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Ofsted Seeks to Make Oversight of Subcontractors More Comprehensive and Transparent

Ofsted has published new research looking at subcontractors in the further education and skills sector.

New research by Ofsted finds that subcontractors in the further education and skills (FES) sector often have overall control of the day-to-day quality of a learner’s education and training. However, directly-funded providers do not always exert enough influence to manage the subcontracted provision well. For example, they might not have the necessary subject or industry expertise to review provision meaningfully.

The research also found that the current approach to inspection means that some subcontractors are visited more than once, while others are not visited at all.

While Ofsted is not funded to directly inspect subcontractors, the research proposes a more comprehensive and transparent approach to improve oversight.

The report, ‘Subcontracting in further education and skills’, recognises the acute economic challenges FES providers are facing as a result of COVID-19, as well as the broader decline in subcontracted provision over recent years. It explores what makes for high-quality FES provision delivered through subcontracting and asks how inspection and regulation might need to adapt as a result of a rapidly evolving landscape.

Ofsted is responsible for inspecting the quality of education offered by directly-funded FES providers, but inspectors do not report on all subcontracted provision. However, the inspectorate has increased its focus on subcontracting over the past 2 years, in response to concerns about the quality of some subcontractors.

Currently, Ofsted inspections give a rounded judgement of a directly- funded provider by sampling activities across the provision. The choice of subcontractors to sample is made within practical constraints, such as their location. These activities then inform the leadership and management judgement of the directly- funded provider and, where appropriate, the quality of education judgement.

The report suggests there are limitations to this approach and concludes that the oversight of subcontracted education could be improved by sampling more subcontracted provision. Therefore, Ofsted is seeking to make inspecting and reporting on subcontracted provision more comprehensive and transparent by:

  • working with the Education and Skills Funding Agency (ESFA) to improve access to timely and accurate data on the number and size of subcontracting arrangements held by a directly-funded provider
  • increasing awareness among inspectors of Ofsted’s available inspection resource, in order to investigate more subcontractors
  • changing the way evidence is recorded to systematically and consistently include information about all subcontractors visited
  • where appropriate, highlighting more subcontractors in inspection reports

In particular, more accurate data from the ESFA would allow Ofsted to arrange to visit subcontracted provision that was far away, because out-of-region resources could be factored into planning.

Her Majesty’s Chief Inspector, Amanda Spielman, said:

The financial stresses of the COVID-19 pandemic and ESFA’s tighter regulations around subcontracting make this an important and timely report. Over the past two years we have increased our focus on the management of subcontracted provision. However, this new research has highlighted the importance of reviewing subcontractors within our current model.

We are open to exploring how we could directly inspect subcontractors in the future, but that would need significantly more financial resource and better data. So, for now we will continue to inspect subcontractors as part of our inspections of directly-funded providers. But I’m confident that the changes set out in today’s report will make our oversight more meaningful and transparent.

The report is based on visits to 14 subcontractors in November and December last year; focus groups with 38 inspectors; and desk-based analysis of inspection reports and evidence bases, as well as other publicly available data on subcontracting.

End to ESFA Funding Subcontracting Brokers

Article by Billy Camden published in FE WEEK

Using brokers in subcontracting deals will be a “serious breach” of funding rules next year, the government said today as it announced the first steps to clamping down on subcontracting in FE.

Training providers have also been told to publish a “rationale” for subcontracting, their management fee structure and a list of subcontracting partners on their websites by October 31.

The measures were outlined in new subcontracting guidance for 2020/21, published today by the Education and Skills Funding Agency.

Last month, the ESFA released its response to a consultation that was run earlier this year and proposed major changes to subcontracting.

The agency wants to see a “significant reduction” of the practice in FE and will roll out strict measures, such as volume caps, over the next three years.

For academic year 2020/21, the ESFA said today that the use of brokers to source a subcontracting partner is “not permitted and will be treated as a breach of contract/funding agreement”.

