across the organisation in order to position itself well ahead of the expected funding reductions. This has included scrutiny of all current activities, forecasting which funding lines will grow or decline and putting in place plans to mitigate the worst of the cuts. NCG has a cohort of managers who understand the environment and are actively preparing for a new environment where funding may be harder to earn, but still presents considerable opportunities for colleges. Working with their NCG peers, staff and managers in Kidderminster College will undertake a similar piece of work so that they will be prepared and have a plan in place that meets their local needs. Key Group Services departments will provide expertise and support in the following areas: Finance and Shared Services (including HR MIS and HR administration) Group Business Development Group E-Learning Group MIS Group Quality Group Estates Management and Health and Safety Group IT HE Directorate Curriculum Group Accreditation Teacher Training and Development Having created the Shared Services department, NCG has invested heavily in new finance systems, the re-engineering of processes and the development of highly professional and effective Finance and Human Resources teams to create a performance managed Shared Services department based on stakeholder expectations and value for money (VFM). The department is located in Newcastle and has already been rolled out to support three colleges and two large operating subsidiaries. It has developed a core framework of systems, policies and standard processes that are applied to each division to create a simple yet effective platform for monitoring, management and delivery of high quality performance. NCG operates on leading edge new systems, unique in the sector, which provide uniform and shared views of data and information across the country. A back office infrastructure with flexible customer-centric staff ready to support NCG growth and business opportunities has been developed. 39

8. BRAND AND QUALITY ARRANGEMENTS Kidderminster College Brand and Identity Retention NCG will be retained as the name of the merged corporation and Kidderminster College used as the name for the college in Kidderminster. NCG has an excellent track record of supporting its divisions to develop and successfully promote their brands, enabling expansion into new areas and markets. For example: West Lancashire College was originally known as Skelmersdale and Ormskirk College (SOC) at the point of merger. As the business plan to extend the role and offer of the college was developed by the Principal, it became clear to the Principal and the college s SMT that the college needed a more ambitious, county-wide focus with a brand that matched its new and ambitious post-merger expansion plans. The college developed and consulted locally on a new name, with the full backing of NCG. The Principal then led the successful rebranding of the college from SOC to West Lancashire College upon launch of its new 42.8m building in September 2011. The development of a dedicated, purpose built Newcastle Sixth Form College. Established as a distinct brand aimed at those seeking to study A-levels or the International Baccalaureate, this project saw investment in a new website, bespoke marketing campaigns, and the development of a social media audience to ensure competitive advantage. The results have seen a significant expansion in student numbers i.e. student applications increased by 80%. Moreover, the work of promoting the new Newcastle Sixth Form College brand was recently recognised with a Chartered Institute of Public Relations NE Silver Award. The current launch of the Discovery School, a Free School in Newcastle focused on engineering and Science in the 14 to 19 market. An innovative new brand (including a web and social media presence) was created and deployed to support the engagement of parents keen to give their children a practical education with strong links to local industry. Discovery School is currently on track to attract the required volume of interest from parents and subsequent enrolments ahead of its opening in September 2014. The proposal is to invest the same level of expertise, experience and resource to build on the strengths of the current Kidderminster College brand, and assess those of its key competitors. This analysis will provide insight into how the Kidderminster College brand can be developed, expanded and subsequently promoted to ensure it remains competitive, and has the ability to grow in line with its ambitions in the areas where there are opportunities for expansion. Plans for extending the brand will be integral to the business plan for Kidderminster College and will look to take advantage of gaps in the existing local and regional market. NCG has the right experience and expertise to successfully 40

