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Cas and MsVlnay Acn

Talks about a potential merger rst emerged from an early partnership

working agreement in 2005. It was apparent at this time that there was a lot

of duplication in the sector, for example, two representatives normally in

attendance at local strategic partnership meetings. As Scarborough CVS

and Whitby VA were both small organisations, both wanted to address

duplication in their workloads. Both parties also wanted a single and

stronger voice for the voluntary sector in the area.

Both organisations could see that

nancial efciencies could be made

through a merger. By cutting down

on the strategic and back ofce

functions, chief ofcers and nance

departments, they could move more

resources into the delivery of front

line infrastructure services.

The two organisations had

also established good working

relationships over a period of ten

years. More recently they worked

on a joint project (funded through

Capacitybuilders ChangeUp grant)

looking at possibilities of closer

collaboration, initially with a further

neighbouring CVS. Trustees were

very positive about the idea and by

the end of 2005, both organisationshad established partnership working

arrangements and some joint project

funding arrangements.

LAI M MS - T CAS STUIS

SCArborough, North YorkShire

Coast and Moors Voluntary Action was formed in 2007 as the

result of a merger between two former CVSs Scarborough

istrict CVS and Whitby and istrict Voluntary Action (Whitby

VA). Prior to the merger, both CVSs were operating in one

district, the Borough of Scarborough on the orth Yorkshire

Coast, a large area with a mix of urban and rural communities.Whitby VA covered the north, while Scarborough CVS covered

the south of the district.

The VCS was not together. There

were two sets of memberships, but

some organisations worked across

the whole of the borough. We

wanted one voice and a clear set of

services for members.

C xCTV OC, COST

MOOS VOTy CTO

Our joint working arrangements

had been going ver well and

we felt that merger would bring

benets of economies of scale,

efcienc savings of a single

organisation and that we would be

better able to represent the third

sector. Our relationship was such

that we felt it could work.

C xCTV OC O

CSSO WTy & STCTVOTy CTO, OW TS

M, COST MOOS

VOTy CTO

The two

organisations

cooperate over

the course of at

least 10 ears, with

partnership working

intensifing in 2005

Organisations

undertake due

diligence and

consultations with

staff and members;

changes are made

in the organisational

structure and abusiness plan

for the new

organisation is

prepared

reparator scoping

work

ealy 2006

Chief ofcers

discuss possibilit of

merger

May 2006

Organisations

agree in principle

to merge; shadow

board established;

new chief ofcer

appointed shortl

after

Fay 2007

traordinar

general meetings

at which membersvote in favour of

merger

1 Apl 2007

Merger dateost-merger phase

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CoASt AN MoorS VouNtArY ACtioNPa 2LAI M MS - T CAS STUIS

The decision to merge

In early 2006, the two chief ofcers held talks to progress the merger

proposal. They then held initial conversations with their respective trustees.

In May 2006, the organisations agreed in principle to go ahead with merger.

ne of the rst things the organisations did was to consult a lawyer with

experience in mergers. Whitby VA was an incorporated body (limited by

guarantee) and Scarborough was unincorporated and a registered charity,

so they sought advice on appropriate legal form for the new body and

how to merge given their different status. Securing legal advice at this

stage gave trustees assurance that they were on the right path from a

governance point of view. Very early on in the process the lawyer held a

brieng for both sets of trustees individually to talk through the process

and answer their questions.

The legal form of the merger was decided at an early stage. Because Whitby

VA was already incorporated, it was decided that it would in effect take

over Scarborough CVS and then change its name and nature to reect the

new organisation. This would be the most straightforward legal process, as

there was no set up of a brand new company structure, and Scarborough

CVSs assets and liabilities could be transferred easily. This option was

chosen even though Whitby VA was a much smaller organisation, both

nancially and in terms of staff capacity. Because this was agreed very early

on, it then helped the organisations to map out the rest of the merger

process.

The merger process

The chief executive of the new organisation was appointed at an early

stage, so it was very clear who was leading on the process and responsible

for its progress. This was an internal appointment, with the chief ofcer

from Scarborough CVS taking the role, but both chief executives worked

closely together to drive the process.

The aim was to merge on 1 April 2007, which gave the organisations one

year to complete the process. This timeframe was achieved.