“By brokers we mean where a third-party matches, for a fee, a provider with an unused allocation with a provider that can secure enrolments of learners to utilise it,” the agency explained, adding that they have “strengthened our levers to act and will do so where we find cases of provision being subject to brokerage”.

FE Week has reported on multiple cases of brokers cashing in on last minute subcontracting deals in recent years.

In March we revealed on how a learner find firm was attempting to broker a subcontracting deal for 16 to 18-year-old trainees who had already completed their placement at football clubs.

The only other change coming into force next year is a requirement for “all providers to publish a clear educational rationale for their subcontracting position on their website alongside their management fee structure and a list of subcontracting partners”.

The guidance states that directly funded institutions should “set out in their organisation’s strategic aims their reason for subcontracting, which must enhance the quality of their student offer”. The rationale “should be signed off by governors and boards and published on their website”.

The ESFA said they expect this information to be published by 31 October 2020 and it should be “easy to navigate to from the front page of the organisation’s education and training web pages”.

Other reforms will be introduced in 2022 and 2023.

Twin Call for Supply Chain Partners for DWP CAEHRS

Twin Employment and Training (TET) is seeking Expressions of Interest (EOI) from potential supply chain partners for the DWP Provision of Employment and Health Related Services (CAEHRS) from 2020 to 2025.

CAEHRS is designed to support the provision of Employment and Health related programmes and will be available for use across government and other public sector contracting authorities, all of which are identified in the contract notice.

With the changes in economic conditions triggered by the impact of COVID-19 this is likely to become a key area of strategic focus for all these organisations over the short and potentially medium term.

Alongside a strong track record of local service integration, potential partners must be able to demonstrate an innovative approach to the Lots that they seek to deliver to, as well as high performing provision with specialist cohorts in the following lots:

• Central England (Lot 1)
• North East England (Lot 2)
• North West England (Lot 3)
• Southern England (Lot 4)
• London & Home Counties (Lot 5)
• Wales (Lot 6)
• Scotland (Lot 7)

Key areas of support and delivery

• Employability
• Criminal Justice and Offender Related Services
• Health and Wellbeing Related Services
• Education and Skills
• Careers and Advice Services
• Enterprise and Business Support
• Youth
• Housing
• Addictions
• Labour Market Intelligence and Employment Related Data Services

Customer groups include:

BME groups/ Ex-military personnel/ Ex-offenders/ Faith based/ Gangs/ Graduates/ Homeless people/ Lone parents/ Male offenders/ Over 25s/ Over 50s/ People who are drug or alcohol misusers/ People who are hearing impaired/ People who are visually impaired/ People with autism/ People with learning difficulties/ People with mental health needs/ People with other physical health conditions/ Professionals/ executives/ Refugees/ asylum seekers/ Whole families/ Young people (NEET)/ Travellers.

Special Note:As part of our commitment to local communities we are particularly interested in hearing from you if you are from the voluntary, CIC or charity sector.

Interested?
If these DWP programmes are of interest to your organisation, please complete our short EOI form and return to businessdevelopment@twinuk.com by mid-night 14th July.

EOI’s received after this time will not be accepted, please include the name of your organisation in the file name when returning your EOI.

If you have any difficulties completing this EOI or have any other questions please contact us here, businessdevelopment@twinuk.com

Reforms to Subcontracting for Learners Over 16 and the Merlin Standard!
April 6, 2020
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If you have read the article by Patrick Tucker in FENews published on the 3rd April regarding the ESFA’s consultation on subcontracting, you will have also read his views on Proposal 9: Introducing a Standard for Management of Subcontracting.

The references he makes in this section to the Merlin Standard are both out of date and incorrect.

The Standard was desgned to be relevant to DWP Prime Contractors and their Supply Chain Partners / Subcontractors. However, a high proportion of DWP Primes use Supply Chain Partners / Subcontractors to deliver a range of contracts and services and these have successfully been included within the Prime Contractors Merlin assessment.

