COLLEGES have been warned against doing business with a private training company following concerns about its financial dealings with students.
The Learning and Skills Council has written to its 47 local arms, urging them to "consider very carefully" any attempt to claim funding for courses promoted by The Learning Library.
The company, based in south-east London, charges students for learning materials and has links with further education colleges which provide the tuition. Colleges can claim LSC funding for the students they enrol through The Learning Library, mainly on book-keeping courses.
But the LSC is unhappy about The Learning Library's practice of referring students to Empress Finance, which the company owns, for loans to cover their fees, and began reviewing its funding of the courses last year.
The LSC's national office wrote to its local offices last month. An LSC spokesman told FE Focus: "In the course of the investigation, a Charity Commission investigation and an Inland Revenue prosecution came to light, as did the fact that The Learning Library was promoting finance agreements on behalf of Empress Finance while not being entitled to do so.
"Additionally, it appeared that certain individual learners were being charged fees in breach of LSC funding guidance."
He said the letter to local LSCs was "expressing reservations as to whether colleges should be entering into partnership arrangements with such organisations."
He added: "The council advises local LSCs to consider very carefully any funding application on behalf of The Learning Library."
The prosecution referred to by the LSC was against Robert Webb, a director of The Learning Library until April last year, who was sentenced to 18 months in prison, along with co-conspirator Moira Simpson, who got six months. Both were convicted in 1999 of cheating the public revenue.
Steven Wines, managing director of the Learning Library, stressed neither Webb nor Simpson were connected with it. He said: "Robert Webb is not an officer of The Learning Library, nor is he on the board. Moira Simpson has no connection with either The Learning Library or Empress Finance.
"The Learning Library takes complaints from students very seriously. We have a dedicated student support team and the number of complaints we receive is very low.
"Empress Finance has its own customer service staff and in our experience deals with students in an appropriate manner. Complaints are investigated thoroughly."
The Learning Library has trained 200,000 students and describes itself as the biggest company specialising in book-keeping. Subjects also include computer programming and maintenance, and web design. It showed a turnover of pound;1.7 million in the year ending March 2002 and pound;1.3m the year before that.
Twelve English colleges had been taking on students through The Learning Library, but have since ended their relationship, apart from fulfilling their commitment to existing students.
One college principal told FE Focus: "The issue for me came up because of the question of the relationship between The Learning Library and the finance company and how they were dealing with learners at their end."
Learning Library publicity material was appearing on doormats as recently as last weekend bearing the logos of colleges which have severed connections with the company.
Mr Wines said: "There might be a small time lag in the removal of these leaflets from circulation."