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19/04/2016 For more training and events visit lsect.com 1 Subcontracting funding summit #SFS16 19 April 2016 Agenda 10.30 Tactical versus strategic, and other key features of the EFA and SFA subcontracting rules for 2016/17 Nick Linford, author of the Sub-contracting Toolkit, published by AELP and LSIS 11:10 Ofsted’s approach to sub-contracting and best practice Phil Romain, Senior HMI, Ofsted 11:50 Break for refreshments and networking 12:10 Managing new and existing subcontracting relationships ~ getting due diligence and contracting right Morag Roddick, senior lawyer in the Eversheds education team 13:00 Break for lunch and networking time 14:00 Funding, data and compliance: Audit advice for prime and sub-contractors Karl Bentley, senior MIS & funding auditor manager at RSM 15:00 What does the longer term future of subcontracting look like? Nick Linford 15:30 Prime and subcontracting networking time 16:00 Subcontracting Funding Summit end

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Page 1: Subcontracting funding summit - LSECTlsect.co.uk/wp-content/uploads/2016/04/SFS16-slides.pdf · comprehensive and inclusive of all subcontractors. - Catch 22 Charity Limited Arrangements

19/04/2016

For more training and events visit lsect.com 1

Subcontractingfunding summit

#SFS16

19 April 2016

Agenda

10.30 Tactical versus strategic, and other key features of the EFA and SFA subcontracting rules for 2016/17Nick Linford, author of the Sub-contracting Toolkit, published by AELP and LSIS

11:10 Ofsted’s approach to sub-contracting and best practicePhil Romain, Senior HMI, Ofsted

11:50 Break for refreshments and networking

12:10 Managing new and existing subcontracting relationships ~ getting duediligence and contracting rightMorag Roddick, senior lawyer in the Eversheds education team

13:00 Break for lunch and networking time

14:00 Funding, data and compliance: Audit advice for prime and sub-contractorsKarl Bentley, senior MIS & funding auditor manager at RSM

15:00 What does the longer term future of subcontracting look like?Nick Linford

15:30 Prime and subcontracting networking time

16:00 Subcontracting Funding Summit end

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Thank you to our exhibitors today

Tactical versus strategic, and other key features of the EFA and SFA subcontracting rules for 2016/17

#SFS16

Nick Linford

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Nick BolesMinister for Skills

Funding context for 2016/17

CEO, Peter Lauener

16-19 (young)

19+ (adult) College/training provider

£

£

Study programmes

> Traineeship provider restrictions lifted

> Funding rates unchanged from 15/16

Highlights for 2016/17:

> Funding for in-growth limited/delayed

19+ funding

> Expanded advanced learner loan offer

> End of workplace non-apprenticeshipco-funding

> AEB budget frozen at £1.5bn

Highlights for 2016/17:

And EFA and SFA coming together (FAS2T)

But what will these mean for subcontracting? > Apprenticeship levy introduced forlast 4 months

Volu

me

subco

ntr

acti

ng

2001/02 2004/05 2007/08 2011/12 2015/16

Adult part-time

courses

Train to Gain

MCLsEnd of 51% ruleUnspent funds

Today is mainly about best practice for both prime provider and the subcontractor

Academic year

Franchise ---> Subcontracting --->

?- Reasons to believe

subcontracting will both rise and fall

- More on this from me at the end of today

The history of subcontractingRisk or reward?

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EFA funding rules for 2016/17Published last week

“all institutions using third parties to deliver any of their funded provision must follow the guidance in companion document Sub-contracting control regulations. The EFA expect written contracts that meet this guidance to be in place before any students are enrolled and are recorded on either ILR data or school census returns.

https://www.gov.uk/government/publications/advice-funding-

regulations-for-post-16-provision

“Historic funding eligibility problems have more often arisen where students are attending institutions outside of their normal recruitment area, particularly where this involves sub-contracted provision and in such cases additional safeguards are required from institutions for all such delivery. Given the known risks of irregularity in distance subcontracting the EFA will not normally fund such 16 to 19 provision subcontracted by institutions. A range of factors to be considered by institutions when deciding whether distance sub-contracting may be included in funding returns is set out in the separate document Sub-contracting control regulations paragraphs 24 -26.”