As a next step, the organisations looked at their stafng structure. The

merger provided the opportunity to create a more efcient organisation

and to put more resources into service delivery. A consultation on a new

structure was carried out with staff in May 2006. A condential external

mentor for staff was brought in something that the organisations felt was

very important. Some 45 staff members were affected by the restructure,

either directly or through their line management. Some redundancies

were made and new teams established. The stafng issues were all dealt

with by autumn 2006, so it was decided that the new structure would be

implemented on 1 January 2007, prior to merger.

The structure included a new enterprise team to focus on developing

business, new ideas and maximising income generation. The previous chief

ofcer of Whitby VA became the new enterprise manager. A membership

t was like the small sh

swallowing the big sh.

ut this was just done as a

legal device and everone

understood that.

C xCTV OC O

CSSO WTy & STCT

VOTy CTO, OW

TS M, COST

MOOS VOTy CTO

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CoASt AN MoorS VouNtArY ACtioN


and partnership team and corporate services team (providing back-ofce

support) completed the structure, and the three team leaders joined the

chief executive to form a senior management team. This marked a departure

from the previous at structures, where the chief ofcers provided most of

the line management support for all staff.

nce the stafng issues had been dealt with, a clear timetable was set up

outlining every key activity that needed to be done. They key things on the

list included rebranding and IT redesign.

The two organisations had completely separate IT systems in place.

Consultants were brought in to design and deliver the system changes

and provide IT support during the rst year of merger.

The new branding was found to be challenging as both towns involved

have very strong identities. The organisations decided not to incorporate

the names of the towns into their new brand, but took the opportunity

to establish a new name that reected the area but at the same time was

neutral. The new name was established in discussions with both staff and

trustees. esigners were invited to pitch for the new logo and branding.

unding of 20,000 was secured from Capacitybuilders through orth

Yorkshire and York Infrastructure Consortium, and was used to help towards

legal fees, rebranding and IT redesign.

A new business plan for April 2007 and beyond was drafted and agreed.

It was a radical departure from the legacy organisations business plans

and provided the new organisation with the opportunity to start afreshand focus on sustainability, maximizing efciency, generating income and

becoming less reliant on grant income. ther key features of the business

plan included:

nsuring support and development services to the sector were

effective and delivered across the whole Borough (two sites in Whitby

and Scarborough)

unning community buildings and contributing more to funding VCS

development and support services from self-generated income

Building and running a new 1.5million community building, the

reen Lane centre in Whitby

Laying out realistic project management fees, to generate income to

cover organisational overheads

Trustees were engaged and involved right through the merger process. Bi-

monthly meetings were held with the two boards, which were presented

with recommendation reports to enable them to make key decisions at

every stage. In July 2006, a shadow board was established, comprised of

four trustees from each existing board, which eventually became the board

for the new organisation. The trustees not involved in the shadow board

resigned on 31 March 2007.

Communication with staff and frontline organisations took place throughout

the process. orums were held with member organisations to ensure that

they understood the process and a detailed member survey was conducted

This funding was reall

helpful. t demonstrated

we had backing from

Capacitbuilders and the

Consortium and made it

possible for us to do a

thorough and professional

job in these areas.

C xCTV OC,

COST MOOS VOTyCTO

The planning process gave us

the opportunit to re-assess

the needs in the sector and to

incorporate a gap analsis so

that we could look at projects

that could meet unmet needs

in the communit. ts more

pro-active - quite a radical

rethink.

C xCTV OC,

COST MOOS VOTy

CTO

t was a good process a lot of [the trustees] had

been around a long time, so

were happ. The decided

it between themselves, and

identied four who wanted

to invest a few more ears

in taking it forward. So the

shadow board focused on

the future branding, new

organisation etc. The rest

dul resigned and the new

trust started.

TST, COST MOOS

VOTy CTO

Pa 3

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in September 2006. ewsletters were sent out and press coverage helped

to familiarise local organisations with the new brand.

In ebruary 2007, two months prior to the merger, extraordinary general

meetings of the two predecessor organisations took place. These were

to formally agree the transfer of assets from Scarborough CVS to Whitby

VA, and for Whitby VA members to agree the changes. ew memoranda

and articles were prepared for the new organisation, with assistance from

lawyers.

Success factors and benets

Merger has led to some nancial benets for the new organisation. Although

saving money was not a specic motivation, benets have been accrued in

terms of efciency, diversifying activity and building in sustainability.