For example, ESFA funded Apprenticeships, National Careers Service and Adult Education Budget, ESFA / ESF Skills Support for the Unemployed, Skills Support for the Workforce, the NCS Trust funded National Citizen Service, Big Lottery projects, Ministry of Justice, NHS and Local Authority funded programmes have all been included within Merlin assessments.

The Standard is built upon the following eight fundamental and integrated Principles:

If you want to find out more about the Merlin Standard and the benefits both Prime Contractors and their Supply Chain Partners have gained from the Prime being assessed against the Standard visit: https://merlinstandard.co.uk/benefits/

ViewPoint: It’s Time to Take on the Subcontracting Profiteers
February 19, 2020
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By SIMON ASHWORTH Chief Operating Officer, Association of Employment and Learning Providers

Subcontractors account for more than 10 per cent of ESFA funding. They need overseeing properly, says Simon Ashworth

It was good to see the ESFA’s Peter Mucklow in edition 306 of FE Week confirming government recognition that subcontracting plays an important role and that there will be not be a complete ban on it.

Some interesting numbers were published as part of the ESFA’s consultation: 674 prime providers subcontract provision to 2,288 subcontractors. The total value of subcontracted provision is £484.5 million – or 10.6 per cent of total ESFA funding. These are big numbers, so it’s no wonder the regulators are keen to ensure appropriate oversight, quality and robustness of provision.

Unfortunately, the ESFA has yet again missed a trick – by failing to implement a cap on fees and charges which could address ‘profiteering’ from subcontracting. They make it clear, though, that they “do not expect funding retained to exceed 20 per cent”, and have linked this to two points previously raised by the Association of Employment and Learning Providers (AELP). Firstly, if more than 20 per cent of the funding is retained, it raises questions about the capacity of the subcontractor to deliver. Secondly, can good quality can be achieved when funding is so reduced?

Apprenticeship subcontracting has already been reformed with the removal of whole programme subcontracting. And the opening up of the Apprenticeship Service to non-levy employers will allow hundreds of providers on the main Register of Apprenticeship Training Providers (RoATP) to access funding directly, without a non-levy contract.

This will impact on those subcontracting relationships – study programmes, traineeships, adult education – which have hitherto been unable to obtain funding. In the case of AEB, a move to full procurement which rewarded prime providers and subcontractors that actually deliver would also reduce the need for subcontracting.

The proposals around geographical restrictions are attracting the most questions from providers. The “no more than one hour away from the prime contractor by car” pledge begs a question: if a prime provider is undertaking the minimum checks as required by the funding rules, then distance should make no difference in terms of oversight of the relationship. What matters, surely, is that properly checked subcontractors might be based miles from their primes while learners might be on their doorstep.

The ESFA also acknowledged that when working with national employers, a distance arrangement for subcontracting “is beneficial”. The focus on geographical restrictions is more about ‘out of area’ funding, particularly the expectations and justification of grant funding being spent on subcontracting in other far-flung areas of the country. The test is whether provision is supporting the local community or being used to generate additional income.

To date, Ofsted has chosen not to inspect subcontractors directly, and they recently gave me an example of why: a subcontractor that worked with three prime providers, where two-thirds of the provision was good and a third poor. The underpinning rationale was that two of the prime providers had full and suitable oversight and supported the subcontractor appropriately, while the third prime provider took a management fee and had no oversight. This highlights the importance of considering the role that the prime provider has in the process (rather than looking at subcontractors in isolation). But political pressure will probably require Ofsted to inspect a selection of the larger subcontractors as part of their risk-based approach.

The ESFA certainly don’t like managing agent models, and within the sector there are still examples of providers that operate as managing agents in all but name – subcontracting out comparably large portions of their allocations. The ESFA is now proposing a phased transition from all providers to a subcontracting limit of just 10 per cent of their total ESFA post-16 income in 2023-24.