retain the Kidderminster College brand and develop and progress it to the next level. Case Study: West Lancashire College (WLC) WLC needed to maintain its identity as a true local college, run by local staff, who knew the local issues, challenges, opportunities and priorities for West Lancashire and the region. An enthusiastic team who were committed to driving up the standards of teaching and learning and overall success rates made sure that decisions were made with learners at the heart. Learners, employers and stakeholders who live and work in Skelmersdale, West Lancashire, are very proud of where they live and work. There is a real sense of community pride and collaboration, which has been brought about by effective leadership at the college. Significant time was spent building up relationships externally with key stakeholders, local primary and secondary schools, West Lancashire Borough Council, Lancashire County Council, Young People s Service, Community and Voluntary Sector and hundreds of employers in the local and regional area. This investment raised the profile of the college locally and regionally to ensure that WLC was synonymous with excellence, high standards, high expectations and a local college that was truly at the heart of the community. Retaining a name to which everyone related and of which they were proud i.e. West Lancashire, was important in all literature, events and website promotions. Stakeholders and partners are fully aware that WLC is a division of NCG and can see the benefits that WLC and the community of West Lancashire has enjoyed since the merger. For example, the WLC building is open to the community for leisure activities i.e. dance and sport. The Chief Officer of the CVS has a place on WLC s Advisory Committee, thereby providing the community voice. WLC s turnover has grown from 7.8m to 12.7m, and staff numbers from 194 to 364 since its merger with NCG. Within NCG each division has an in-house Marketing Team responsible for the development and implementation of locally-based marketing initiatives. Divisional teams are fully supported by NCG Shared Services including online development, e-learning, public relations, social media, web management and a full in-house graphic design team. This model of specialised services at Group has proved highly effective as they can apply specialists in areas such as social media and web development to work across all divisions. Supporting Kidderminster College s Market Ambitions NCG s size and scale has resulted in investment in a national IT infrastructure capable of supporting data and compliance, e-learning and communications anywhere in the country. This will be deployed to support developments at 41

Kidderminster College to help realise market ambitions. In addition to the tools and content already in place, an online learning support model, which ensures learners gain the support they need whilst working at distance from the campus, has been developed. This model, together with the technology already in place, will offer learners an excellent online experience and provide them with the flexibility they need. Learners will benefit from the advantages of NCG s online offer and allow Kidderminster College to focus on developing content and curriculum, rather than systems and services. NCG will work with Kidderminster College to support the vision of the Worcestershire and Greater Birmingham and Solihull Local Enterprise Partnership (LEP). NCG already works closely with the LEP, responding to employer needs and skill demands. This knowledge and these relationships will be used to strengthen Kidderminster College s position whilst helping to shape a sustainable curriculum offer. Key growth sectors for the LEP align with the ambitions of Kidderminster College and the expertise of NCG, including Advanced Engineering, ICT, Life Sciences, Environmental Technologies, and Tourism and Horticultural and Food Production. Together, NCG and Kidderminster College will create a strong and responsive offer for the local area, combining existing knowledge, best practice and links with Sector Skills Councils and awarding bodies. Planning and Quality Arrangements Planning and performance monitoring in the merged college will be through a cyclical planning and quality review framework that integrates self-assessment processes with strategic planning and business planning, including budget setting. Through this framework, the merged college will develop a culture of continuous improvement which is at the heart of a successful college. The process of planning and performance monitoring and quality review involves staff at all levels of the college organisation. Strategic direction and headline targets are determined by the CEO and are approved by NCG Corporation. These are set in the context of the mission and priorities. Working within these parameters, each organisational unit develops a business plan that is agreed with the Executive and is delivered through delegated budgets and performance targets. Through self-assessment, performance monitoring and quality review processes, each organisational unit accounts for its progress and puts in place measures to enhance performance and delivery. The planning process takes into account both internal and external factors including: strategic partnerships funding changes and opportunities markets/competition external performance targets college development plans internal performance targets 42

The public documents that are developed through this process and submitted for approval by the SFA include the Self-Assessment Report, Development Plan, Finance Plan, Accommodation Plan, and Risk Management Plan. The process delivers a culture of continuous improvement and an appetite for growth and enterprise that is supported through clear accountabilities. Through this framework, Kidderminster College and NCG will work together to grow and improve its joint success. NCG recognises that planning at Kidderminster College is already effective and well established. However, NCG s comprehensive curriculum and financial planning process can add value and underpin the support available to Kidderminster College. NCG s financial planning is linked very effectively to arrangements for curriculum planning. For example, very strong procedures for budget management and for securing the efficient and effective use of resources have ensured NCG is able to continually invest and improve facilities for learning nationally. Curriculum management across NCG is very strong and managers are highly effective at driving improvements, sharing good practice and working effectively as a team. Managers are responsive and supported to develop their entrepreneurial skills and to broaden provision. The sustained outstanding performance in subject areas at NCG where Kidderminster College has ambitions to improve will be shared with the college through access to successful curriculum management teams, and will be supported by sharing best practice activities. This will support the college to increase its success rates, achieve future growth and strengthen its position as a leading provider of general further education. 43

