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Rules around subcontracting under review

The rules around subcontracting fees will be reviewed in the coming months to ensure funds are being used appropriately

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The rules around subcontracting fees will be reviewed in the coming months to ensure funds are being used appropriately

The Education and Skills Funding Agency (ESFA) has published clarification of the rules around sub-contracting provision.

In the update, the ESFA wrote: “We believe it is important that government funds are not diverted away from training and assessment in the form of fees and other charges, and so the intent of the rules is to make sure that the main and subcontracted providers both add value to the employer’s apprenticeship programme.”

The guidance also clarified:

  • The main provider has full responsibility for the quality of all aspects of every apprenticeship delivered for the employer and is required to carry out formal assessments of their subcontractors’ provision
  • The main provider is also required to deliver some of the employer’s apprenticeship programme’s training and/or on programme assessment

Further review

In the coming months, the ESFA will also be reviewing the rules surrounding subcontracting fees and charges, “so that we can be assured that our funding is being used for recognised costs”.

The second area under scrutiny is around evidence requirements associated with the subcontracting funding rules. Any changes are set to come into force in August.

The updated guidance comes after three membership organisations said prime FE or skills providers should not “top-slice” more than 20 per cent of programme funding for subcontracting or management fees.

The Association of Employment and Learning Providers (AELP), the lead body for Adult Community Education and Learning Holex, and Collab Group – which represents larger, more successful colleges, released its own guidance for its members last month.

'More transparent'

The ESFA also published details on how adult education and training providers can declare the actual level of funding paid and retained for each of their subcontractors in the last academic year.

The figures used to have to be published on a providers’ website, but now the data will be published in a single location on the government’s website. The ESFA says this will make subcontracting fees “more transparent”.

According to the ESFA all providers that "provision subcontracted" last year have been contacted by email and need to return the template by 5pm on Friday 27 April.

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