A college in Cheshire which has achieved growth of more than 266 per cent over the past 11 months is being investigated by the Further Education Funding Council as a result of its prolific franchising operation.

Halton College is scheduled to receive a 33 per cent rise in its funding council allocation for 1995/96, by far the biggest leap in the sector. This will take its FEFC support to more than Pounds 10.5 million.

The college contracts with large local and national companies to provide for a range of training needs from guidance and counselling on which National Vocational Qualifications employees should take, to "upskilling" and assessing and verifying performance. A spokeswoman for the FEFC confirmed that the college was under investigation by the council.

She said that if Halton had been engaged in activities in the current year which were beyond the remit of its FEFC funding, "the college's funding will be adjusted accordingly and funding for the coming year will be looked at again".

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Jenny Dolphin, vice principal, said Halton had designed a strategy which was within the FEFC guidelines to exploit a market opportunity with students already in employment. Halton also supports training of students with learning difficulties and says that it is now the largest provider of such training.

Ms Dolphin said Halton used NVQs to help provide firms with a skills audit. She said the college had used FEFC funds "to enable us, in effect, to offer a discounted pricing structure for training by subcontracting some of the work to the company". Its staff visited on a regular basis to conduct quality checks.

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"We have had our external auditors in to verify and audit the numbers and to check the work we do is within the funding methodology guidelines. We want to add value we do not just want to be a conduit for passing money to people. That is not what we do."

The FEFC has been concerned about franchised courses for some time and has set up a working party to establish new guidelines.

Ms Dolphin said that the FEFC had not told the college that it was under investigation. "They have not contacted us to say what the allegations might be," Ms Dolphin said.