Creating a positive unified culture can be one of the biggest challenges when implementing a merger. Here are some key questions and top tips for a smooth transition
GROWTH, DEVELOPMENT & REGENERATION
Director, Campbell Tickell
Issue 66 | June 2023
The number of local authorities is reducing across England. From April this year, 20 councils were replaced by four unitary authorities in Cumbria, North Yorkshire and Somerset. This is in addition to the new unitaries that were previously formed in Dorset and Northamptonshire.
In part, these changes have come in response to the Government’s devolution agenda, with the prospects of new powers, some new funding, and potential new opportunities at sub-regional level. These mergers reflect attempts to fix failing services and financial challenges by achieving efficiency of scale.
Yet merging two or more councils requires complex change programmes. At Campbell Tickell, we are well versed in what it takes to make mergers a success – we have worked on a considerable number of mergers between housing associations, social care providers and charities. We have also engaged with a range of combined authorities and joint council structures and initiatives, helping them deliver more effective integrated services.
Clearly, the merger environment for local authorities can prove even more complex than in other sectors, given the democratic local political dimension and central government hovering overhead. Councils, especially larger boroughs, can feature significant differences internally, let alone when several previously separate authorities come together.
Ingredients for a successful merger
In planning for a successful merger, there is a long list of must-haves, which should include:
- An overarching vision for the combined organisation;
- A clear roadmap to merger and integration;
- A combined project management and delivery team;
- Understanding of the combined asset portfolio;
- Comprehensive due diligence to understand the liabilities and risks (both open and latent);
- Assessment of financial viability of the combined organisation;
- Review of contracts and policies;
- Staffing conditions, salaries, harmonised job descriptions;
- Clarity on Transfer of Undertakings (Protection of Employment) (TUPE) obligations;
- Clarity on new structures and governance arrangements;
- Ensuring IT systems will talk to each other.
Crucially the planning process must ensure that service delivery to residents and customers continues and improves. All these activities need to be carefully planned and resourced with sufficient leadership capacity, and backfilling where needed.
Creating a unified culture
What is more difficult though is to create a unified culture that enables what were disparate organisations and services to come together, provide a positive work environment and deliver a quality service to customers. It is difficult enough when change is required in a single organisation, let alone bringing together organisations with different cultures, which will commonly be long-embedded.
How do you develop a culture that is confident, conscientious, values-driven, and which demonstrates the golden thread throughout the organisation? Will the new organisation be inclusive, fair, and accepting of diversity? Will it encourage teamwork, be flexible, devolve decision-making where possible, so it is not just top-down but also bottom-up?
It is important to ensure that inefficient silos that may have existed in the previous organisations are not replicated when the authorities are unified – a task which has been made more difficult in the post-Covid world of hybrid working.
The starting point to deliver a positive unified culture, is to understand where each organisation is coming from. Here are some of the questions that need to be examined:
- Do the two councils share a similar outlook in terms of what they are seeking to achieve through merger?
- Is there broad alignment in managing and mitigating risk, achieving business assurance and compliance?
- Do they agree on their governance structures?
- What do they see as the right pace for integration?
- To what extent do members and executives operate as a combined team?
- Is their decision-making focus top-down or bottom-up? How empowered are staff?
- How diverse are their leadership teams?
- How do they encourage and support diversity and inclusion in their communities?
- How do they communicate, internally and externally?
- Do they lean more towards outsourcing or insourcing the delivery of critical services?
- Do they really understand what their own culture looks like?
While the overall vision is critical, you will need an operational strategy with plans that are filtered to all levels. Strong teamwork and a supportive environment contribute to job satisfaction and effective delivery. Middle managers are key to delivery and are often the ones who are least satisfied – as they get squeezed from above and below, affecting their ability to make decisions or empower their teams.
At times of austerity, training programmes often get cut, but continuous training and development reaps rewards. This applies both to job-specific training and management skills. Valuing and supporting your staff is crucial, together with understanding your organisations’ cultures, and developing coherent and effective means to bring these together and create a single unit.
“Middle managers are key to delivery and are often the ones who are least satisfied – as they get squeezed from above and below.”