The 2017 to 2018
SUBCONTRACTING RULES
DEEP DIVE
(using version 3 of the 2017 to 2018 Funding Rules)
Rebecca Rhodes, Senior Associate, UVAC
[email protected]
Agenda
Subcontracting Purpose and Mindset
Subcontracting Rules
Subcontractor Agreement Template
Subcontractor Management
Commitment Statement Purpose and Use
Commitment Statement Template
Documentation
(with hyperlink = Para 121 onwards )
Applies only to
delivery with non levy
paying employers
Contract for
Services
Institution XYZ
& Employer ABC
Provider
Agreement
Institution XYZ
&
ESFA
Sub Contract for
Services
Institution XYZ
& Provider 123
Mindset
•
SFA take particular concern over subcontracted delivery provision because it
potentially adds risk to likelihood of delivery success:
–
–
–
–
•
Takes additional resource from the main provider to manage and monitor
Later identification of delivery issues
Underspend or over contracting
Main provider takes fees for their role, reducing the amount of funding going direct
to the costs of training - possible impact on quality and viability as a result
SFA recognise the value that specialist providers offer to apprenticeship
quality and capacity
– Some have chosen via the ‘Supporting’ route on RoATP to specialise here – capped
at £500k quantum
– Some will not reach capacity to be on the RoATP - 100k quantum
•
SFA therefore want to know whether you subcontract and if so with who and
for how much
– You must complete a Delivery Subcontractor Declaration as required - twice this
year between 1 May 2017 and 31 March 2018. Dates will be published
– Even if you don’t subcontract you MUST make a nil return
– Late return or failure to submit = suspended payments
Mindset
•
•
•
•
You are always fully responsible for the actions of your subcontractor and for
the quality of any outcomes
– You cannot cede accountability for the employer relationship
– There must always be a single provider chosen by the employer for all
apprenticeship provision
– You will probably subcontract for EPA as a minimum
– You can only subcontract from your own budget lines
You can only subcontract if the employer requests this and it happens at the start
of the apprenticeship
The main provider must deliver ‘some’ of the apprenticeship delivery in each
employers apprentice programme which must have ‘some substance and not be
just a brief input at the start or a small proportion of the total apprentice numbers’
You must have an external audit report to SFA specifications if your delivery
subcontracts exceeds 100k in a financial year, to provide assurance about your
arrangements to manage and control your deliver subcontractors. You must supply
a certificate signed and authorised to the SFA.
Subcontracting Delivery – your accountabilities
All funding is
routed through 1
main provider
(including English
and Maths)
Main
owns the employer
relationship
Can be a
subcontractor also
Must conduct all
or ‘some’ of the
training
If you fail to
check, SFA will
place restrictions
on your future use
of subcontractors
RoATP
Supporting
Must not exceed
£500,000 delivery
each year*
Must not deliver
100% of the
apprenticeship
Not on RoATP
Employer-Provider
Can only train their
own staff (or
connected
company/charity)
Must evidence actual
costs of delivery as
main or subcontractor
Must not exceed
£100,000 delivery
each year*
*The first ‘year’ is
1 May 2017 – 31 March 2018
Points to Note
• Take advice about the impact of
Public Contract Regulations
2015 - and make this available
to ESFA or employers if
requested
• How you must tender for
subcontractors e.g. open and
competitive tendering
First Time Subcontractors
P 127. You must not agree to the use of delivery
subcontractors with an employer if you do not have
knowledge, skills and experience of contracting with,
and managing, delivery subcontractors.
It appears that you can still seek written permission
from the SFA. Existing guidance is still posted
Speak to your Provider Manager
Subcontractor Rules
•
Delivery subcontractors must meet one of the following criteria :
– Be on RoATP for main or
– supporting routes (capped at 500K)
– The apprentice’s employer (or connected company) or charity and on RoATP having
applied through employer provider route
– Deliver less than 100k value of training and assessment quantum between May
2017 and March 2018
•
You must have a legally binding subcontract contract with the subcontractor (see Para
141 for detail / our template )
Your employer agreement must set out how the delivery of the apprenticeship
including the subcontracted elements will work (para 133 for detail)
You must act in an open and transparent way
•
•
– any links between you and any subcontractors must be set out in the employer agreement
•
You are responsible for dispute resolution
–
–
Employer and Subcontractor Agreements need to be ultimately enforceable through the courts
Apprentice and employers must be told, by you, how to escalate concerns
Subcontracting Considerations - Your Checks
Who you subcontract with is evidence of your robust management processes
ESFA specify that all of the following must be carried out and results available to them:
• Seek legal advice about the Public Contracting Regulations on recruitment of
contractors
• Carry out Due Diligence checks
• Have ‘robust’ procedures (e.g. in your due diligence) to ensure you don’t fund an
extremist organisation
• Don’t contract if you believe the organisation is not suitable - even if this loses you the
contract with the employer
• You must not agree to subcontract to a second level
• You must have an external audit report to ESFA specifications if your delivery
subcontracts exceeds 100k in a financial year
– To provide assurance about your arrangements to manage and control your delivery
subcontractors.