9. STAKEHOLDER AND PARTNERSHIP WORKING Alignment with Worcestershire and Greater Birmingham & Solihull LEPs Kidderminster College has established strong relationships with both the Worcestershire and Greater Birmingham & Solihull LEPs. The college has been engaged with the work of the LEPs from their inception and has contributed to the development of their skills plans and priorities. The Principal of Kidderminster College is a member of the North Worcestershire Employment and Skills Board, which draws together representatives of both LEPs to address education, training and employment issues across the North Worcestershire area. Kidderminster College is also a member of the consortium of colleges of the Greater Birmingham & Solihull LEP, which is harnessing the collective resource of the nine FE colleges in the area to work with the LEP and the Birmingham Chamber of Commerce to provide a coherent response to skills and economic development priorities. Following the proposed merger, it is intended that Kidderminster College will remain engaged in these existing partnerships and will continue to work with both LEPs and the other colleges in the region to maximise the economic impact of education and training. Through a proven stakeholder engagement strategy, NCG has established and built strong working relationships with local enterprise partnerships (LEPs) throughout the UK to understand local education and training priorities. In Greater Birmingham and Solihull (GBSLEP) NCG is already actively engaged with strategic forums and events, including attendance at the Annual Conference and through joining the Skills for Growth Hub. NCG has developed a strong relationship with the GBSLEP to share information and gather intelligence to shape delivery, in particular through the fledgling Skills Support for the Workforce project. From NCG s prior engagement and work with Worcestershire LEP a number of skill priorities have been identified, including: Leadership and Management Skills, especially for SMEs; Higher Level Skills (Levels 3 and 4); Soft Skills including problem solving, team working and customer handling; and numeracy and literacy within the existing workforce. By combining the expertise of delivering Employment Related Services and Workforce Development initiatives, including Apprenticeships and broader in-work support, NCG will work with Kidderminster College to support the aims and objectives of the emerging Skills Action Plan, in particular strengthening the relationships between education and business, improving employability skills and workforce planning. NCG also recognises that despite the GBSLEP topping the national league for new job creation as a result of inward investment, there are significant skills gaps for the city. The 2012 Closing the Gap report by Birmingham City Council highlighted that 56,700 people need up-skilling to meet the needs of the engineering sector. Gaps continue to exist between what employers want and the level of skills in the population, so NCG and Kidderminster College will seek to redress this balance by creating a future workforce that has a clear career pathway with the ambition to grow and develop. 44

Supporting Kidderminster College to meet Education and Training Priorities NCG will work with Kidderminster College to ensure it is a key driver in delivering the vision of the Worcestershire and GBSLEP. This will help to foster stronger links with key stakeholders, including employers, to support Worcestershire LEP in its aim to create the right economic environment to inspire businesses, encourage investment and to create lasting and sustainable employment by 2017 and beyond. The curriculum will be co-designed with Kidderminster College to reflect the best practice in the sector and the demands of the local economy as the vision for GBSLEP to create and support a globally competitive knowledge economy so that in ten years time the area will be renowned as the easiest place in Europe in which to set up and run a business. NCG will continue to support local initiatives and priorities including the opportunities surrounding South Kidderminster Enterprise Park to deliver a responsive and flexible offer to local employers. Kidderminster College will have access to NCG resources and staffing expertise to support meeting the skills priorities of both LEP regions in response to existing and future priorities. This will include access to the current strategic partnership capacity in Intraining. 45

