10 July 2003

To	Heads of HEFCE-funded higher education institutions Heads of universities in Northern Ireland

Direct Line	0117 931 7300
Direct Fax	0117 931 7203

Circular letter number 18/2003

For further information contact David James, 0117 931 7328, d.james@hefce.ac.uk

Dear Vice-Chancellor or Principal

Mergers: Consultation on HEFCE guidance on proposals from institutions

This letter provides our current guidance on plans for merger with other institutions (see Annex A). Before finalising this guidance, we invite comments from institutions, sector bodies and other government agencies by Friday 10 October 2003.

Background

Institutions are considering how to respond to the challenges of a rapidly changing HE environment, and in particular to the agenda set out in the recent White Paper and reflected in our strategic priorities. Some institutions are actively discussing mergers or other forms of alliance with other HEIs or further education colleges, and a number of innovative proposals are in development.

We have had considerable experience of working with institutions on such proposals. The extent of work and timescales involved are often under-estimated, which can make the process more complex and even jeopardise the desired outcome. It is therefore essential that all parties are fully aware at the outset of what is required and plan their work accordingly.

Our proposed revised financial memorandum with institutions will require institutions to involve us actively at the early stages of any proposed merger. The guidance at Annex A is designed to assist institutions through the entire process, from identifying an opportunity or problem, to completing a business case and business plan. Where they intend to bid for discretionary funding, for example from the new Strategic Development Fund (see HEFCE 2003/28) we will expect them to follow the detail of this guidance, and their proposals will be evaluated against it.

Contacts

Institutions considering merger should contact their HEFCE regional consultant in the first instance. If you have any queries or comments about the content of this guidance, contact David James, Finance Consultant, on 0117 931 7328 or at d.james@hefce.ac.uk.

Yours sincerely

Howard Newby
Chief Executive

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Annex A
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