Newcastle College and Carter & Carter

The 15-nation conference on progressive government hosted by the UK this week seems at first glance to have little if anything to do with such trivial things as the sale of the collapsed training giant Carter & Carter to Newcastle College.

In fact, this remarkable sale has everything to do with the way the Labour-led government views itself on the international stage – a powerhouse of public-private partnership through which it claims to have dispelled the old notions of “left” or “right” in politics and the marketplace.

What emerged under New Labour in 1997 as the Third Way - the path between the supremacy of liberal capitalism (rule of the free market) and democratic socialism (demand management and obsession with the state) – is re-emerging as, for want of a better phrase, Progressive Globalism.

Prime Minister Gordon Brown told the gathering of 300 leading international experts, policy makers, politicians and academics at his conference on progressive governance: "There is a need to combine economic dynamism with social justice.” And he wanted a new progressive vision, shared by institutions committed to globalistation.

So, how does his grand vision fit the aspirations of Jackie Fisher, principal of Newcastle College and its acquisition of Carter & Carter? She says she saw the purchase as “a fantastic opportunity to create a strong employer-facing business drawing on the strengths of both organisations".

But it is much more than this. To find out how much more, we turn to the words of the Foreign Secretary David Miliband who, in a series of timely press articles in the run-up to this week’s conference, fleshed out the domestic detail of Brown’s aspirations.

Miliband says there are five planks to Labour’s model of progressive governance: the environment (climate change), concerns of wealth and health in an aging population, educational opportunity, decentralisation of state powers and more equable management of what cannot be done locally.

It is on education that the issue of public-private merger really hit home. In an article for the Times, he said: “The curriculum and the way we accredit achievements must encourage innovation rather than stifle it. We should expect chains of schools and health services to emerge so that this innovation can spread to scale. A world-class headteacher should not be confined to managing one school. The mergers and acquisitions market in private services injects new ideas, people and capital. We need its equivalent in public services.”

Enter Newcastle College and a world-class principal, already and for some time in the acquisitions arena – that Miliband so desires for schools - with “global” aspirations to take over Middlesbrough College 200 miles away and the rest.

But huge questions remain around just how open and transparent such undertakings are going to be. When the Carter & Carter deal was done, the administrators, Deloitte, who were called in the rescue what they could of the collapsed company immediately drew a veil over the proceedings. Journalists with awkward questions were told it was a private company deal and all commercial information was “confidential”. Also, what was the precise status of Newcastle College as a corporation in the public sector? Wasn’t there a public right of access to information? Moreover, the acquisition of Carter & Carter was publicised as being done by “Newcastle College Group”. But inquiries at the time showed no such entity registered at Companies House. So, in whose name was the purchase made?

All this might not mater but for two things. First, a huge chunk of Carter & Carter remains unsold and still a debt liability to the public purse of around £130m. The company which, at its 2005 peak had an estimated worth of £526m, ended up in October at around £34m, following the untimely death in a helicopter crash of its director Phil Carter. And, anyway, where did Newcastle College leverage the cash to buy what was described only as “a substantial proportion” of the company in the first place?

Second, go back and look at the Nolan report on probity and the public sector. Look at the issues around franchising in the 1990s that drew further education into the fray and gave colleges a damaged reputation that they are still trying to shake off.

This is no reflection on the current deal or wider ambitions and aspirations of Newcastle College. After all, who is to say a deal that rescues the prospects for 24,000 learners globally left otherwise high and dry by the collapse isn’t a good one. And it could be a big fillip for the public sector if it is seen to be teaching a substantially private market a lesson.

No, the key issue here is just what does “new” New Labour’s vision of progressive governance amount to? Mark Haysom and David Russell at the Learning and Skills Council have promised all who ask “openness and transparency” over the Newcastle-Carter deal. They must be held to that, just as Brown and Miliband must clearly show that the five planks of progressive governance are not purchased with public finances over which there is ever diminishing public scrutiny.