10. FINANCIAL, LEGAL AND ESTATES Current Position of Kidderminster College Kidderminster College has managed its finances, in an environment that has been tight for the whole of the sector, in a sound fashion, and has steadily improved the efficiency of its operation. It successfully restructured its key manager roles in 2011. The FMCE (Financial Management and Control Evaluation) review, as part of the Ofsted Inspection in 2011, assessed the college s Financial Planning and Financial Controls as Outstanding. The SFA assessed the financial health of the college in 2012-2013, on the basis of the audited Financial Statements, as Good. The SFA has agreed with the College s self-assessment of its financial health for the period of the latest 2-year Financial Forecast as Good. Kidderminster College has an income of c. 9m per annum; and has made a surplus (excluding FRS17) every year since 2004/05. The college has net current assets in excess of 2m and net assets in excess of 7m. It has c.100 cash days in hand, a current ratio of 3.0:1, and has regularly achieved annual cash inflows from operations. The college has adopted a longer-term strategy, utilising the EFA lagged learner number funding methodology, to grow its 16-18 funding allocation. As a result, the college forecasts close to break-even in 2013/14 and 2014/15. Income Analysis and Commentary The college is highly dependent on funding body income, which accounts for around 90% of total turnover. The college has taken into account the forecast reductions in EFA and SFA funding, as well as the introduction of loans for learners aged 24+ studying programmes at Level 3 and above. The college plans to exceed its annual EFA funding allocation by 5% for each of the next two years to benefit from the lagged learner number funding methodology. The planned expansion of HE income is as a result of the introduction of HNDs funded directly by HEFCE, which is in addition to those run in conjunction with the University of Worcester. NCG Financial Performance NCG is one of the largest and most financially robust education, training and employability organisations in the UK, with an annual income of almost 180m. Therefore, the resultant organisation following a merger between NCG and Kidderminster College will be economically sustainable for the foreseeable future without any reliance on further mergers. NCG is not at risk of acquisition from a third party. Annual Revenues NCG s profit and loss statement for the last three financial years is summarised below: 46

At 31 July 2013, NCG had cash and short term investments of 57.6m and net assets (excluding pension liabilities) of 157m. In this period, NCG also generated a net cash inflow from operating activities of 12.8m and has cash days in hand of around 117. NCG s SFA financial health rating is Good. This assessment is dated December 2012 and is based on audited financial statements for the year ended 31 July 2012. The SFA calculated assessment of NCG s financial health for the period of the latest three-year financial forecast as Good, and NCG has also self-assessed its financial health for that period as Good. NCG s latest three-year financial forecast was submitted on 31 July 2013 and covers the period ending 31 July 2016. Subsequent to any merger, the financial health of the resultant organisation will be assessed by the SFA as a whole and the financial health rating of Kidderminster College will therefore be determined by the financial health of the larger NCG group. Post-Merger Financial Position Post-merger, Kidderminster College will become a full partner in the NCG family with 100% commitment to securing its future and building on its existing financial health. NCG will assist Kidderminster College to improve income growth and achievement of cost efficiencies, whilst maintaining its impressive gearing and liquidity ratios. NCG will provide Kidderminster College with back-office support through its shared services model, realising cost efficiencies for Kidderminster College and freeing up resource to focus on curriculum expansion and income growth. This model was successfully employed by NCG following the merger with West Lancashire College where annual income has grown from 7.8m pre-merger, to 12.7m in 2012/13. Staff numbers have also increased from 194 at the time of merger to 364 today. 47

NCG s support will enable Kidderminster College to strengthen the range, quality and accessibility of its training provision and in doing so secure growth in learner numbers. NCG has the scale and financial resource to directly fund its divisions for growth in EFA 16-18 numbers, overcoming the lagged funding methodology through Group cash flow. It also has a strong track record of achieving additional SFA income growth and has capacity to accommodate additional HE students. Estates Maintenance Analysis and Commentary Kidderminster College relocated to a new, purpose-built, town centre site in 2003 and has continued to invest in facilities for the benefit of learners and staff. It has subsequently successfully completed two 1m+ investments in 2011 and 2012 to create an extension, glass-roofed atrium, and social and eating areas. A further 300k investment in the IT infrastructure and equipment began in summer 2013. The college also has an annual routine and planned maintenance budget together with an annual works programme. The Ofsted inspectors commented favourably during the 2013 inspection on the quality of the college s main campus accommodation. The college has also taken on the lease of additional facilities for motor vehicle work in Kidderminster from 1 August 2013, following the withdrawal of a subcontractor. The College acquired a lease until 31 July 2015 on premises to deliver Construction and Motor vehicle courses. The facilities required investment to address a range of safety and quality issues and an action plan was agreed and the finances made available to complete these in time for the new intake of learners in September 2014. Remedial action to address the safety issues has been actioned. Further improvements to this site will be made following the merger, and the development of an alternative facility for Motor Vehicle, Construction and associated technologies will be an early priority for investment NCG Estates Investment NCG recognises that continual investment in estate and facilities is required in order to improve the learner experience and successfully compete for learners in the FE sector. Over the past ten years NCG has invested significantly in improving the estate and facilities of its divisions for the benefit of its learners and communities. As such NCG has a great reputation and significant experience of delivering large, multi-award winning buildings and capital projects to a very high standard, within budget and time constraints. NCG also has significant experience of successfully accessing capital grants in supports of these projects and Kidderminster College will benefit from this experience and expertise in relation to any future investments in its estate. Significant projects completed by NCG in the past ten years are summarised in the table below: 48

