EcoLogics

This week it was announced that Carter & Carter is going into administration. The company began to fail after founder and CEO Philip Carter’s death in May 2007. Carter was returning home with his son and two friends after watching a Chelsea game when his helicopter crashed close to the Carter estate.

The media’s descriptions of the company throw into sharp relief the critique that this blog has offered of the ‘symbiotic’ partnership that was nearly instituted between the company and the University of the West of England’s (UWE) former vice-chancellor, Howard Newby. As part of his scheme to vocationalise higher education at UWE, Newby tried to give Carter & Carter a contract, presumably to train staff at the university, or perhaps to ‘outsource’ some of its teaching. As EcoLogics has noted in several of its posts, the scheme was eventually aborted, but not before a potential conflict of interest was noted by UWE staff and by Private Eye, which published a short piece pointing out that Newby was a non-executive director of Carter & Carter(1).

The Guardian described the company as ‘a former stockmarket darling that runs government-backed training schemes’(2). Little wonder that its value rose from £100m in 2005 to £526m at its peak in April 2007. The newspaper confirmed that the bulk of the company’s work was for the Department of Work and Pensions and for the government’s Learning and Skills Council. Carter and Carter also trained apprentices for companies like Ford and Audi. It seems clear that the while the early success of the company was a result of a radical change in direction from automotive repair to car repair training schemes, the firm’s phenomenal growth in recent years owed much to New Labour’s de facto policy of corporate welfarism. As described by The Independent,

‘Carter & Carter started out in the early 1990s as a niche service-provider to the automotive industry. It grew rapidly, securing outside investment from Bridgepoint Capital in 2001 and more than doubling in size two years later with the purchase of Emtec, which offered technical services and support to the automotive industry. […] Investors responded well to an aggressive expansion strategy, which included the purchase of the AA’s technical services operation just a month before Carter & Carter went public in February 2005. […] The shares were offered at £2.35 in the company’s initial public offering – valuing Carter & Carter at about £78m – and the price rose by 25 per cent on the first day of trading. […] The following August, the company diversified with the purchase of training group Assa for £24m, which took it into the transport, aerospace and food and drink industries, and into the government-funded vocational training market. Acquisition of the Fern Group, a leading provider of training under New Labour’s New Deal programme, took the firm further into the public sector. […] By April 2007, shares were worth more than £12, valuing the company at more than £550m’(3).

According to Guardian things started to go downhill after Philip Carter’s tragic death. ‘The profit warnings during the summer followed the group’s failure to secure any of the government’s first phase of Pathways to Work contracts and poor uptake of the government-funded Train to Gain vocational training schemes.’ ‘In November it had to return government payments for tuition at its North East Skills unit after an inquiry found falsification of some supporting documentation.’ The Independent also notes that ‘…PricewaterhouseCoopers, the company’s auditors, announced an investigation of accounting irregularities for the year ending 31 July 2007.’

Events are, of course, always easy to re-interpret with the benefit of hindsight. While UWE will perhaps now be relieved that the partnership did not go ahead, EcoLogics is more interested in the light that Carter & Carter’s corporate history sheds on New Labour’s efforts to impose the skillification of higher education via corporate welfarism. As noted in earlier posts, the existence of privately-owned, but virtual public sector monopolies such as Carter & Carter shows up the fallacy of the notion that New Labour’s neoliberal policies really champion so-called ‘free markets’.

EcoLogics would argue that it also reveals the extraordinary risks that Newby/UWE were willing to incur. It is in this sense relevant to quote two paragraphs from the third part of the series of posts titled ‘Lord Leitch’s Levers’:

‘Universities that go down this route [the route of the skillification of higher education, with firms such as Carter & Carter] would be forced to compete for what is, in temporal terms, at once a rather short-lived form of funding ‘per capita’, and a recipe for much additional administrative work. If my experience at UWE is anything to go by, the most traumatic times of the year for both staff and students are always the beginnings and endings of academic courses, when induction procedures or end–of–course marking really concentrates the work for students, academics and academic-related staff. If the government has its way, and if Newby’s keenness on CPD prevails, the number of ‘beginnings’ and ‘endings’ might increase exponentially. But presumably lecturers and admin staff would still be paid the same relatively low salaries to do more and more administrative work, and to spend more of the year doing it. Indeed, if one recent conference (‘Universities: Public or Private?’) is anything to go by, universities might fully privatise themselves to ensure a greater ‘flexibility’ on the part of their staff. No doubt such a ‘flexibility’ would be required to impose more and more draconian work conditions.

Second, this self-same process would almost certainly mean that, far from securing its finances, the university would, if anything, be even more exposed, albeit, now to the vicissitudes of skills ‘vogues’ and to economic downturns more generally. What nobody in the UWE board of governors seems to have figured out is that ‘demand-led’ means that the educational provider loses a great deal of control over the educational process. The provider is now subject to the whims of corporations who demand this or that product, and do so when it suits them. In effect, by putting all of its educational eggs in the business skills basket, the educational provider ties its institutional fortunes to entities that are likely to be as ruthlessly determined to have things their way as Newby was to transform UWE into a UWE-KE.’

What this analysis failed to mention was that in a context of corporate welfarism, a university like UWE would also be exposed—as exposed as Carter and Carter—to the vicissitudes of political patronage. It appears that after Philip Carter died, New Labour lost interest in Carter & Carter. Will it have lost interest in UWE now that Newby has left for Liverpool? And will it lose interest in Liverpool once Newby leaves for his next job?

References

(1) Private Eye, 1185, 25 May-7 June, 2007.
(2) ‘Carter & Carter goes into administration’ in The Guardian, Tuesday March 11, 2008, at http://www.guardian.co.uk/business/2008/mar/11/2?gusrc=rss&feed=politics, accessed March 13, 2008.
(3) ‘Struggling Carter & Carter goes into administration’ in The Independent, Tuesday March 11, 2008, at http://www.independent.co.uk/news/business/news/struggling-carter–carter-goes-into-administration-794063.html, accessed March 13, 2008.