A LEADING training organisation is suing the Further Education Funding Council for England over Pounds 3.2 million in unpaid bills for franchised courses.
CRT Group plc claims it earned the money for running National Vocational Qualification courses for North Derbyshire Tertiary College.
But the FEFCE has questioned whether the company actually did the job or used proper training staff, and whether some students claimed as full-time were part-time. "We consider the claims do not accurately reflect the work done. They have over-charged," a spokeswoman said.
The council has refused to pay the college the full claim. In turn, the college has paid CRT Pounds 500,000, but says the company is not entitled to any more.
David Bunch, college principal and chief executive, said: "We are standing four square - particularly in the context of the Nolan report. We are confident about going into court and are determined to win on this."
The dispute focuses on a national programme of work-based training run from the offices of a CRT subsidiary, Link Training, in Chesterfield involving about 70 different link centres. CRT claims it trained more than 7,000 students, although this is disputed.
The programme was franchised from North Derbyshire College, which hoped to use it as a way of achieving growth.
But in 1995 an external FEFCE audit highlighted problems with the courses and refused to pay.
CRT issued a writ against the college in June 1996 to recover the money. Since then, the disputed amount has risen by Pounds 1 million. Last month the writ was extended to cover the FEFC.
Karl Chapman, chief executive of CRT, said he was unable to comment since the legal process was ongoing. But in last year's annual report, CRT's chairman Barrie Clark said the company was so confident of succeeding in its legal action there was no alternative provision to make up the money. The training and recruitment company, which was formed in 1989, had a turnover last year of Pounds 134 million with profits of Pounds 12 million.
The FEFCE has had to fight four other cases in its four-year existence, mainly over whether courses are eligible for fee subsidies. This case would be heard early next year.