– You must supply a signed and authorised certificate to the SFA. They may wish to see the
whole report
Subcontracting Considerations - Your Checks
Who you subcontract with is evidence of your robust management processes
•
You MUST ensure that a ‘supporting’ RoATP registered subcontractor does not
have contracts that exceed £500 k in total or 100k if not on RoATP)
• Impact of failure to comply are significant :
– your subcontracting will be restricted
– the subcontractor may be excluded permanently
•
•
•
CHECK the list of Declared Subcontractors, for those on the supporting RoATP
route
Check the RoATP published list for status
Require subcontractor to declare other contracts to you in signing your
agreement
List of Declared Subcontractors
• Use the published list to check BEFORE you subcontract
Subcontractor Fees and Payments
Employer-Providers
• If you subcontract to an employer to deliver part of the apprenticeship ,
they must be on the employer-provider route of the RoATP
– They can only deliver to their employees/connected company employees
– Can only charge the actual costs of delivery and must provide evidence of this
Your Fees
• You must set out your fees for monitoring and managing the subcontract
in the employer agreement and the subcontractor contract
– You must set out what support you provide for these fees
– And specify how you will monitor quality
– And how you will mange the subcontractor
Subcontract Template
Funding Rules / Terms
Must specify the following (para 142)
• They must keep to the funding rules.
• They must provide you with ILR data so that
your data returns accurately reflect delivery
information.
• They must give SFA and any other person
nominated by SFA access to their premises
and to all documents related to their
delivery of apprenticeships.
They must give you sufficient evidence to allow
you to:
• assess their performance against the
requirements of the QAA Quality Code
• incorporate the evidence they provide into
your self–assessment report
• guide the judgements and grades within
your self-assessment report
•
•
•
•
They must always have suitably qualified
staff available to provide apprenticeship
training and/or on-programme assessment.
They must co-operate with you to ensure
that there is continuity of learning for
apprentices if the subcontract ends for any
reason.
They must tell you if evidence of irregular
financial or delivery issues arises. e.g.
sanctions imposed by an awarding
organisation, not meeting relevant QAA
Quality Code indicators, allegations or
complaints by apprentices, employers, staff
members or other relevant parties.
They must not use your funding to make bids
for, or claims from, any European funding on
their own behalf or on our behalf or use
payments made as match funding for ESF
projects.
Subcontract Template
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Definitions and Interpretation
ESFA Contingencies
Force Majeure
Liabilities and Insurance
Insurance
Safeguarding
Health and Safety
Confidentiality
Intellectual Property
Data Protection and Freedom of
Information
Equality Legislation
Contract Variation
Change Protocol
General
Schedule
•
•
•
Same document as is set out in Schedule 1 of the
Employer Agreement
Filled in for each apprenticeship programme and
each costs schedule tailored appropriately.
multiple programmes under the same contract
needs multiple schedules
The differences between this and the Training
Provider/Employer template are:
•
•
•
•
Employer name needs to be inserted
If the Subcontractor is delivering functional skills
training, this needs to be included in row 15
Costs schedule only includes Subcontractor Fees.
Payment schedule on invoice as agreed between
the parties
Subcontract Monitoring
observation of
initial guidance,
assessment
and delivery of
training and/or
on-programme
assessment
include whether
the apprentices
exist and are
eligible – i.e. are
meeting Funding
Rules
You must manage
and monitor to
ensure high
quality delivery
that meets the
SFA funding rules
You must
carryout a
regular and
substantial
programme of
QA checks visits
at short notice
You must
report any
instances to us
where your
findings don’t
match records
You cannot
transfer the
employer
relationship lead
You are
responsible for
the quality of
delivery by your
subcontractors
Managing Subcontractors In Practice
•
Regular (monthly) reviews
– review of forecast volumes, ILR data returns, progress
– You must make sure these meetings and reviews take place
– Document actions, circulate and follow up
– Check paperwork matches ILR - conduct a sample file review
• check dates, values, eligibility, incl employer provider/ connected company
•
Check that ILR returns are made on time, funding is claimed (and paid
to subcontractors) on time
•
Termly visits to observe delivery across the portfolio of delivery:
– Quality of guidance, teaching and learning
– Embedding of safeguarding and PREVENT
•
This all applies to employer providers - you are still responsible and
accountable
Due Diligence & Managing Supply Chains
REMEMBER - these need updating to comply with currrent policy and rules
Due Diligence Checks ( see examples )
Scenarios
Scenario
Fundable ?
