2.1.6 In summary GCNS does not need to merge with Glasgow Metropolitan
College and Central College as the College is financially secure. However if it
does the opportunity would exist to
a) Consolidate Further Education provision across the Glasgow area;
b) Have greater flexibility in Curriculum delivery across the Glasgow area;
c) Potentially benefit from efficiency savings in bringing the three Colleges
together;
d) Potentially improve the results of external assessments and corporate
governance procedures through the sharing of the existing policies and
documentation with Glasgow Metropolitan College and Central College.
2.1.7 Prior to any merger GCNS, GMC and CC would have to be satisfied that:
a) The merger costs would be fully funded by the SFC;
b) The costs of upgrading the estates in respect of the Residences could be
funded, whilst still generating a financial surplus;
c) The overall merger savings would outweigh the merger costs.
2.1.8 If full SFC funding for the merger was not received this would give rise to
increased interest charges going forward which would have to be taken into
account in the financial projections. This would be as a result of external
funding being used to finance the merger rather than SFC funding.
2.1.9 The impact of the merger costs and the estates strategy for GCNS would have
to be taken into account in the detailed Business Case submitted to SFC.
2.2 Merged FFR Returns
2.2.1 CC, GMC and GCNS have still to combine the FFR returns to produce an
overall result for the combined college post merger. These financial
projections would have to include the financial impact of the Marine Skills
Centre and Residences.
2.2.2 We recommend that if the decision is taken to progress to the next stage:
a) GCNS, GMC and CC seek approval in principle from SFC for the funding
for the costs of merger. The costs of merger would have to be quantified
and would have to be fully funded by SFC.
b) GCNS, GMC and CC consider the potential increased depreciation charge
and interest charges if the future estates strategy is not fully funded by
capital grants.
Appendix 5: Due Diligence Executive Summaries
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