Positive relationships have been built, particularly with the Borough Council

and the local strategic partnership (LSP). Through establishing the new

organisation, Coast and Moors Voluntary Action has improved its prole

and established a new brand in the area. Through new work and service

delivery it has built a good reputation with stakeholders. Coast and Moors

is now regarded as a bigger player, and on the back of this has the ability

to secure more funds.

The merger has enabled the organisation to support more local voluntary

organisations in Scarborough and Whitby, through increasing delivery ofgeneral support and reaching more groups. Coast and Moors also feels

that its increased visibility means it has raised the sectors prole and can

represent the sector better.

The merger has enabled Coasts and Moors to do something new and

different with CVS. They have built in sustainability, income generation

and enterprise, something that they feel two smaller organisations would

never have had the resources to do.

A success of the process was the way in which the board was fully engaged

all the way through. Trustees felt involved in the whole process, and as aresult are now very engaged in the new organisation. The board is now

deliberately smaller (nine members compared with 12-15 in each of the

previous organisations), regular monthly meeting continue to take place

and attendance is exceptional. Trustees are very bought in to the new

organisation and business plan.

We can appreciate the

benets its brought to the

organisation e.g. one clear

voice [for the sector]. rom

a partnership perspective a

good relationship has been

maintained. We continue to

do joint working and Coastand Moors is ver active in

the S

COMMTy TSS

M, SCOO

OO COC

Our aim is to spend more

and more through generating

income. t hasnt been a

downward trend we want

to be on an upward trend. We

want to do more.

C xCTV OC,

COST MOOS VOTy

CTO

ublic bodies now come to

us and ask us to do things

because weve shown we can

deliver. We now have good

track record

C xCTV OC,COST MOOS VOTy

CTO

verone attends meetings,

its ver rare that people

dont show up. verone feels

involved in process we still

meet monthl. eople feelinvolved, know whats going

on this is ver important

TST, COST MOOS

VOTy CTO

Pa 4

Challenges and pitfalls

ne of the key challenges was the additional workload that the process

placed on chief ofcers. Because a lot of the work was condential,particularly regarding stafng issues, they were not able to delegate much

of this work to wider staff. They found it difcult to engage staff in some of

the work because of the restructure that was taking place.

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eSSoNS eArNe


Be very clear about why you are doing merger in the rst place and understand what you want to achieve

before you start. Because theres so much work involved, you have to be sure. Ask yourself is there another

way, such as collaboration, to consider rst?

A good cross organisational relationship to begin with is benecial so theres no unfamiliarity and you know

you can work together.

Make sure you have full commitment from all parties at all levels trustees, management and staff. Its a non

starter if there are any doubts.

et support from members and stakeholders in the sector so you are working altogether with one voice.

et good legal advice started very early and speak to lawyer to help resolve unanswered questions you may

have and ensure you are on right path this saves a lot of uncertainty and gives trustees assurance.

et good advice, good communications and good processes.

Plan with appropriate timescales - things shouldnt be rushed.

A very clear business plan means that staff are clear and understand the process. Staff and trustees need to be prepared to put in lots of extra hours!

Merger can bring so many new opportunities, some unexpected be prepared to seize them.

Use the full year before the merger to get things right in terms of governance, management and stafng.

Strong leadership is really important having a chief ofcer leading the process who is capable, competent

and business-like was seen to be hugely benecial and brought a fresh, different approach.

Pa 5

It took quite a long time to align staff contracts after the merger, and a small

number of staff who remained in post felt upset about the redundancies

that had been made. Such things had to be managed carefully after the

merger.

ccasionally legal issues crop up from time to time. or example, the old

Scarborough CVS charity has not yet been dissolved. It doesnt have any

assets or liabilities, but because it is such an old organisation (formed in

1913), there were still some issues to be tied up after the merger, such as

grant agreements.

The organisation also has to address a perception by some voluntary

organisations that since the merger, Coast and Moors has become a large,

well nanced organisation and has lost its more traditional roots as a

voluntary sector organisation. Its more professional, modern and outward

looking brand contributes to this perception. Coast and Moors are workingcarefully to manage this perception, but it is proving a tricky balancing act

between being visible and trying not to send out the wrong message.

or further information about this case stud, please contact:

Stephanie Sturrock, Chief ecutive, Coast and Moors Voluntar ction

01723 362205 [email protected]
mailto:stephanie.sturrock%40coastandmoors.org?subject=mailto:stephanie.sturrock%40coastandmoors.org?subject=

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