Proposals for Continuing Investment in Kidderminster College s Estate / Facilities NCG will work with the senior team at Kidderminster College to review the college s accommodation portfolio and develop a coherent and affordable property strategy. NCG operates a two-pronged capital investment process, comprising: Routine Capital Investment: including small scale investments in building improvements and maintenance, equipment for curriculum provision, and IT infrastructure and equipment. A routine capital budget is allocated to each division and sub-division as part of the annual budgetary process and NCG s total routine capital budget is c. 5m per annum. Project Capital Investment: which relates to large scale improvements and the provision of new buildings and facilities. Post-merger, a routine capital budget will be agreed with Kidderminster College with relative autonomy thereafter on how it is invested. Any non-routine capital expenditure is subject to demonstration of an economically viable business case. Kidderminster College will have the full support of NCG in the identification of growth opportunities and the development of viable business cases in support of investment. For example, on merger with Skelmersdale and Ormskirk College in 2007, NCG identified an immediate deficiency in the provision of Engineering and Construction. Shortly after merger, The West Lancashire Construction Academy was rapidly developed on a site close to the college and remains a key element of the college s provision to this day. 49

11. GOVERNANCE, MANAGEMENT AND STAFFING ARRANGEMENTS The merger timetable anticipates a formal implementation date of 1 August 2014, following on from formal agreement of both corporations at their May 2014 meetings. Planning for Kidderminster College will ensure that there will be a minimum of disruption for students. For new students enrolling for September 2014, the proposed programme was prepared and published in the autumn of 2013. As a result new students will have had good, early information on which to make course choices. Throughout the process of planning there will inevitably be risk. The experience of the colleges in applying risk management processes and controls will be used at each step of the way in the preparations for the merger, thus negating or minimising any potentially adverse effects of any difficulties that might emerge. Governance and Management Newcastle College and West Lancashire College operate an Advisory Committee structure reporting into NCG Corporation. An advisory board will be set up in a similar way for Kidderminster College. The terms of reference of the committees are to advise the Corporation and Principal on: The educational character of the college The needs of local stakeholders Strategies to respond to local needs Strategies to improve the performance of the college The committees also receive planning and monitoring information on the colleges and provide stakeholder views on how to respond to local need. The Advisory Committee is made up of between seven and sixteen members: One member of the Corporation The Principal of the college Not more than two other members of staff Not more than two students The balance of members who appear to have the necessary skills and experience to support the Committee in fulfilling its terms of reference and at least half of whom shall have experience of the needs of local employers Advisory Committee members are external representatives who have a vested interest in the educational character of the college and are committed to making a difference in line with the college priorities. At West Lancashire College members include the Chief Officer for CVS, Operations Director for Young People s Service, Managing Director of local businesses, and the ex-deputy Chief Executive of the Borough Council. The positive work of the Advisory Board at West Lancashire College has led to a cross-borough working group and an agreement of ambitious joint strategic objectives between West Lancashire Borough Council and West 50

Lancashire College. The Chair of the West Lancashire Advisory Committee is also currently the Deputy Chair of NCG. The Chairs of the Advisory Committees for Newcastle and West Lancashire Colleges are also members of the Corporation. The term of office of initial members of the Committee for Kidderminster College will be up to four years, with the following exceptions: The Principal, who shall serve for the period of appointment as Principal The student members who shall serve for one academic year. The Advisory Committee normally meets twice in each term on dates decided by the Committee. Additional meetings may be called as necessary. Minutes of the Committee are presented to Corporation. NCG is currently reviewing the advisory board arrangements in light of the merger with Kidderminster College to ascertain what further responsibilities could be delegated locally and to ensure that the boards can truly meet the needs of local people, employers and other stakeholders. Any changes that come out of this review will be applied to the board structure at Kidderminster and would not result in any dilution of responsibility. Proposed Board Structure for Kidderminster College NCG will mirror the tried and tested approach at West Lancashire College when establishing the governance arrangements at Kidderminster College.Ofsted (2012) stated that NCG Management structures are highly effective. A Kidderminster College Advisory Committee (see below) will be established comprising employers, community interests, Wyre Forest District Council, staff, students and other stakeholders to shape the strategy for the college supported by the professional advice of the Principal. Initially this Committee could comprise the current governors of the college. This approach ensures a robust governance process is in place with NCG and Kidderminster College. A space on the governing body of NCG will be made available to a member of the Kidderminster College Advisory Committee. As is already the case in NCG s other divisions, the Principal of Kidderminster College will have the responsibilities of a senior operational manager, be a member of NCG s Executive Board, and be charged with developing and delivering effective relationships with learners, employers, partners and communities. 51

