Subcontracting (fees & charges) Policy 2018/19

Scope

The policy statement, which is reviewed annually, details how Progress to Excellence Ltd applies funding to all supply chain activity supported with funds supplied by the Education and Skills Funding Agency (ESFA) or any successor organisations.

Context

The policy is a mandatory requirement that must be in place prior to participating in any subcontracting activity from 1 August 2013. The content of this policy has been developed in line with AoC/ AELP Common Accord, the ESFA Funding rules and the LSIS Supply Chain Management document.

Overarching Principle

Progress to Excellence Ltd (PtoE) will use its supply chains to optimise the impact and effectiveness of service delivery to the end user. PtoE will therefore ensure that:

  • Supply chain management activities comply with the principles of best practice in the skills sector. In particular, they will be guided by the principles given in the LSIS publication, “Supply Chain Management – a good practice guide for the post-16 skills sector” (Nov 2012 and subsequent iterations).
  • PtoE will, at all times, undertake fair and transparent procurement activities, conducting robust due diligence procedures on potential subcontractors to ensure compliance with the Common Accord at all levels and to ensure the highest quality of learning delivery is made available; demonstrating value for money and a positive impact on learner lives.
  • The funding that is retained by PtoE will be related to contract management. This contract management and the levels of funding being retained, will be clearly documented and agreed by all parties. The rates of such retained funding will be commercially viable for both sides and will be negotiated and agreed in a fair and transparent manner. They will be proportionate to the actual contract management being undertaken.

Where disputes between supply chain partners cannot be resolved through mutually agreed internal resolution procedures, PtoE will submit to independent outside arbitration or mediation and abide by its findings. Contract documents will require both parties to agree that the achievements of supply chains are attained through adherence to both the letter and spirit of contracts or partnerships. Signatories therefore commit that all discussions, communications, negotiations and actions undertaken to build, maintain and develop supply chains will be conducted in good faith in accordance with the overarching principle.

 

Rationale for Subcontracting

In line with overall strategic objectives of developing enterprise, employability, expertise and economic impact, PtoE engages with subcontractors to enhance the quality of the learner offer in the instances listed below:

  • To temporarily expand provision to meet a short term need
  • To provide immediate provision whilst expanding direct capacity. This might include working with subcontractors to explore and learn about new  frameworks or sectors prior to investment in resources
  • Providing access to, or engagement with, a new range of customers
  • To support another provider to develop capacity/ quality
  • To provide niche delivery where the cost of developing direct delivery would be inappropriate
  • To support employers with a wide geographic requirement.

Quality Assurance

Subcontracted activity is a fundamental part of PtoE’s provision. The quality of the provision will be monitored and managed through the existing PtoE quality assurance processes and procedures, as amended in order to fully encompass all subcontracted activity. We will continue on an ongoing basis to improve the quality through:

  • Pre-contract activity which assesses the capability, capacity and readiness of the subcontractor to deliver the proposed learning
  • Contract reviews which are undertaken on a monthly/ bi-monthly/ quarterly basis which encompass the quality of provision delivered, learner progress, teaching and learning and contract performance
  • Advising on the quality of provision and ways to improve working between Progress to Excellence Ltd and the subcontractor.

This policy positions subcontracted provision as a core part of PtoE activity, to enable continuous improvements in the quality of teaching and learning for both PtoE and its subcontractors. This will be achieved through the sharing of effective practice across the supply chain, for example through the self-assessment reporting process.

Publication of information relating to sub-contracting

In compliance with the ESFA and other agency funding rules that apply, PtoE will publish its subcontracting fees and charges policy and actual end-of-year subcontracting fees and charges on its website before the start of each academic year (and in the case of actual end of year data, as required by ESFA).

PtoE will ensure all actual and potential subcontractors have sight of this policy and any other relevant documents.

Funding percentage breakdown:

  • The typical percentage retained to manage subcontractors is 20% and 80% reimbursed to the subcontract partner
  • The PtoE management fee is 20% of all funding drawn down against the provision to be delivered. An additional 2% against each learner will be paid to the subcontractor at the end of the qualification if the learner achieves in a timely manner.

For existing subcontractors, the management fee is 15% based on an overall QAR of 80%, timely QAR of 80% along with adherence to ESFA funding rules and OFSTED requirements. These figures represent the total cost that PtoE incurs in effectively identifying, selecting and managing all subcontracted provision. This covers the cost to PtoE of any additional support the Company deems necessary to ensure the quality of teaching and learning and the success rates of any subcontracted provision. PtoE will also promote sharing of good practice across the partnership and help improve delivery to our customers. Monthly action points will be corresponded to the subcontract partner to cover performance, payments, and quality assurance matters. Regular review meetings will be conducted to cover the action points.

Payment terms

Payment will be split between an initial payment (made after the submission of eligible start paperwork completed to ESFA requirements), on-programme payments (made monthly with payment dependent upon receipt of satisfactorily-completed learner reviews submitted to PtoE in a timely manner) and an achievement payment (made upon receipt of proof of learner achievement that satisfies ESFA requirements).

Upon satisfactory evidence, PtoE will pay associated invoices within 30 days of the ESFA payment being received. The payment will be made by BACS transfer; however, if any supporting evidence is queried by PtoE then payment will be withheld until these queries are resolved and payment will be then made at the earliest possible opportunity.

How and when the policy is communicated and discussed with current and potential subcontractors

This policy will be reviewed annually and updated as required. It will be published on PtoE’s website by the July prior to the start of the academic year in which it will be applied. Potential subcontractors will be directed to it as the starting point in any relationship followed by due diligence as part of PtoE’s selection and quality management process. The policy will be provided and discussed with existing providers during their due diligence annual review. All potential subcontractors will be given a deadline for submitting applications.

Following due diligence, a written strategic and financial business case for each potential subcontractor is submitted to senior management for approval. The outcome is then communicated to potential subcontractors.

Where the policy is published

In compliance with ESFA funding rules that apply, PtoE will publish its Subcontracting policy on its website before the start of each academic year and actual end-of-year subcontracting funding as required by the ESFA. This will only relate to ‘provision subcontracting’ ie subcontracted delivery of full programmes or frameworks. It will not include the delivery of a service as part of the delivery of a programme (for example, buying the delivery of part of an apprenticeship framework or standard or outreach support). Any provision subcontracting lists will need to be agreed with local ESFA officials prior to publication.

Contingency plans

In the event that PtoE needs to withdraw from a subcontract arrangement, a subcontractor withdraws from the arrangement or a subcontractor goes into liquidation or administration, PtoE will take steps to ensure that provision is made so that the learners involved are able to complete their qualifications.

For individual subcontract arrangements, risks have been considered as part of the selection process including losing qualification status, losing financial status, organisation sale/ change in ownership, staffing issues and funding for more than 1 year. Specific contingency plans for each subcontractor are developed as part of the subcontractor selection and quality management process to include operational aspects to ensure that learners can complete their qualifications.

Policy Review

Progress to Excellence Ltd will review this policy annually.

Subcontractor Fees

Supply chain fees and charges          
 Subcontractor UKPRN Start date End date Provision type Retention fee
Coaching Connexions Ltd 10031269 01-Aug-18 31-Jul-19 16-18 Apprenticeships

16-18 Traineeships

19+ Apprenticeships

20%
Glass & Fenestration Training Solutions 10040392  01-Aug-18 31-Jul-19 19+ Apprenticeships 15%

External Subcontracting Controls Certificate