1
HEI intends to subcontract delivery to the
employer for 3 modules totalling 4 months
of a 12 month programme for all 20
apprentices
YES Delivering 30+ % passes the ‘some’
test and delivering core content is
integral to the apprenticeship and
more than ‘ a token’
2
HEI intends to subcontract out all of the
delivery of an integrated degree
apprenticeship but is the degree awarding
body
? NO
Main provider must retain the
employer relationship
Owning the quality process does not
count as ‘some’ training or assessment
3
HE staff are used by the EPA as assessors
for the HE’s own apprentices
? NO
Training provider cannot carry out the
end point assessment
4
The main provider is subcontracting back
to the employer’s training team who are a
commercial function so charge this rate for
their delivery.
NO
Delivery to an employer’s own staff by
their own training team must be at
cost.
COMMITMENT STATEMENTS
At its most basic
•
•
•
•
Sits alongside the employer contract significant status
Key Element of the Evidence Pack – make sure dates match ILR
Ready at the start, and for the entire length of, the apprenticeship
Employer, Apprentice and Provider must all hold accurate and up to
date signed copies, updated and redistributed as needed.
• Updated to include EPAO / Subcontractor details as soon as they have
been confirmed.
• Includes provider’s process for resolving any queries or complaints and
the escalation process to the ESFA through the apprenticeship helpline
• Provides a short summary (a ‘routemap’) of content, timing and
delivery arrangements to include the following as a minimum:
Content Required:
• 1. APPRENTICESHIP CONTENT - Planned content and schedule for eligible
training, start and end-dates and (where applicable) end-point assessment,
and key milestones for mandatory or other qualification achievements
• 2. SUPPORT FOR THE APPRENTICE - what is expected and offered by the
employer, main provider (and any delivery subcontractors) and the apprentice
to achieve the apprenticeship
• 3. FUNDING - details on
– which elements are eligible for funding from the employer’s digital account or governmentemployer co-investment and necessary to meet any end-point assessment,
– those which are extra and not eligible for co-investment but will be fully funded by the
employer,
– and those fully funded by the ESFA including English and maths
Content Required:
• 4. DELIVERY ORGANISATIONS - a list of all organisations delivering the
training including English and maths and the apprentice assessment
organisation (where applicable)
• 5. ROLES AND RESPONSIBILITIES - for the employer, provider and apprentice
and arrangements for how the three parties will work together; including
– contact details
– the expected commitment from each party to ensure the smooth running and day-to-day
delivery of the apprenticeship, including, e.g. • for an apprentice, attendance and study time
• for an employer, commitment to wages and time off to study in the working day • for a
provider, support and guidance available and how to access
UVAC commitment statement
template
•
•
•
•
Applies to Levy and Non-Levy funded
Covers all the requirements set out in the Funding Rules (P 183-185)
Intended as a working summary document for the apprentice
Use in tri-partite reviews to check :
–
–
–
–
–
progress against the schedule
That responsibilities are being met
Remind about others
Reiterate that support is still there
Address queries and issues
• Need to check employer is comfortable with cost breakdown
• Must update the commitment statement with EPAO etc if not ready at the
start
Commitment Statement
1.Summary
•
•
•
•
Tripartite contact details
Apprenticeship name
Review schedule
Key Advice / process / policies e.g.
complaints, sickness, prevent
2. Delivery Summary
•
Dates of modules, qualifications,
exams, reviews
3. Funding Summary
•
Allows initial assessment or other
‘free’ elements be listed (at £0
employer cost)
4. roles and responsibilities
• Either as a table under specific
headings to contrast all three
roles e.g. ‘support’ or a
narrative list
5. Authorised signatories
• Can include declarations e.g.
key apprentice declarations
• Signed by apprentice AND
Guardian where needed
Questions
Any further scenarios? - please email me [email protected]
LET US KNOW WHAT ELSE YOU WOULD FIND USEFUL