Roles for the Principal and SMT The Principal and Senior Management Team will continue to manage Kidderminster College. They will benefit from immediate support from NCG specialists where this is needed and over time the roles of senior managers will adjust to align with the other divisions and services of NCG. NCG values very highly the development of all its managers and the Senior Management Team along with other college managers. All managers will join the bespoke NCG Leadership Academy which has been specifically designed to improve and enhance leadership across the Group. The Principal of Kidderminster College will continue to run the institution with a high degree of delegated authority from NCG. It is anticipated that he will continue to represent Kidderminster on the full range of local collaborative groups and networks. Relationships with both the Worcestershire and Greater Birmingham LEPs will be maintained and enhanced. A merger between NCG and Kidderminster College will assist both parties in talent management and succession planning. The commitment of key people who work in the college is impressive and will provide a strong foundation for the future. Kidderminster College will be a full partner in the NCG community and will work with the governors and Executive on equal terms with other divisions in the group. At NCG the relationship between the Executive and management teams is based on mutual respect. Schools and Services value the strategic contribution and executive leadership of the Executive and the Executive respect the expertise and local knowledge of each school/operations management teams. The relationship between NCG and Kidderminster College will be based on most of the above plus the capacity to identify and meet the needs of local stakeholders and the stature and expertise to grow the college in that local environment. Avoidance of Compulsory Redundancies NCG ensures that structures within Divisions are designed to maximise staffing for front line delivery to learners and customers. Ofsted (2012) noted The management structure created by NCG has ensured that the different divisions focus well on ensuring that learners succeed. Each division of NCG accesses a range of shared services including MIS, HR- MIS, Quality, Employee Operations, Finance, Payroll, e-learning Development and Estates, which are operated through a centralised Group Shared Services model. As new Divisions have joined NCG, resource has been released through introduction of Group Services, which through economies of scale, has enabled the expansion of front line services. Capacity released at Kidderminster College through the provision of shared services can then be utilised to focus on curriculum development, quality improvement and enhancing provision for learners. 52

NCG plans to work with Kidderminster College to increase the college s income streams which will impact positively on staffing numbers and the creation of more front line posts. Therefore, it is not anticipated that this merger will have any impact on front line delivery staff (although we could not guarantee this in the event of any negative changes to our funding contracts). NCG realises that compulsory redundancies would have a negative impact on perception of the merger by staff, learners, the local community and other key local stakeholders. Therefore, whilst NCG will seek to assist Kidderminster College with ensuring it is operating efficiently, it will seek to avoid compulsory redundancies and minimise job losses wherever possible. Kidderminster College has already put in place a recruitment hold on all nonessential posts and this has resulted in a number of vacancies being held until post-merger so that redeployment opportunities are available within the college. NCG will also review all vacancies across its expansive operations, particularly those arising within Intraining in Birmingham and the Black Country and, all suitable posts will be held for redeployment opportunities for any Kidderminster College staff affected. A similar approach was adopted successfully with West Lancashire College where staff numbers have risen from 194 at pre-merger, to 364 today, with staff turnover falling from 45% to 14%. At merger, all Kidderminster College staff will be TUPE transferred into NCG on their current terms and conditions. Over a period of time, Kidderminster College will be integrated and aligned with NCG policies and procedures. This does not necessarily mean wide-scale change. For example, when West Lancashire College merged with NCG staff remained on their local terms and conditions as these best met local need. NCG and Kidderminster College will fully consult with Staff and Trade unions on all aspects of the merger and appropriate communication channels will be established to allow staff input throughout the whole process. 53

