A GOVERNMENT quango is stripping a local temp supplier of business worth tens of thousands of pounds every year even though it has done nothing wrong.

The Learning and Skills Council, a national body with a Kent and Medway offshoot in West Malling, has awarded a central contract that effectively excludes New Appointments Group, a Sittingbourne firm with branches countywide, including Chatham and Gillingham. NAG has been supplying temporary workers for many years.

The LSC policy is designed to cut costs by reducing the number of training providers serving the nation's 47 regional councils. But the arbitrary award of a contract to Kelly Services, a national firm with local outlets, including a branch in Pudding Lane, Maidstone, next door to NAG's own branch, will deprive successful regional firms of valuable business.

To make matters worse, NAG has been told to hand over sensitive data about temps to Kelly, a local competitor. It has refused to comply until the situation has been sorted out, claiming that aside from competitive issues, such action would breach the Data Protection Act.

NAG also claims that the change was conducted through a national tendering process of which it knew nothing. Gerry Cassell, NAG chief executive and company founder, said it was no way to treat efficient local firms.

"I would have thought that the LSC should have an obligation to local businesses," he said. "I can understand the LSC going out to create a national supply provision. That's nothing different to what some large companies do on a global basis.

"What I am concerned about is that there was no consultation at all either by asking us to put our case or by asking us whether we wanted to be in the tender process."

Mr Cassell only learned of the major policy shift when a fax from the LSC headquarters in Coventry arrived at NAG's local office in Kings Hill, West Malling. He has complained that such an important document was not sent to his head office in Crown Quay Lane, Sittingbourne. It was also wrongly addressed to "Reed Employment" at "West Morley."

But Mr Cassell said he was less annoyed by the obvious errors than the contents of the fax. "It's just appalling," he said. The fax bluntly ordered NAG to "co-operate fully" with Kelly Services "to ensure a smooth transition" by the deadline of February 12.

Mr Cassell has complained to Simon Norton, chief executive of Kent and Medway Learning and Skills Council. Mr Norton was away for the Christmas holiday. But Tony Allen, the council's director of business development, said: "We are still talking to national office and Gerry about this. At this time, it would be inappropriate to comment further."