Again, this will be a real challenge for parts of the sector that have for too long relied on subcontracting. Ultimately if the funding isn’t being used, let’s get it reallocated to providers who can spend it directly.

Government to Consult on Subcontracting Limits

The government is set to launch its consultation on a radical overhaul of subcontracting rules this week – and is expected to include a proposal to limit out-of-area deals.

Government to consult on subcontracting limits
Eileen Milner

Eileen Milner, the chief executive of the Education and Skills Funding Agency, sent a sector-wide letter in October warning of rule changes and that she will take strong action against any provider that abuses the system.

She said there were 11 live investigations into subcontracting at the time, with issues underpinning them ranging in seriousness from “complacency and mismanagement”, through to matters of “deliberate and systematic fraud”.

As per Milner’s letter, areas expected to be under consideration in the consultation include “placing limits on the permitted geographical distance between a directly funded institution and the location where subcontracted provision is delivered”.

It comes just months after the Greater London Authority announced plans to end out-of-area providers subcontracting in London.

This year, the GLA provides around £14 million of AEB grant funding to providers located further than what is considered to be a “reasonable travel-to-learn distances for London learners”.

Officials say the majority of this funding is subcontracted to training providers based in London who are then charged a “substantial” management fee.

Mayor Sadiq Khan has now announced plans to stop funding for providers based outside the capital’s fringe – typically more than 30 miles away from central London.

Aside from out-of-area subcontracting, the ESFA’s consultation is expected to cover how much funding can be subcontracted by a single provider, actions to prevent non-compliance, failure and fraud, and potentially precluding the use of some subcontractors.

It is not expected that the ESFA will suggest imposing a cap on management fees under subcontracting arrangements, as called for by sector bodies such as the Association of Employment and Learning Providers.

Milner said at the time of the October letter that where “poor subcontracting practice is evident to us we will act decisively”.

The review will be concluded this academic year and the ESFA plans to start implementing the changes at the start of 2020-21.

There have been a number of high-profile subcontracting scandals in recent years, including the Luis Michael Training case where its owners, which included two former professional footballers, created “ghost learners” and were jailed for over 25 years combined.

The most recent subcontracting scandal, exposed by FE Week, involved Brooklands College and resulted in the ESFA demanding a £20 million clawback.

Milner has said the ESFA will, in future, be “more forensic in our examination of the data and information available to us to hold individuals and organisations to account”.

“We will recover public money where appropriate,” she added in her letter from October.

The ESFA isn’t the only body taking a closer look at subcontracting: Ofsted announced in November that it was launching research into the practice.

AELP Fears re ESFA Subcontracting Ban
November 19, 2019
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The Association of Employment and Learning Providers (AELP) has today recommended a new, more “robust approach” to subcontracting in an effort to avoid an outright ban.

Subcontracting in FE, the practice of one provider paying another to deliver the training, has never been far from scandal and controversy. It has already been banned for advanced learner loan funded courses.

AELP fear funding agency considering outright subcontracting ban

In what the AELP describes as a “last chance saloon” for subcontracting apprenticeships and adult education budget funding, its chief executive, Mark Dawe, claims “by incorporating the recommendations in our submission into its rules, the agency can avoid ministers demanding a ban”.

The ESFA announced plans last month for a radical overhaul of its subcontracting rules amid high-profile cases of fraud, while Ofsted has launched research into the practice.

In its submission, the AELP said the “vast majority” of subcontracting is “high quality” and officials must not take a “damagingly blunt” approach to address the behaviours of a small number of providers.

The requirement and expectations of main providers who subcontract out government funding should be “much more robust” in order to ensure integrity.

AELP has produced a checklist of the “minimum expectations” of the main provider, which they say is significantly above and beyond the current ESFA rules and “should be adopted across the sector”.

This includes: acceptable fees, charges and additional services, quality monitoring and quality assurance, MIS, audit and ILR services, and contracting management (read the full report here).