12. PUBLIC CONSULTATION AND DUE DILIGENCE Background The proposed merger has developed out of an open and transparent process. In mid-september 2013 Kidderminster College published an Invitation to Express Interest, the document set out the rationale for a merger, and invited interested parties to make a proposal against it. The document, which was agreed by the Corporation of Kidderminster College, made public the criteria against which any proposals will be assessed. All the relevant stakeholders were made aware of the document, which was also published on the college s website. Proposers were invited to respond by the end of October 2013, in a format prescribed by the Invitation to Express Interest. The proposals received were scored against the published criteria and the proposers invited to present to Kidderminster College and answer questions identified during assessment of their written proposals. At all stages, the assessment of the proposals was undertaken by a combination of the Senior Management Team and empowered governors to whom authority had been delegated by the Corporation, which regularly approved progression to the next stage. The decision to agree NCG s proposal was unanimously endorsed by the Corporation of Kidderminster College. Outcomes of the Public Consultation The two parties to the merger have continued the openness and transparency that has characterised the process thus far by carrying out a full public consultation. The consultation complied fully with statutory requirements for the proposed dissolution of FE college corporations, including the placement of statutory notices in the local and national press This Initial Outline Proposal (IOP) was made available to all relevant stakeholders, and made available publicly via the websites of both Kidderminster College and NCG All stakeholders were invited to respond to the consultation questions relating to the merger proposal Kidderminster College and NCG has published a summary of consultation responses received and, where relevant, has shared intentions to address the nature of the responses Kidderminster College will also consult separately with its recognised trade unions over the transfer of its employees to NCG, to meaningfully satisfy its obligations under TUPE In total there were 56 responses during the consultation period, with a further written response being received from the Worcestershire LEP six days after the end of the consultation. The LEP response is not included in the consultation statistics below. The responses can be broken down as follows. 54

Online Survey 45 Paper based survey 8 Written Responses 3 Respondents to the survey were asked to describe their interest. The distribution of the 53 survey respondents who answered the question was: College staff (62%) Learner (10%) Local community (8%) College or training organisation (8%) Other (8%) Local business (2%) Employer (2%) The 3 written responses were distributed as follows. Local government (1) Government agency/body (1) College or training organisation (1) There was a clear majority in support of the merger. Of the 46 survey respondents that answered the question 29 respondents (63%) said they supported it, a total of 10 respondents (22%) did not support it and 7 (15%) were not sure. All 3 written responses were supportive of the merger. Of the 56 responses overall, therefore, 65% were in favour. Support for the merger is further evidenced by the answers to the individual questions in the survey: 63 per cent supported the retention of a local identity, name and management 94 per cent supported the broadening and expanding the range of provision Two areas that will need to be addressed further in the final merger proposal are that: 38 per cent thought that a group may be adversely impacted by the proposals (28 per cent did not) and 48 per cent supported the management/governance proposals (37 per cent did not) A summary of the responses to each question is as follows: Question 1: Kidderminster College, as part of NCG, will keep its name and identity and be managed locally by its own Principal and senior staff based in Kidderminster following the merger. Do you support this? There was a clear majority in support of retaining the name/identity and being managed locally 31 respondents (63%) said they supported it. 55

A total of 8 respondents (16%) did not support this aspect and 10 (20%) were not sure. The types of respondent not supporting the proposal to be staff (five), other (two), and local community (one). Support for the proposal was spread across all of the interest types who responded. All of the respondents from other Colleges/Training Organisations (four) supported it. Question 2: Kidderminster College runs a broad range of courses for individuals and employers from its main site in Kidderminster. As part of NCG it will seek to broaden and expand that range in the future. Do you support that aim? There was a clear majority in support of broadening and expanding the range of courses on offer in Kidderminster, 46 respondents (94%) said they supported it. No respondent said no to this proposal. Question 3: Do you think any group (including students and staff) would be adversely affected by the merger plans? There was a balance of opinion between those that thought that there would be groups affected and those that did not. 18 respondents (38%) indicated that they thought groups would be adversely affected. A total of 13 respondents (28%) thought that no group would be adversely affected and 16 (34%) were not sure. The types of respondent concerned that groups would be affected were staff (twelve), other (three), and unknown (two). Question 4: Are you in favour of Kidderminster joining the NCG College and training group in order to realise the benefits set out in this proposal? The chart shows a clear majority in support of the merger, 29 respondents (63%) said they supported it. A total of 10 respondents (22%) did not support this aspect and 7 (15%) were not sure. The types of respondent supporting the merger to be staff (four), other (two), and local community/learners/employers (one). Support for the proposal was spread across all of the interest types who responded. Question 5: The Corporation of Kidderminster College will be dissolved and its assets/liabilities transferred to NCG. The board of NCG will include a Kidderminster representative and the Principal of Kidderminster College will be a member of the NCG Executive Board. Do you support this? The chart shows a balance in favour of the proposed management/governance arrangements, 22 respondents (48%) said they supported it. A total of 17 respondents (37%) did not support this aspect and 7 (15%) were not sure. The types of respondent not supporting the proposal to be staff (nine), other (three), and College/Training Organisations (two). 56

