PAG Explains: Trust Mergers

PAG Staff2022, Article, Governance, Leadership, online resources, Schools

PAG Explains: Trust Mergers

Following the release of the White Paper back in March, mergers are the talk of the day. The DfE are now not only proposing academy conversions but encouraging smaller MATs to become larger. In response, PAG’s clients are now commonly asking us about how to prepare for a merger discussion.
PAG has a proven route to guiding MATs through identifying and choosing partners to merge with, and guiding Trust Boards through thinking about and signing-off on mergers. It can be a complex job, so for now, let’s set aside finding partners. Rather, we hope that this article might give you a guide as to how to go about presenting the concept of a merger to your Trust Board.

The operational process of merging two MATs itself is analogous to the process of a conversion – and that should be unsurprising, as a conversion is just a merger with some additional organisational change work attached.

The really interesting and unique discussions in mergers come before the merger process starts, though. It’s in the negotiations and agreement between the two Trust Boards – two Trust Boards full of Trustees who, for many of them, will need to be agreeing to give up their roles and change an organisation and community they are deeply committed to.

Proposing the merger to the Trust Boards

As with most things, success comes from being open, communicating clearly the process to all Members and Trustees, and having a real plan for what the merged trust could look like.

Typically, it’s good to get it all on paper. A good group of Trustees will ask for a comprehensive explanation of the information they need to make an informed decision regarding their future trust growth. As this is the information needed for the application to the Advisory Board, at a minimum, it should require details of:

• Selecting the continuing Members and Trustees from each trust
• The proposed governance structure for the trust
• The process of merger – i.e., whether one trust will join another, or whether a new trust will be created
• The rationale for the merger
• The financial policies to govern the new trust and ensure sustainability going forward.
As well as the above, it is useful to include any other items your Trust Board may want to know before making decisions on potential mergers. PAG has a list of things commonly asked for, if you’d like to chat it over.

The agreement of Trustees isn’t all, though: for completeness, we should list that before submitting that application to merge to the Advisory Board, you will also need:

• A successful community consultation
• Proper due diligence to have been undertaken, and not raise insurmountable issues.

The ESFA will also conduct due diligence on both of the merging trusts.

Knowing what you’re agreeing to

The really key thing to emphasise to Trustees, though, is what any agreements they make actually mean. Agreeing with the details listed above does not mean agreeing to merger. Rather, it means agreeing to the next steps in the process – in this case, agreeing to go to consultation.

Mergers sometimes fall down when stakeholders are asked to make the big decisions too soon, and without fully understanding the role of their decisions within the consideration of the merger. They work when the Trust Board and CEOs agree to only commit to the next piece of work, and everyone feels that the process has been communicated to them at every step in the process. That way, everyone is happy – the CEOs get a chance to outline their visions and move the process along, and the Trust Board get a chance to genuinely scrutinise and contribute to the merger in line with their strategic vision and subject to their oversight.

To find out more about how PAG can support with trust mergers, you can get in touch with us here or email us at