Doubts raised over merger

July 13, 2001

Governors of London Guildhall University have voiced doubts over its proposed merger with the University of North London.

Minutes of a board meeting held in mid-June, seen by The THES , express concerns about UNL's financial position and criticise the lack of caution and consultation over the merger.

"Concerns were expressed over the current financial position of UNL," say the minutes. "The view was expressed that the university (Guildhall) had successfully implemented its painful recovery plan and should not risk its current financial stability in a partnership with an institution which was not equally financially stable."

The governors criticise a paper on the merger. "It contained no discussion of the risks or disadvantages... the paper did not contain a market analysis explaining where the growth would come from. Unless there was overall growth, becoming a larger institution would not be an advantage."

The minutes continue: "The importance of quantifying the benefits which might be achieved from a merger was stressed. It was essential that the merged institution should be richer than the two separately. If this was not to be the case, the alternative was retrenchment, since there were no other sources of funding."

The board was critical of a lack of consultation: "Since widening participation was important to the project, consultation with the local community should be fundamental. The point was strongly made that the lack of such consultation to date was most regrettable."

London Guildhall's branch of lecturers' union Natfhe is also worried about UNL's financial position. A newsletter says it is a "cause for concern".

And in a financial analysis, the branch says: "The accounts seem to indicate fairly strongly that there may be an impending liquidity crisis at UNL and that seeking a partnership with a strong institution would be a good idea. Unfortunately, we do not really live up to that description."

The minutes of the board meeting suggest that the University of East London, which is to form a strategic alliance with the two universities, was originally under consideration as a merger partner but that the Higher Education Funding Council for England would not support the move.

"The provost stated that he could not advise the board to explore the possibilities of a merger with UEL at the current time because of the very difficult financial situation they found themselves in," say the minutes.

"Hefce would not support such a merger. However, a strategy of keeping options open for the future could be met by means of a strategic alliance," they add.

A committee formed by UNL and London Guildhall will report on the case for merger in October.

A statement from London Guildhall said: "A board meeting without lively debate on such an important issue would be a poor state of affairs."

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