1292416456_CCS_and_Community_Ac

8/8/2019 1292416456_CCS_and_Community_Ac

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Community Council

for Somerset and

Community Action

Community Council for Somerset (CCS) is a Rural Community Council

(RCC) working within the county of Somerset. Community Action North

Somerset, South Gloucestershire and Bath & North East Somerset

(Community Action) was the Rural Community Council that operated

within the former county of Avon.

Both organisations were part of the South West ACRE Network (SWAN), an

RCC network for the South West region. As RCCs, the two organisations

had very similar objectives – to support people who live and work in rural

communities. Their activities included helping to maintain local services

such as shops, post ofces and village halls, delivering community transport

services, facilitating parish planning and doing community support work.

Both charities were small; CCS had 14 staff, while Community Action had

ve staff and had been steadily contracting in size since 2007.

The two organisations had worked on a number of joint projects from

2008. During this time they developed a good working relationship on an

operational level, although their boards had had limited communication.

Their joint working culminated in recruiting a shared Business Development

Ofcer in April 2009, whose role was to identify new opportunities for thetwo organisations, such as tenders for service delivery.

LEARNNG RO ERGERS - TE CASE STDES

SOMERSET

Community Action and Community Council for Somerset

(CCS) decided in ay 2009 that they would pursue closer

collaboration or merger. They progressed some way with

merger discussions and planning before the process was

abandoned in April 2010. Since then, Community Action has

begun the process of closing down.

CCS and Community

Action work in

partnership on a

number o projects

Steering Group

undertakes

discussion around

collaboration and

merger. Processes

or making the

decision about

merger undertaken

e.g. ull fnancial due

diligence process

Preparatory work

beore merger is

proposed to boards

April 2009

Shared Business

Development

Ofcer recruited

June 2009

Initial discussions on

merger begin

January 2009

Boards agree in

principle to pursue

merger; Steering

Group established

and met

April 2010

Merger abandoned

30th April 2010

Community Action

ceases trading



COMMT COC OR SOMERSET A COMMT ACTO


otivations for merger

Discussions started as CCS and Community Action were both looking to

grow and strengthen their organisations, and saw an opportunity to do this

by pooling skills and experience. As a result of previous joint working, they

were aware that their staff worked well together – but because skill sets

were complementary, merger or collaboration was unlikely to necessitate

many changes in stafng. They also spotted the opportunity to make cost

savings through sharing back ofce resources.

The fact that the two organisations were a ‘good t’ was also a motivational

factor. They had very similar charitable aims and objectives. Both

organisations had the support from national bodies in pursuing merger,

including the Charity Commission and Action with Communities in Rural

England (ACRE).

The two organisations also believed that merger would give them a better

chance for survival in the current nancial climate. This was particularly

important for Community Action, the smaller of the two organisations,

whose capacity (both staff and nances) had been steadily shrinking over

the past two years. As such, Community Action was nding it harder to

bid for new work and to have a meaningful presence ‘on the ground’.

One further driver for Community Action was that at the time, it was an

unincorporated association, but had been looking at forming a Company

Limited by Guarantee. erging would have made it unnecessary to go

through this process.

eanwhile, Community Council for Somerset’s Chief Executive had recently

moved on, and the Board was looking at options for future development.

One option identied was to strengthen by collaborating or merging with

another organisation.

oving towards merger

The organisations began considering a potential collaboration or merger

in ay 2009.

nitially, the chairs and chief ofcers met to discuss the possibilities. At thismeeting, they decided to look at ways to collaborate further and possibly

to merge. This proposal was taken to each board of trustees separately,

and both agreed to pursue collaboration or merger.

Both organisations then consulted with their key funders and stakeholders

about the plans, which were met with a positive response.

CCS and Community Action secured funding from Capacitybuilders’

odernisation und, which was used to support the nancial due diligence

process and to obtain legal advice, for example about what the process

would mean for trustees. At this time, the two organisations started todevelop a joint strategic and operational business plan to explore how

further collaboration or a merger would work in practice – also utilising

funds from Capacitybuilders.

“The District Council thought

it was orward thinking

because we were doing it oour own back and were not

being told to do it.”

STAOD




nternally, a steering group was established, made up of two board members

and the Chief Executives from each organisation. The group discussed

strategic issues and practicalities of further collaboration or merger, such

as cultural and nancial implications. ollowing each meeting, members

of the steering group were tasked with exploring specic aspects in moredepth. This process was considered useful in itself.

An away day was arranged for all staff from the two organisations. The

aim of this was to bring staff together to discuss commonalities in working

practices, current activities and ways they could develop and expand as

a joint entity. This was seen from both sides as a successful part of the

process. rom this, working groups were established, made up of staff

from both organisations. These looked at particular topics related to the

merger, such as the administrative function and communications.

Both organisations regularly discussed progress with trustees at boardmeetings. Through these meetings, both organisations wanted to ensure

their trustees understood the whole process, including what it would mean

for them individually and as a board. During these discussions, it became

clear that merger, and not further collaboration, should be the ultimate

outcome of the process.

