Is Consolidation the Further Education? | KPMG | QA

Horizontal Integration

Is Consolidation the Further Education?

With the Further Education sector undergoing constant changes, the landscape is very different to what it was like several years ago and the future looks very different to what it does today. We’ve asked Martin Chapman, Director, KPMG in the UK, “what is the single best survival strategy for and FE institution”, his views are interesting and look at how horizontal integration could be key for an institutions success.

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With an underlying link to the fundamental principles of Economies of Scale, many FE institutions find that their size is often a contributing factor towards hampering growth, investment and success as their critical mass prevents them from implementing their service provision effectively. 

Horizontal integration however takes advantage of these economies of scale through one or more mergers, increasing the organisations size and providing better influencing powers with external stakeholders, and allowing the institution to consolidate, reducing the cost per learner. For Martin, horizontal integration is the single best survival strategy which an FE institution could adopt to add value to their local environment.

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