Mergers need strong leadership from the outset

An Audit Scotland report, Learning the lessons of public body mergers, looks at nine mergers that took place between 2008 and 2011 under the Scottish Government’s programme to reduce the number of national public sector bodies by 25 per cent. During this audit, Audit Scotland carried out detailed examinations of four mergers; the creation of the Care Inspectorate, Creative Scotland, Marine Scotland and Skills Development Scotland.

The report finds that most recent mergers happened on time, but that permanent leaders were not always in place early enough. There were gaps in the planning for new organisations’ later development, some organisations were operating for too long without a clear vision and plan, and other important decisions were delayed.

It is not possible to confirm the total costs and savings of mergers to date. However, the four mergers Audit Scotland examined in depth have reported costs of £42 million so far, which is more than the £30 million initially forecast. Although costs have been higher than expected, these mergers have led to staff restructuring and significant reductions in staff costs.

With 60 per cent of mergers happening in the past two years, it is too early to see performance improvements. Looking ahead, merging bodies need greater clarity about the intended benefits of merger, their current performance and how to measure whether this improves.

Auditor General for Scotland, Robert Black, said:

“Scotland’s public sector has undergone significant reform in recent years. There are also major changes to public bodies ahead, such as the creation of single national police and fire and rescue services and possible mergers of further education colleges. It is important that all involved with such changes learn the lessons from recent mergers. To help with this, we have published a good practice guide which draws on the findings of our review of recent mergers.

“The experience of recent mergers has shown that it is vital to have strong leadership in place as early as possible. This means important decisions can be made and the new organisation’s plans and structure can be developed in advance of the merger. This has been a weakness in recent mergers, which has resulted in new bodies operating without a clear vision and with important decisions on matters such as goals, business plans and staffing being delayed.”