'Moolah' behind disputed contract

The Chief executive of Link, a company that specialised in providing vocational training, wrote that a contract with North Derbyshire Tertiary College would "make us a packet of moolah just at a time when we needed it".

The statement, in a memo Mike Gordon wrote in September 1995 when the company was negotiating with the college, was one he now regretted. But he told the High Court in Manchester: "The contract would have made us money. Otherwise I wouldn't have entered into it."

Link is suing North Derbyshire Tertiary College for #163;3.2 million after a dispute over a franchise. The company claims it successfully delivered NVQ courses for 7,000 students and is entitled to be paid for its work. The college has paid #163;663,000 and says that is all it owes.

Mr Gordon told the court his company's operating team were enthusiastic for the job and he believed it was important from a commercial point of view.

He said: "I was very interested in doing this deal because several of our competitors were going into our customers and were offering college funding for the training of people 25 years-plus. By doing that they were then putting into the minds of customers the fact they could also do TEC (training and enterprise council) work and that was our main core business."

In a presentation to Link's board of directors, Mr Gordon emphasised the advantage of the contract. It would bring in #163;1m profit, use existing premises, materials and people and would attract new customers and maximise the core business.

He agreed with Philip Raynor QC, counsel for the college, that when Link ran courses for TECs, there was no requirement to deliver a set amount of hours per student. To meet Further Education Funding Council targets for full-time student funding there had to be 450 learning hours.

But Mr Gordon revealed Link did not believe the college students would require as much personal attention as the TEC candidates because they were over 25 and in full-time employment. It all depended on each individual, he claimed.

A key element of the case is whether the 450 learning hours per student were actually delivered and whether hours with workplace mentors could count towards this. The college claims Link failed on both counts and it was unaware that mentoring sessions were being counted towards the 450 hours.

Link claims the college was aware it was using mentors. Gordon told the court he was told that the tertiary college had changed its previous objections and was prepared to accept mentors, the company's "normal method of delivery". Other colleges had ruled that such methods were unacceptable. Mr Gordon added: "Key for us all was that guided learning hours should be provided in the normal way through training consultants and workplace mentors."

According to its QC, Peter Smith, Link was to have been paid Pounds 600 for each student. The company argues that the college only challenged the way the courses were delivered after it became apparent the FEFC would not pay.

He added that his staff informed him that the college had gained approval from the FEFC for the method of delivery in June 1995 for courses that would start that academic year. Mr Raynor argued there was no reference to workplace mentoring in any documents until January 1996.

Mike Gordon confirmed a written note he had made on Christmas Day 1995 in which he stated that the paperwork from the workplaces where students were studying was "horrendous".

In the same document he had expressed surprise that neither the FEFC nor college wanted to visit the placements. His staff had also reported to him that there was a staff shortage but Mike Gordon told the court this was a general comment about the programme and did not refer to guided learning hours.

When in February 1996 an FEFC team visited to look at the franchising operation Mr Raynor claimed that an official, Jane Bracewell, made clear that workplace mentoring did not qualify for funding. Mike Gordon rejected that, saying no definitive statements were made at the meetings.

The case continues.

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