The Catholic Church, which runs the organisation, blames bizarre bureaucracy and government underfunding. It says that it can no longer operate in an industry increasingly dominated by 'cowboys' who survive by falsifying qualifications, and by paying staff tiny salaries in cash to avoid taxation. Late last week it emerged that the National Audit Office is to investigate claims of fraud among training companies.
The demise of Cathedral Employment Enterprise this week comes as the National Council for Voluntary Organisations publishes its annual report showing that charities are pulling out of the training industry en masse.
Last year the church poured more than pounds 120,000 into Cathedral to support schemes for the unemployed which are meant to be fully funded by the state.
Bishops who are ultimately responsible for Cathedral, which employs 130 staff and runs centres across London, argue that eccentric rules can mean that government payments are withheld if students perform too well.
This week a group of 60 adult trainees who have already achieved National Vocational Qualification level two, according to the church, have to sit NVQ level one tests so that Cathedral can receive its funding.
The North West London Training and Enterprise Council (TEC), which disburses government money for such courses, has refused to pay for the qualifications because it had a contract with Cathedral for level one only, says the church.
Father Hugh Bridge, a manager at Cathedral, asked the TEC if it would simply pay the sum due for level one successes, despite the achievement of the more expensive level two. The council refused and so this week the 60 students have to sit exams which are substantially below the standards they have already achieved.
An exasperated Father Bridge said: 'It's bureaucracy gone bananas. The bishops are simply fed-up with the antics of the Government and the TECs.'
The closure of Cathedral will mean that TECs in London will have to find alternative places for 1,500 students. Cathedral runs some of the few remaining centres which train people in building and engineering skills and which require workshop facilities.
Father Bridge says the government funding for the two- year courses provided by Cathedral has slumped from pounds 2,500 per student per year two years ago to pounds 1,400 last year and pounds 800- pounds 900 this year. Ministers believed the shortfall would be made up by the private sector, but no such funding has been forthcoming.
Roy Baine, chief executive of North West London TEC, accused Cathedral of incompetence and of low health and safety standards.
He said that classes at Cathedral were a 'shambles' and that sometimes there were no tutors present.Reuse content