City Guilds will use one office in Newcastle-upon-Tyne to monitor the north of England after breaking off an arrangement to maintain its base in Yorkshire at the eleventh hour.

Colleges in the region say the step will reduce personal contact and make it harder for them to seek advice over the running of City Guilds programmes.

The awarding body, which denies the changes will lead to any reduction in support, is understood to be making the move as part of a drive to save cash. It is understood to be seeking to cut staffing by a tenth.

City Guilds is also facing accusations of withholding cash it owes to the Nottingham-based East Midlands Further Education Council.

EMFEC is one of eight regional advisory councils providing services such as training to further education. City Guilds had contracts for around five years with the advisory councils to run its quality assurance programmes locally, but all but one - in East Anglia - have now pulled out after the awarding body demanded changed terms. City Guilds has opened new offices around the country to provide the service itself.

EMFEC said two years ago it would not sign a new agreement but would fulfil its current contract, due to end this September. But managers have sought legal advice over their claims that City Guilds has changed the terms of the deal and held back more than Pounds 30,000 from EMFEC in 1996.

EMFEC chief executive Roy Ainscough said City Guilds had not met his invoices in full since Christmas and had failed to answer letters questioning the payments. He said: “We are honouring our part of the contract. We have budgeted on the basis that we would receive this money.”

Managers at Yorkshire and Humberside Association for Further and Higher Education are furious that City Guilds pulled out of plans to convert their long-standing quality assurance contract into a joint trust.

They say it followed a communications breakdown compounded by the sudden departure from City Guilds of its respected quality director Elaine Treasure.

In a letter to members, the YHAFHE board says it is “appalled” at the withdrawal, which it claims will be to the detriment of colleges in the region.

Chief executive Neville Woodhead said YHAFHE would have to make “substantial” redundancies. He said: “This will disrupt long-standing links and jeopardise the quality of support for colleges.”

Vince Hall, principal of Dewsbury College and a YHAFHE board member, said the “shabby way” the organisation had been treated did not bode well for partnership with City Guilds.

Sheffield College principal Ken Ruddiman, said: “We find it disturbing that what little regional framework there is for FE is slowly being dismantled. ”

Norman Bailey, chief executive of CENTRA, the North-west regional advisory council which has also ended its quality assurance contract with City Guilds with the possible loss of five jobs, said principals had contacted him to say they were concerned at losing local contact.

He said: “They used to be able to pick up the phone and get a local voice who would not, for example, send the same verifier into neighbouring and competing colleges.”

LASER, the London advisory council, collapsed last Easter after losing its City Guilds contract.

City Guilds told The TES it had six of its own quality assurance offices plus one remaining contract with a regional advisory body. It said the decision to open its own offices had been taken “for business reasons” and would ensure it had more direct control.

The changes would not cut support for centres delivering its qualifications, which would be served in some areas by staff based away from an office, perhaps at home.

A spokesman said: “City Guilds appreciates the support YHAFHE has given it but has decided for business reasons to extend the City Guilds quality service office in Newcastle.”

He said that City Guilds was negotiating a final payment to EMFEC.