The organisations also talked to other local charities that had gone through

merger, including some that had tried and failed, and got advice on things

such as pitfalls, nancial implications and marketing.

“We did a lot o internal

scrutiny which was one o

the things that whether we

went ahead [with the merger]

or not, was useul, as wewouldn’t have taken the time

to do this otherwise. We

really scrutinised where we

were fnancially, and where

we could make individual and

joint savings.”

STAOD

“It was important or usto get advice on fnancial

implications, as this was part

o our decision [to go ahead

with the merger] – how much

it would all cost.”

STAOD


The decision not to proceed

When the decision was made not to proceed with the merger in April 2010,

both organisations had gone quite a long way through the merger process.

Due diligence had been completed, they had set up a joint steering group,

and were looking in detail at the practicalities of merger and what it would

look like.

n the months leading up to this decision, regular joint steering group

meetings had been taking place. owever, as these went on, it started to

become clear that the merger process was not going to be as smooth asthe organisations had hoped. Before due diligence had been completed,

Community Action received conrmation from their pension fund that

none of the decit could be written off. Because of this perceived nancial

vulnerability, one of its major funders took the decision not to fund the

organisation in the 2010-11 nancial year.

The due diligence report left the CCS board uneasy about taking on

liabilities that Community Action would bring if the merger went ahead,

particularly as board members would be personally responsible given

Community Action was unincorporated. As such, the CCS board took

the decision that at this time, the business case for going ahead with the

merger was not strong enough – merger would be expensive and it would

be time consuming to deal with the liabilities.

“We got as ar as looking

at everything and then

saying ‘do we want to goany urther?’. The next step

would have been to go to

our solicitors and get advice

on what orm it [the merger]

would have taken, but we

didn’t get to that stage.”

STAOD





While the due diligence report was the ‘catalyst’ for the merger to be

abandoned, some other issues also contributed. The main challenge

identied was uneven levels of appreciation and buy-in to the merger

process by the two boards.

Another challenge was the timeframe the two organisations were

constrained by, meaning they progressed toward merger faster than

they otherwise might have done, bearing in mind the complexity of the

issues they needed to work through with their trustees. owever, neither

organisation cited this as having had any bearing on the outcome of the

process.

n the end, the decision was based on a mutual understanding. owever,

as a result of these events and the decision not to merge, the board of

Community Action took the decision to close down, immediately making all

staff redundant and winding up all trading activities. Both organisations weredisappointed by this outcome, but understood why the decision was made.

Positive aspects of the process

Although the merger was abandoned before completion, those involved

identied several positive aspects and outcomes of the process.

The staff away days worked particularly well. Through this process, both

staff teams engaged with each other well and as a result, were very positive

about the process and the merger itself.

Chief ofcers worked together and supported each other closely throughout

the process, which helped to give staff teams condence in the merger.

The process also made it necessary to carry out a detailed internal review.

n CCS’s case, this has meant that the organisation has been able to

address some of the issues that originally acted as motivations for merger.

or example, an internal assessment of efciency and effectiveness has led

CCS to undertake an organisational structure review and job evaluation

process, to ensure it has the right stafng structure and job roles for the

organisation.

CCS is also looking to adopt the strategic plan that was developed through

the merger process. Through this, they plan to bring in new opportunities,

posts and activities to their members. The process has also helped to

strengthen the CCS board of trustees, through engaging and working

closely with them throughout the process.

“The act that sta teams got

on so well was really goodand very important. We set

up 3-4 dierent sta groups

looking at things such as

how we can make savings,

how sta can work together,

TUP, communications/IT,

and fnance – so rom that

point o view it worked really

well”

STAOD

“[The organisational structure

review] was really pushed

ahead by the merger process.

That will strengthen us and

hopeully we’ll make some

efciency savings in the

uture.”

STAOD

“[CCS’s board] ended up

perorming much better as a

board and asking pertinent,

challenging and relevant

questions”.

STAOD



ESSOS EARE


• Be really clear at the beginning of your motivation for merger and keep that in mind throughout the process,

as it is very easy to lose focus as it can take a lot of time and effort

• Be realistic about timeframes for merger, especially when working with voluntary boards where it may take

time to fully communicate the process and its benets

• Be clear about how much time it takes and the time it takes away from day to day work. Working towards

merger is a sizeable commitment for the people involved

• Work very carefully with your board, as they have the power to make the merger happen or not. t is important

that they understand that and what the potential implications could be (e.g. change in Board constitution)

• acilitate joint board meetings early on in the process to discuss the merger and the whole process for each

board to get a better (and shared) understanding at an early stage

• t is important to bring staff teams together at an early stage and getting them involved in addressing some

of the practicalities and how things would operate under a new structure. This has the benet of keeping the

board focused on strategic issues rather than the detail – which staff are better placed to work through

• Things happen quickly from day to day, so it is important to keep everyone (staff, trustees and stakeholders)

up to date with developments as far as possible


1292416456_CCS_and_Community_Ac

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