Many thanks for your comments on NEC.

The distance learning sector is passing through difficult times. There have already been a number of closures (of both good providers like Kevala, and the not so good that I won’t name) and others will probably follow.

It’s not uncommon to find good providers whose income has halved in the past five years and many names, big and small, are finding times tough. As we both know, there are FE colleges and even universities out there who are probably technically bankrupt, even if they are still managing to trade.

All are operating in a ruthlessly competitive environment. And NEC has had its problems. I’m not close enough to know what the root causes were; your suppositions may be right. What I do know is that something had to change; it couldn’t go on the way it was. And Ann Limb herself has said that (see http://www.tes.co.uk/article.aspx?storycode=6050442).

I see a sector splitting into two – the big boys, often owned by multinational corporations, like BPP and Kaplan and Cornelsen (who now own ICS, of course) – and beneath them a plethora of SMEs, many of whom are very much SEs and not MEs.

It is those that are struggling. I want a strong NEC: NEC was, and is, one of the best providers around. The question for me is simply how, pragmatically, to keep it strong.

Yes, the merger with LSN, indeed any merger, is high risk. There is a risk of losing the special qualities that make NEC such a good provider. If the brand is strong enough, NEC will prosper; that is, after all, in LSN’s interests as well. The question is, is the NEC brand, that particular blend of trying to serve the public interest within a private sector context, still viable?

I don’t know. I repeat, times are tough. But loss of the brand is not inevitable; ICS has come through quite a merry-go-round of ownership changes in the past few years, and emerged unscathed as a brand.

Perhaps there was an alternative to the merger. But it hasn’t happened. And as a supporter of NEC, I see my role as continuing to encourage all that is good about NEC, whoever owns it.

David

NEC is not a ‘public’ company as your blog suggests, it was set up and has always operated as a self-financing educational charity. It has never been dependent on Government funds and has therefore operated as a private company with a social mission. Exactly the sort of social enterprise that the present government is trying to encourage.

It is also worth noting in passing that it was through NEC’s efforts that the ODLQC was first established to provide consumer protection for students.

Our argument, supported by detailed and careful analysis and research, which we have presented to the current board of NEC trustees, is that NEC’s financial problems over the last 5 years have been mainly due to failures in leadership and management. And that NEC has adequate assets tied up in its site to recapitalise and restructure the College. We have offered to help to produce the recovery plan.

One piece of evidence to support this argument is that NEC’s core business of distance learning enrolments has held up well during the recent period, the major declines in income have come from the publishing and work based learning activities.

Why do we believe that NEC’s future will be better if it remains independent? One reason is that mergers and acquisitions are high risk and require a great deal of work and understanding of each other¹s business models to be successful. You just need to think about Kraft’s recent acquisition of Cadbury and in the ODL sector, the acquisition of the Open College and Henley Distance Learning by Pearson Publishing- both those companies have virtually disappeared within the larger organisation.

One of the significant features of an acquisition is that the assets of the ‘acquired’ company are used to support the future business development of the company leading the acquisition. LSN is an interesting and innovative organisation but its core business is based on a business-to-business model. It has little experience of direct provision of adult learning and no experience of distance learning .

It is also currently managing the acquisition of a number of other companies for example FE Associates and Learning Resources International. These other acquisitions are having to be integrated during a period when LSN’s core customers are having their own funding drastically cut.

Those of us who have hands on experience of distance learning know that success is built on the skills of dedicated course development, student services, tutor support and development. direct marketing and administration systems. Evidence suggests that it difficult to manage dual mode delivery systems well within one organisation, which is why traditional universities have not been able to compete directly with the OU.

NEC has survived for 47 years as a dedicated distance-learning provider, outlasting other competitors like Wolsey Hall, Rapid Results and Metropolitan College. It has a wealth of experience and expertise of working with individual students, all of which will be at risk of being lost in a merger. We think this is too high a price to pay when there could be a strong and viable alternative. We will certainly be tracking future developments closely.