The association says there also needs to be clarity on the “different types of subcontracting and what is and what isn’t a subcontract to help alleviate confusion across the sector, including with employers”.

AELP has used its submission paper to again call again for fees and charges not to exceed 20 per cent of the funding – a recommendation that has been adopted by the Greater London Authority and other mayoral combined authorities with devolved adult education funding.

This maximum cap would “block the profiteering of a small number of providers who commoditise their privileged access to government funding and ensure value for money”.

AELP adds that there should be a clear policy on management fees and charges being only applicable to core funding and not additional funding “designed to support specific groups of learners or to support certain additional needs”.

ESFA should also procure funding from providers that is “continuously subcontracted out on a transitional basis”, the association’s submission said.

“Recent examples of subcontracting malpractice do not justify at all a call for an outright ban on subcontracting in the sector, but a much more robust approach on the part of the ESFA and Ofsted would make a huge difference in stopping further examples occurring,” Dawe (pictured) said.

“Over the last ten years, AELP feels that the ESFA has rather dragged its heels in making the required changes needed in its funding rules to put the issue to bed and we are probably now in the last chance saloon.”

He added: “Let’s have no more prevarication around this issue which has been damaging the sector’s reputation for far too long. Change the rules now.”

Eileen Milner, the chief executive of the ESFA, sent a sector-wide letter last month warning of rule changes to subcontracting and that she will take strong action against any provider that abuses the system.

She said there are currently 11 live investigations into subcontracting, with issues underpinning them ranging in seriousness from “complacency and mismanagement”, through to matters of “deliberate and systematic fraud”.

She revealed the government will review its current subcontracting rules later this year.

Ofsted’s research will mainly look at whether management fees, which have controversially grown to as much as 40 per cent on subcontract values, are having a detrimental impact on learners’ education.

There have been a number of high-profile subcontracting scandals in recent years. The most recent involved Brooklands College and resulted in the ESFA demanding a £20 million clawback.

Research into Further Education Subcontracting Launched
November 7, 2019
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Ofsted is launching a new research project to look at the subcontracting landscape within further education #FE

Subcontracting remains a popular option for FE providers. Last academic year, subcontracting accounted for around £650 million in government funding on adult learning and apprenticeship provision and also fully or partially funded courses for over 25,000 students aged 16 to 19 at hundreds of subcontractors.

Most FE providers were judged as good or outstanding at their last inspection. Since February 2018, we have increased our focus on the management and quality of subcontracted provision during inspections, and this increased focus continues in our new education inspection framework (EIF).

A subcontractor’s offering cannot be disentangled from the contract agreed with the main provider. Therefore, we place responsibility for learners’ experiences on the main provider and do not directly inspect standalone subcontractors. This research will explore the relationship between the main provider’s contracting arrangements and the quality of provision offered by subcontractors.

The aims of our new research are to learn more about the subcontracting landscape and the impact that a contract between a main provider and subcontractor can have on the learning experience. The research will also inform how we inspect main providers that choose to use subcontracted provision.

This autumn, we will carry out pre-arranged visits to a variety of subcontractors that have contracts with FE providers we’ve recently inspected. At the same time, we will examine our previous inspection reports for references to subcontracting, and hold focus groups with inspectors about the process of evaluating subcontracted learning.

Visits are not inspections and will not result in a written report for the subcontractor.

Ofsted Deputy Director, Further Education and Skills, Paul Joyce, said:

We made a commitment to increase our focus on subcontracting, which remains a major part of the FE landscape. I hope this research will give us more insight into the experience learners get at a provider, which in turn will help us refine this part of our inspection work.

We will work with subcontractors who take part in the research to make sure we do not place an additional burden on staff. All visits will be carried out purely for research purposes and will not double up as inspections. This research is part of our commitment to be a force for improvement in the sectors we inspect, and to make sure that everything we do is supported by evidence.