Support for the proposal was spread across the interest types who responded. Support has been expressed by key organisational stakeholders such as the local council, the local colleges, the skills funding agency, and by key individuals such as the local Member of Parliament. The survey allowed respondents to add comments. This qualitative information, along with the quantitative information above, has informed the identification of the key messages below. These are addressed in this document. Specific response to the concerns around the impact on staff will be required. This will highlight the large groups of staff unaffected (all learner facing staff) and explain how the TUPE process will work. It will address how this will be communicated to staff across the organisation and how they will be consulted. More clarity will be given on the nature of the local advisory board and the ways in which it will work to challenge performance and ensure that the College, as a Division of NCG, meets the needs of local stakeholders. Further detail of the financial implications of the merger for both parties will be required. The information in the IOP should be updated with any recent developments. A clear description of the proposed shared services model will be included, including identification of the benefits this will bring for Kidderminster College NCG will make clear its commitment to fully retaining resources and provision in the town, as well as identifying ways in which these will be further developed. The full report on the public consultation is available from the website of both organisations. Consultation Feedback from Key Partners Kidderminster College has undertaken extensive, informal consultation with a wide range of partners and stakeholders throughout the process of exploring its strategic options and seeking a merger partner. The college has been commended for the openness and thoroughness of this process and has received overwhelming support for its plans. It has not, to date, received any negative feedback, or opposition. The key concerns expressed by partners and stakeholders have reflected a strong desire to see Kidderminster College remain as an identifiable entity, providing access to a broad range of vocational education and training for its local area. The college has strong links with schools, employers and community groups, and is closely identified with the town of Kidderminster. Consultees have urged the college to seek future options which will build on these, to maintain and strengthen Kidderminster as a centre for education and training. 57

It is our strong belief that the current proposal addresses all these concerns and wishes in a very positive manner. The MP for Wyre Forest, Mark Garnier, is a governor of Kidderminster College and is fully supportive of the proposed merger. Support from National Partners At all stages of the process, Kidderminster College has sought to involve, and be advised by, representatives of the Department of Business, Innovation and Skills, and officials from the Skills Funding Agency and Education Funding Agency. Whilst aware that decisions regarding merger and dissolution are now in the hands of college corporations, both Kidderminster College and NCG fully recognise their responsibility to respond to government priorities and ministerial guidance. We are confident that the current proposal is the result of a process which reflects both the spirit and the letter of the relevant guidance. Due Diligence Both parties have carried out due diligence studies on each other in parallel with the development of the initial outline proposal and the public consultation. NCG appointed UNW Chartered Accountants and Bond Dickinson Solicitors to undertake financial and legal due diligence respectively. Additionally Property, Health and Safety and IT due diligence was completed by the relevant internal NCG experts. The most significant issues raised were around ensuring Kidderminster Bank Loans are able to transfer and their covenants are not breached and that the dissolution does not cause the Local Government Pension Scheme (LGPS) pension liability to crystallise. Additionally it was recognised that Contract novations and gaining appropriate consents to proceed with the merger are key. A further significant risk was identified around the poor condition of the Kidderminster Motor Vehicle Centre, an issue that had previously been recognised by the college itself and highlighted by Ofsted. A number of other less significant issues were also identified. Discussions with both the bank and the relevant pension authorities have been undertaken and plans are in place to ensure the first two risks are mitigated. A comprehensive action plan has been created to follow up on all the issues. Kidderminster College appointed Baker Tilly to undertake a limited scope due diligence on NCG. They were able to report that there were no significant issues and highlighted a number of areas for further discussion including funding and the potential impact on Kidderminster of future funding reductions, including the continued investment in facilities, NCG s recent loss of a DWP contract and a potential litigation issue. 58

Appendix 1 NCG Structure Incorporating Kidderminster College (see P 51) 59