The number of charity mergers increased by more than 30 per cent last year, latest figures show.

The Good Merger Index, published today by the consultancy Eastside People, found there were 63 mergers involving 131 organisations in the year to the end of April 2024, a 31 per cent increase compared with 2022/23.

In 2023/24, the total value of these deals reached £192m, a more than 500 per cent increase on the previous year.

The figures show an increase from the record low levels of merger activity found last year. 

The Good Merger Index focuses on charities and organisations based in England and Wales, although some significant mergers are included involving organisations from outside this region.

The report says 65 organisations with annual incomes of less than £1m were involved in mergers, compared with 59 in 2022/23 and 50 in 2021/22. 

By contrast, 115 were involved in mergers in 2020/21 and 84 in 2019/20.

The total value of organisations in this year’s report was slightly more than £1bn, a £547m rise on the previous year.

This translates as a 113 per cent increase in total value from 2022/23 to 2023/24, in the context of a 31 per cent increase, the report said.

The most prevalent merger type continued to be takeovers but there has been a proportional increase in the number of mergers of equals, group structures and subsidiary models in 2023/24.

Mergers of equals have increased from 8 per cent in 2022/23 to 16 per cent in 2023/24.

This year’s report also notes the trend in independent school mergers.

“While this data captures mergers prior to the VAT change and the certainty it would happen, there are nine school mergers in the top 20 (compared to one last year), indicating a clear trend towards consolidation in this sector,” the report says.

“Identifying mergers is a key challenge for this research, as there is no definitive definition or list of mergers across the social sector, and many mergers that are listed are a result of internal reorganisations,” it says.

Cara Evans, head of partnerships and mergers at Eastside People, said: “Over the last 12 months we have seen a greater than 30 per cent rise in the number of merger-related projects managed by our consultants.

“Additionally, there is an increasing interest in using merger as a strategic approach to achieving sustainability against a background of growing demand and rising costs.”