ESFA Crack Down on Poor Sub-Contracting Practice – Sector Response

ESFA Chief Executive writes to post-16 education and training providers to underline the strict sub-contractor rules.

ESFA Chief Executive, Eileen Milner, has written to education and training providers to remind them that the ESFA will take action where there is evidence any provider is not playing by its strict sub-contracted rules.

Under the rules, a sub-contractor can deliver education and training on behalf of a lead provider in receipt of ESFA funds. However, lead providers have a legal duty to make sure public funds are spent according to the ESFA’s sub-contracting rules, so that learners receive the best possible education or training. The majority of subcontracting is done well and in accordance with the rules.

In accepting ESFA or public funds, providers confirm they accept the terms and conditions of their funding agreement, and that they have a process in place to ensure that sub-contracted provision is delivered properly, securely and meets ESFA rules.

Sector Response

Jim Carley, Managing Director, Carley Consult Ltd, said:

“I personally think a review of this kind is welcome. Whilst providers subcontracting over £100K are obligated to have their compliance with ESFA subcontracting rules independently audited, there are no standards set in terms of who an appropriately competent auditor should be. The result is many providers look for the cheapest audit option, rather than the most rigorous, which in the extreme is no more than a rubber stamping exercise.

“Those subcontracting less than £100K are not subject to any type of audit! At the same time, the ESFA need to be clearer in their expectation. In some cases the rules for subcontracting vary between provisions (e.g. AEB and Apprenticeships) which results in a confusing message on compliance. The new requirement for prime providers to provide a full breakdown of their costs in subcontract agreements is also unnecessarily heavy handed. More work is needed on all sides.”

Association of Employment and Learning Providers chief executive Mark Dawe said:

“The ESFA letter correctly sets out that subcontracting can be done well for the right curriculum reasons and in our view underlines why ITPs and colleges must have strong governance and auditing arrangements in place to ensure that either abuse or inefficient use of public money is avoided. 

“However AELP believes that the agency could still go much further in limiting the potential for misuse if it followed the GLA’s example and imposed a 20% cap on management fees under subcontracting arrangements.  We haven’t seen any justification for it not taking this step after the Commons education committee made its recommendations a year ago.”

Matt Garvey, Managing Director of West Berkshire Training Consortium comments:

“At WBTC have successfully subcontracted for many years with praise from Ofsted and auditors on the way we support, manage and risk assess our subcontractors. I welcome the somewhat belated intervention by the ESFA, malpractice has been rife for too long. One intervention, not mentioned in the letter, is that the ESFA could take a more active interest in disputes between main providers and their subcontractors. Sadly, to date, they have viewed these as contractual issues between the two parties and have taken little or no interest. Yet such disputes  can easily lead to learners and employers being disadvantaged. Through this announcement I hope that the ESFA are starting to realise that they need to be more actively involved in the sector; after recent scandals at AAA and Brooklands we can all understand why.” 

Association of Colleges (AoC) Deputy Chief Executive, Julian Gravatt said:

“It’s clear that this review is necessary, and consulting on changes for 2020 is a useful start to firm up the subcontracting process. We will use this opportunity to submit our response to the consultation.”

The letter builds on the action the ESFA has already taken this year to tighten its sub-contracting requirements.

This includes launching a review to improve subcontracting arrangements, more robust examination of data and information, holding individuals and organisations to full account, pursuing all avenues available and, where appropriate recovering public money.

Later this year, ESFA will also be seeking views from the sector to inform the ongoing review of sub-contracting.

Detailed ESFA Guide: Subcontracting: Using Funding to Offer Education and Training

Information for providers of adult education and training services, including apprenticeships and traineeships on subcontracting ESFA funding.

Contents
  1. Subcontracting: for the first time
  2. Subcontracting: second-level
  3. Providing external assurance on subcontracting controls
  4. List of declared subcontractors (formerly the ‘subcontracting register’)

A lead provider is a college, training organisation or employer that has a direct contractual relationship with the ESFA.

