The biggest high-street provider of Learndirect courses in the country has shut up shop, claiming he was forced out of business in a row over funding.

The Sutton Court IT Centre in Birmingham closed its doors last Friday with the loss of 40 jobs and with 3,500 learners on its books.

Peter Bennett, the owner, says he is a victim of his own success. He was providing 60 per cent of the courses in Birmingham, and was entitled to 60 per cent of the Learndirect’s pound;6 million budget.

“That left just 40 per cent to be shared between the other 23 Learndirect centres in the city. Clearly there were people who had a problem with that,” he said.

He said that since opening the Learndirect centre at his hotel in Sutton Coldfield in September 2000, the business has grown from six computer stations to more than 100. But Mr Bennett said that his monthly cheques from the Birmingham and Solihull Learning Exchange, the “hub” that finances the Learndirect centres with cash from the Learning and Skills Council, dried up last October.

With a wage bill of pound;70,000 a month, he could no longer afford to stay open, he added, and last December he had to lay off 32 of the 50 full-time staff and 15 part-time workers. He has since made another eight redundant.

He claims that up to last month he was owed pound;700,000 and received just pound;335,000, leaving almost pound;365,000 outstanding for courses he has delivered.

He also needed to move into new premises due to building work on his hotel, but said he was unable to get funding guarantees for the costs of a move, and also that objections were raised about all his alternative locations.

His business last year had a turnover of pound;1.2m and this year was on target to turn over pound;4m. But unless he receives the money he says is due to him, he will have run the Learndirect centre at a loss of pound;200,000 during its four years of operation.

He added: “The Birmingham and Solihull Learning Exchange is the vehicle for distributing Learndirect funding. It is run by college principals who are directors. I don’t think they were comfortable being out-performed by a private provider.”

Between last August and the end of January, learners registered for 6,098 courses at his centre and completed 4,687, a completion rate of 80 per cent. In all the other 23 centres, the number of courses completed totalled 2,754.

Mr Bennett said: “The reason given for withholding funding was that they had to be sure I was delivering the courses. I paid for auditors KPMG to carry out an independent audit, but that was not good enough. I believe I have been victimised for not only meeting my targets, but also because I far exceeded them.

“I did that by offering free coffee, free lunches and free transport to learners. We have 60 police officers doing computer courses and young offenders doing basic skills courses.

“We have awarded 450 food hygiene certificates to staff working in nursing homes, and 150 forklift truck courses to unemployed people, many of whom have found jobs.”

Mr Bennett said he intends to continue running a Learndirect programme for graduates, funded centrally rather than locally, and employing his remaining 10 staff.

Chris Webb, former principal of City college in Birmingham, said he failed to understand why the most successful Learndirect provider in the city had to close.

He said. “If I was running a company that was funding the Learndirect providers in Birmingham, Sutton Court would be the last one I would want to lose.

“The danger is that if you have boards where college principals are significant, then the treatment of colleges and private providers is not even-handed, if only out of ignorance.”

Cathryn Hickey, the West Midlands head of University for Industry which operates the Learndirect service, said they would be happy to see Mr Bennett continue as a Learndirect provider if he is able to find a suitable premises.

She said: “We fully recognise that the Sutton Court IT Centre has been very successful as a learning venue. We were very sorry when he wanted to resign and we worked to facilitate his payments.

He has been fully paid for the learning he provided this year. Outstanding payments for previous years depend on audits.”

She said the centre would have had to close anyway because of the building work at Mr Bennett’s hotel.

“If he came up with suitable premises to continue, we would be happy to go through the accreditation process with him,” Ms Hickey added.