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Subcontracting in apprenticeships: a response to the latest guidance

Matt Garvey, managing director at West Berkshire Training Consortium, explains what the government's guidance on apprenticeship subcontracting means for you

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Matt Garvey, managing director at West Berkshire Training Consortium, explains what the government's guidance on apprenticeship subcontracting means for you

The waiting and anxious nights are over. The government has finally settled on a position (for now) with regards to subcontracting in apprenticeships.

This follows a robust response to the original proposals released in August that appeared to bring partnerships between lead and supporting providers to an abrupt end. I was pleased, following my own humble observations, to have been invited with other providers to a focus group at the Skills Funding Agency (SFA) headquarters to discuss our concerns. Many of the providers present were not-for-profit or charitable prime providers who had excellent arrangements in place with a range of subcontracting organisations. Needless to say, the original proposals to restrict subcontracting to a 49 per cent portion of training represented an existentialist threat to some of these organisations.

What did we propose at that meeting?

  1. That subcontracting, when done well, adds immense value. It makes life easier for employers because they can contract once rather than with multiple organisations
  2. Subcontracting allows a rich and diverse range of providers and employers to offer their services. It particularly helps smaller providers to survive in the labyrinthine industry that is apprenticeships
  3. The SFA can easily differentiate between subcontracting arrangements that are quality driven from those that are profit driven. We agreed that the latter, in line with government policy, could be restricted. We proposed a fourth application route for quality-based partnerships in which some providers were effectively licensed to subcontract.
  4. We also proposed that the 51-49 per cent split be reconsidered because it was arbitrary, unnecessary and almost impossible to enforce

What do I think of the latest guidance for Register of Apprenticeship Training Providers (RoATP)?

One phrase comes to mind: common sense. The final rules are pragmatic. They retain flexibility for very small providers and for employer choice. I read the document Supporting quality and employer choice through a new Register of Apprenticeship Training Providers and let out a huge sigh of relief.

  1. Very small providers operating at under £100,000 will not be exposed to the burdensome RoATP and the costs of being a direct provider. This will allow lead organisations to continue nurturing new entrants to the market while sustaining for the long term specialist provision
  2. Larger but modest providers can opt to remain as a sort of ‘approved’ subcontractor through the ‘supporting route’ as long as their volume of delivery is under £500,000
  3. Crucially, providers like West Berkshire Training Consortium will retain the ability to subcontract on behalf of employers. The guidance sets a clear spirit of this rule inasmuch that it should be at the employer’s request. The interconnected infrastructure between providers will continue to generate good outcomes for employers so long as the employer approves it.
  4. Employers who wish to become involved in delivery will also have their own dedicated application route

I still feel that the decision to omit consortium leads such as provider networks that contract behalf of a range of small providers but offer no direct delivery is a mistake. These organisations sustain a rich network of smaller and specialist providers and often do it on a not for profit basis. I understand that there is a desire to filter out managing agents and a fourth procurement route could have helped to keep the good but exclude the bad.

An opportunity for everyone

I have always stated that subcontracting, where it works, should be allowed to continue. Yet at the same time, subcontractors should be free to become direct providers. These new rules appear to meet both objectives. Crucially they recognise that the employer must be the ultimate arbiter and be free to opt for the way the contract, with whom they contract and the supply chain involved.

My only note of caution is the time frame. There will be thousands of RoATP applications from new and established providers. There will be thousands of procurement applications too for the non-levy contracts. Can these be accurately assessed and awarded in time by the reduced resources of the SFA? Given the huge delays on the much more modest European Social Fund tenders I am guessing not. I don’t believe on current evidence that this procurement exercise can be launched and completed in time for April 2017. If that prediction were to be proven true it would be not only a PR disaster but a financial nightmare for all of us.

Matt Garvey is managing director of the West Berkshire Training Consortium. He tweets at @WBTCNewbury

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