A subcontractor is an organisation that is engaged in a contractual and legally binding arrangement with one or more lead providers, to deliver education and training provision that the ESFA funds.

Each lead provider and subcontractor must have a valid UK Provider Registration Number (UKPRN).

ESFA recognises that subcontracting has an important role to play in delivering quality learning to apprentices and adult learners. In recent years, we have strengthened our funding rules on subcontracting and we are continuing to do so. We expect providers to maximise the amount of funding that reaches front line delivery of high-quality learning.

When subcontracting, ESFA will require providers to:

  • clearly describe, before each subcontracting relationship is agreed the reason for subcontracting and all services they will provide and the associated costs when doing so. This will include a list of specific costs for managing the subcontractor, quality monitoring activities, and for any other support activities offered by the main provider to the subcontractor
  • ensure all costs are individually itemised and describe how each cost contributes to delivering high-quality learning. Providers must also explain how such costs are reasonable and proportionate to delivery of the learning or apprenticeship training
  • include a breakdown of all services and costs in each subcontract

ESFA will, ready for delivery from 1 August 2019:

  • revise funding rules and associated compliance measures to incorporate the requirements set out above
  • implement a risk-based approach for monitoring these rules
  • impose compliance measures when appropriate

These expectations will be reviewed in 18 months.

The implementation of the revisions to the AEB and apprenticeship funding rules will apply to new learner, or apprentice starts from 1 August 2019. We realise there should be an implementation period to allow providers to adjust to the changes and to revise their contracts with their subcontractors.

The implementation period of the revised rules will apply as follows:

  • From 1 August 2019 for new learner and apprentice starts where a new subcontract is yet to be agreed and entered into, and
  • By 30 November 2019 for new learner and apprentice starts where revised subcontracts are required

This means that from 1 December 2019, these revised subcontracting rules apply to all new learner or apprentice starts

Subcontracting: For the First Time

If the funding rules you are working to require permission from the ESFA to subcontract for the first time, you must obtain the ESFA’s written permission before doing so.

Subcontracting for the first time: seeking written approval (PDF, 150KB, 4 pages) describes the process for getting permission to subcontract funding for education and training.

Along with the request to subcontract, you must also provide a report from an external auditor.

Subcontracting: Second-Level

If the funding rules you are working to allow subcontracting to a second level (where a subcontractor further subcontracts to another legal entity), you must first obtain the ESFA’s written permission. You must obtain permission from the ESFA to subcontract to a second level every year.

You can find the information we need in order to review requests from providers to subcontract to a second level:

Subcontracting to a second level: seeking written approval (PDF, 156KB, 6 pages)

Providing External Assurance on Subcontracting Controls

The ESFA funding agreements contain a clause about an annual subcontracting assurance requirement. The clause requires lead providers that will subcontract more than a defined level of provision to obtain a report from an external auditor that provides assurance on the arrangements in place to manage and control their subcontractors. The clause requires lead providers in scope to supply us with a certificate confirming that the report provides satisfactory assurance.

We’ve published guidance on the clause and the information we need from lead providers.

List of Declared Subcontractors (formerly the ‘subcontracting register’)

The list of declared subcontractors provides information about subcontractors that hold contracts worth at least £100,000 in aggregate with one or more ESFA-funded providers of adult education and training services, including apprenticeships and traineeships.

Subcontractors are shown with their lead or main provider/s and the individual values of their contracts.

Some subcontractors are ‘lead or main providers’ in their own right. We have used data taken from subcontractor declarations that lead or main providers submit each funding year.

Published 31 January 2018 
Last updated 10 July 2019 + show all updates

  1. 10 July 2019 We have updated the first part of this page to reflect that our funding rules on subcontracting apprentice training have been strengthened.
  2. 6 August 2018 Added information explaining our intention to work with the sector to develop and publish expectations around subcontracting fees and charges in the coming months.
  3. 31 January 2018 First published.