Subcontracting
funding rules:
scenarios
April 2017
Content
• Policy context
• Policy implementation
• Funding and subcontracting rules – key points
• Introduction to scenarios
• Subcontracting scenario discussions
• Questions and comments
Policy context
The wider policy document for apprenticeship funding in England from
May 2017 is available on gov.uk.
The document provides detail on how the policy has been adapted in
response to feedback on initial proposals published by government in
April 16 and then August 16. Throughout this time, employers, training
providers and interested stakeholders have been engaged to inform the
policy development. This valuable input has shaped the final funding
policy.
The reforms give employers more control over designing, choosing and
paying for apprenticeship training. The funding policy supports the
changes to the way apprenticeships in England are paid for,
underpinned by the apprenticeship levy.
Funding will follow employer choice, moving away from the current
provider-led model and meaning providers will have to be much more
responsive to what employers need.
Policy implementation
In implementing subcontracting policy the Skills Funding Agency
consulted with employers (levy and non-levy), employer-providers and
providers of all types
• Prior to drawing up the initial proposals and
• Following feedback and prior to final proposals we obtained
feedback by way of a survey, focus groups and consultation with our
Provider Reference Group (PRG). The PRG supports the SFA on the
implementation of changes resulting from apprenticeship reform
policy, the introduction of the levy and the apprenticeship service for
employers
• Subcontracting policy was reviewed and agreed prior to publishing
the draft funding and performance management rules in October
2016, in time for the opening of the Register of Apprenticeship
Training Providers (RoATP) and the associated Invitation to Tender
(ITT) for applications
• The draft funding rules incorporated the subcontracting rules
Funding and subcontracting rules for
new apprenticeship starts from 1 May
2017
The Skills Funding Agency funding and subcontracting rules apply
to all employers and providers:
• those employers who will be using their digital account on the
apprenticeship service (rules and guidance for employers)
• those employers who will not be using a digital account on the
apprenticeship service (typically SMEs) who will use providers
who hold a Skills Funding Agency contract
• Employer-providers (rules for employer-providers)
• Providers of apprenticeship training (apprenticeship funding
and performance-management rules for training providers)
The rules have been reviewed following feedback and issue 2 has
been published in March on gov.uk
Subcontracting rules: key
points - 1
• Funding for all elements of each apprenticeship will be routed
through a single provider that the employer has chosen, including
English and maths– this is the main provider
• At the outset of each apprenticeship, a main provider and employer
will agree a plan for its delivery
• The main provider must directly deliver some of the apprenticeship
training and/or on-programme assessment associated with each
employer’s apprenticeship programme. By apprenticeship
programme is meant the apprentices that are being trained for the
employer that has chosen the main provider
• The volume of training and/or on-programme assessment that the
main provider directly delivers for each employer must have some
substance and must not be a token amount to satisfy this rule. It must
not be limited to a brief input at the start of each employer’s
programme or involve delivery to just a few of a large number of
apprentices
Subcontracting rules: key
points - 2
• The main provider can use delivery subcontractors to
complement their own delivery if requested by an employer
and agreed at the start of an apprenticeship. Delivery
subcontractors can deliver full or part-apprenticeship
frameworks and standards.
• The main provider must not agree the use of any delivery
subcontractor where this would require them to subcontract
apprenticeship training and/or on-programme assessment to a
second level. All delivery subcontractors must be contracted
directly by the main provider.
• The main provider must maintain the relationship with each
employer at all times. The main provider must not allow a
delivery subcontractor to lead that relationship.
Subcontracting rules: key
points - 3
The main provider must only use delivery subcontractors that
satisfy one of the following three criteria
• They are on the published register of apprenticeship training providers and
have applied by the main or supporting application routes.
• They are the apprentice’s employer or a connected company or charity as
defined by HMRC and are on the published register of apprenticeship
training providers, having applied through the employer-provider
application route.
• They are not on the published register of apprenticeship training providers
but will deliver less than £100,000 of apprenticeship training and onprogramme assessment under contract across all main providers and
employer-providers between 1 May 2017 and 31 March 2018.
Subcontracting rules: key
points - 4
If the main provider and an employer agree the use of delivery
subcontractors, they must have an up-to-date written agreement
in place with each employer that includes, for example the
following for the delivery of their apprenticeship programme
• The apprenticeship training and/or on-programme assessment that
you will directly deliver.
• The amount of funding you will retain for your direct delivery.
• The apprenticeship training and/or on-programme assessment that
each delivery subcontractor will contribute to the employer’s
apprenticeship programme.
• The amount of funding you will pay each delivery subcontractor for
their contribution.
• The amount of funding you will retain to manage and monitor each
delivery subcontractor.
• The support you will provide each delivery subcontractor in
exchange for the amount of funding you will retain
Subcontracting rules: key
points - 5
Special conditions for subcontracting
• Organisations who have successfully applied through the employer-provider
route of the RoATP are only eligible to deliver apprenticeship training and/or
on-programme assessment to apprentices employed by them or a company
or charity connected to them as defined by HMRC. The main provider must
ensure any employer-providers who are delivery subcontractors to them
meet this requirement
• Employer-providers must evidence the actual costs of delivery of
apprenticeship training and on-programme assessment
• Delivery subcontractors who have successfully applied to the supporting
application route of the RoATP must not receive more than £500,000 of
apprenticeship funding for their delivery each year
• Organisations who are not on the register of apprenticeship training
providers must not receive more than £100,000 of apprenticeship funding
for their delivery each year. Where the employer is the delivery
subcontractor they must report the actual costs of delivery
Subcontracting scenarios
Four subcontracting scenarios follow.
In all cases it is important to consider the scenarios alongside the
full set of subcontracting rules, rather than for example, any
single rule.
Following review of these scenarios it would be helpful to discuss
other possible ones together.
Scenario 1
An employer has only one apprentice to train and chooses a
main provider to deliver their apprenticeship training.
Can the main provider subcontract all of the delivery?
In this scenario the employer has chosen a main provider to
deliver the apprenticeship training for them. The apprentice is the
employer’s ‘apprenticeship programme’. The main provider must
deliver some of the apprenticeship training and/or onprogramme assessment.
Scenario 2
An employer has one apprentice to train each month and
chooses a main provider to deliver their apprenticeship training.
Can the main provider subcontract all or some of the delivery?
In this scenario the employer has chosen a main provider to
deliver the apprenticeship training for them. The apprentices
constitute the employer’s ‘apprenticeship programme’. The main
provider must deliver some of the apprenticeship training and/or
on-programme assessment associated with each employer’s
apprenticeship programme.
Scenario 3
An employer has a cohort of apprentices to train each month
and chooses a main provider to deliver their apprenticeship
training.
Can the main provider manage the delivery for the employer by
sourcing delivery subcontractors to do so?
In this scenario the employer has chosen a main provider to
deliver the apprenticeship training for them. The apprentices
constitute the employer’s ‘apprenticeship programme’. The main
provider must deliver some of the apprenticeship training and/or
on-programme assessment associated with each employer’s
apprenticeship programme.
Scenario 4
A main provider part-delivers a degree apprenticeship with a
higher education institution (HEI)
An employer chooses a main provider who provides the level 4
and level 5 component of a degree apprenticeship with the HEI
delivering the level 6 and awarding the degree. Is this possible?
In this scenario the employer would agree at the outset of the
apprenticeship with the main provider that the HEI would be the
delivery subcontractor and that they would deliver the level 6
component. The main provider delivers some of the
apprenticeship training.
Subcontracting funding rules:
scenarios
Discussion
Questions and comments
Thank you