College faces pound;3m law suit

4th July 2003 at 01:00
Computer training company to sue Cricklade over franchise deal. Steve Hook reports

A COLLEGE is being sued for more than pound;3 million after it allegedly failed to pay its share for training carried out by a private company under a franchising agreement.

The company - Extras for Information Technology - ran computer courses for unemployed people using money from the European Social Fund, from 1994 to 1997.

The fund money was granted on condition that the courses received a subsidy from elsewhere. Cricklade college in Hampshire agreed to provide pound;1.9m worth of support - either in cash or resources.

Extras claims this enabled the college to take money from the Further Education Funding Council for each student on its courses.

But the company says it was forced to provide its own resources, including computers, because of bureaucratic delays at the college. So it asked the college to make its contribution in cash instead.

None of the cash has been forthcoming, says Extras, which now seeks pound;3.4m from Cricklade to recoup the money it claims is outstanding plus interest.

The college, which disputes the claim, carried out its own investigation into Extras in 1996 and decided that it was an unreliable partner and that the relationship should be ended.

Leslie Hardy, Extras' chief executive, says he will represent the company in the High Court, despite having no legal training, because he cannot afford legal fees.

He has already had to pay pound;90,000 into the court as security against the college's costs, estimated at pound;270,000, to keep the case alive.

He says his company will end up in liquidation if the case fails.

An investigation into the affair, carried out for the Department for Education and Skills by Sir Patrick Lowry, former chairman of the Arbitration and Conciliation Service, criticised the college's governors for failing to get to grips with the situation.

Governors had been told the DfES's social fund unit had visited the college as part of an investigation into Extras which was sparked by the fact the training was being delivered without match-funding.

Extras maintains the match-funding was withheld by the college and says the investigation against it was taken no further.

In his report, Sir Patrick said: "I find it incredible that the governing body was not put fully in the picture. I am equally surprised that no individual governor thought to ask a few probing questions."

A two-day pre-trial hearing was due to be completed in Cardiff today and the case is expected to be heard in full from November 17.

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