The Further Education Funding Council wants a full report into the controversial system of franchising by September, to coincide with the report of a government working group examining the national web of contracts between colleges and the private sector.

The report will arrive on ministers’ desks at a crucial time for training and FE policy. Both Conservative and Labour parties have backed the idea of franchising.

Tories hope deals with employers will help to fund continuing expansion within a cash-limited FE and training budget. Labour sees franchising as a key part of its University for Industry, which will commission training courses from colleges and other bodies.

Concerns have been voiced about standards and funding of franchised courses, with attention focusing on programmes run at great distances from colleges.

High-franchising colleges have staunchly defended their work, pointing to huge increases in student numbers.

Chief inspector of colleges Jim Donaldson said: “We will look at the quality assurance arrangements which apply across a range of franchised provision - students taught at a distance or sometimes more locally, and the diversity of programmes which exist.

“We will visit the best part of 20 colleges across the country and produce a report. Franchising has attracted quite a lot of criticism, but there are very, very real strengths, and it’s important not to throw the baby out with the bath water.

“It is possible to determine the quality of franchised courses, but it is time-consu ming.”

Last month the working group on franchising, set up by education minister James Paice, backed the principle of college deals, and declared it was “inappropriate” to limit FE colleges to their own areas.

But the group of principals, training and enterprise council leaders and senior officials did conclude there were “risks associated with lack of adequate quality control”.

The group’s full report is due out this summer, ahead of the FEFC’s inspection study.

High-franchising colleges have expressed concern at the bureaucracy surrounding controls on their work, and insist that their private- sector deals are subjected to the utmost public scrutiny.

But Bill Hill, principal of St Austell College, said he welcomed the planned inspection. He said: “This college was inspected last summer, and they went into all the quality issues and the systems we have for monitoring quality. My view is that we have nothing to hide, and if it would be helpful to move the franchising debate forward, then we would say we welcome it. ”

St Austell was criticised over the control of franchised courses from Scuba diving to yacht master qualifications, although the college gained an above-average grade two for such courses.

Mr Hill said the inspectors’ comments had been useful in devising a new quality control mechanism at the college. “Everybody has been learning over time,” he said.

“The question which the working group has raised is whether you can maintain quality over a distance. My view is that although it’s slightly more expensive it can be done, and the quality control is if anything more intensive than for courses within colleges.”

David Eade, principal of Barnsley College, said: “I personally welcome this. I think colleges have been very well aware that they have to run very high quality franchised courses.”