The sale of the bulk of failed training company Carter & Carter's Train to Gain business to Newcastle College throws up some interesting conundrums that, given that those involved are keeping schtum, could do with a shotgun-toting Michael Caine to unravel.
For example how much taxpayers' money has England's biggest quango, the Learning & Skills Council, pumped into Carter & Carter? Did the LSC intervene when Carter & Carter become a basket case? Isn't this another Northern Rock? Where did Newcastle College get the money from to buy Carter & Carter?
Indeed has Newcastle College paid very much at all for the bits of Carter & Carter it has acquired?
British movie buffs will have felt a deep sense of irony at Newcastle College getting Carter & Carter. Did the eponymous hero of the cult gangster flick have a twin or two younger brothers? Er, obviously not, but it's symmetrical that instead of Carter sorting out Newcastle ne'er-do-wells, it's Newcastle dealing with ne'er-done-very-wells doon Sooth, like.
It sounds like a steal for Newcastle College. It won't say where the funding for the C&C purchase has come from but it's either bank loans, public funding or both. Its last posted accounts, for the year to July 31 2006 - I was told those for 2007 weren't available though had Michael Caine turned up with a shotgun perhaps it would have been different - showed turnover of £65.7 million.
The college says that post the Carter & Carter acquisition its annual turnover will reach £150 million, up about 127%
I guess we'll have to believe Newcastle College when they say that they paid for Carter & Carter "through access to banking arrangements like anyone else." Well colleges certainly aren't like businesses. The latter don't get most of their income from grants and tuition fees unless they're in the Train to Gain business, like, well, like Carter & Carter.
Newcastle College's turnover for 2005-2006, the last year for which accounts are available, was £59.3 million. Over £49 million of this came from grants, local, national and EU-related and £14 million from fees - £63 million. The surplus - ie profit - for 2005-06 was almost £6 million.
After the Carter & Carter acquistion the college says its turnover will be £150 million, a 127% rise on 2006's, oddly an increase not out of line with the rise in Carter & Carter's debt which is heading north of £150 million.
Once again, like Northern Rock, we see the public purse coming to the rescue of a struggling quoted company - only this time the rescuer has ridden from north to south. The Carter & Carter debacle casts a shadow over using public money to pay for training provided by the private sector.
Perhaps that's a major reason why the Government has decided to wind up the LSC and direct skills funding to local public bodies and institutions.
Comments (1)
A lot of good comment and insight John.
You may or may not have caught my comments on this recently on my blog - HC Global (http://www.personneltoday.com/blogs/hcglobal-human-capital-management).
We were one of the few who actually looked over the C&C carcass. Having reviewed the numbers we decided we couldn't bid £1 for the business given its 'blackhole-ness'.
I trust that this provides further support in your argument.....
NJH
Posted by Nicholas Higgins | March 28, 2008 10:56 AM
Posted on March 28, 2008 10:56