Sub-contracting controls 2016 to 2017

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/4178

86/Funding_Regulations_2015-16-Sub_contracting_regulations-v1.pdf http://feweek.co.uk/2016/01/29/first-efa-

subcontracting-data-published/

EFA subcontracting data published for first time

“The sub-contracting controls guide for 2015 to 2016 should be used until the 2016 to 2017 is published. That sets out EFA compliance and control requirements and advice for all directly funded institutions that use third parties to deliver provision.”

184 lead providers working with 467 subcontractors who taught 21,000 learners

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Scale of SFA subcontractingThe SFA publish subcontracted contracts (self-declared over £100k)

Based on self-declarations the SFA subcontracting market does appear to be shrinking. Result of reduced ASB funding? On the rise again?

Dec 2014

Subcontracted £919mContracts 4,218Av per contract £217,913

https://www.gov.uk/government/publications/sfa-subcontractors-list

£586m2,468

£237,615

End of 2013/14

Subcontracted £780mSubcontractors 1,435Av per subcontractor £544,554

Dec 2015

Dec 2015£586m1,106

£529,837

Skills Funding LetterIn last year’s funding letter, we noted concerns about how sub-contracting can divert the resources we provide away from the front line into the servicing of additional fees and charges; and we welcome the work the SFA has already done on this. In particular I welcome public transparency on the amount of fees and charges of lead providers and the new external audit assurance arrangements to ensure lead providers have the right capabilities to manage their sub-contracted delivery partners.

2016/17 Grant letter: http://tinyurl.com/zkrbsuf

What the 15/16 funding letter said

2015/16 Grant letter: http://tinyurl.com/jvwk2a4

“there continues to be levels of short term tactical subcontracting that are causing concern”

“Lead providers are required to publish their reasons for subcontracting as part of their fees and charges policies. You will strengthen these requirements to ensure subcontracting is consistent with the mission of the lead provider by revising the funding rules and taking action where providers do not comply.”

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SFA common funding rules

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/510970/SFA_common_funding_rules_2016_to_2017_V2_FINAL.pdf

“Your governing body or board of directors and your accounting officer (senior responsible person) must be satisfied that all your subcontracting meets your strategic aims and enhances the quality of your learner offer.”

What happens if proven to be tactical?

Additional SFA guidance

https://www.gov.uk/government/publications/sfa-financial-assurance-higher-risk-providers-and-subcontractors

“The purpose of this document is to identify the criteria that would prevent an organisation being considered for funding. This applies both to organisations seeking funding directly from the SFA and to those proposing to deliver education and training services funded by the SFA under a subcontract. The SFA includes in all its funding agreements the right to require a lead provider not to enter into or to stop subcontracting arrangements.”

Reasons SFA can also refuse to fund organisations or permit subcontracting arrangements includes information from awarding bodies identifying significant irregularities in the award of qualifications within the last three years.

Updated two months ago

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Subcontracting funding summitApril 2016

Inspecting subcontracted provision in further education and skills

Phil Romain, Senior HMI

How Ofsted inspects subcontracted provision.

Findings relating to subcontracting from our survey report Apprenticeships: developing skills for future prosperity.

Characteristics of weak practice.

Characteristics of good practice, with excerpts from recent inspection reports.

Session outline

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To clarify what it is that Ofsted inspects:

Ofsted inspects providers that are directly contracted with the funding agency.

Subcontracted provision of the direct contract holder is also included in the inspection.

The common inspection framework applies to subcontracted provision just as to directly contracted provision.

Inspecting subcontracted provision

Inspectors may inspect any provision carried out on behalf of the provider through subcontract(s) or partnership arrangements, including by subcontractors that hold additional direct contracts of their own.

Visits to subcontractors that are in scope will typically include the inspection of arrangements to quality assure and improve the provision by the direct contract holder.

The direct contract holder will need to demonstrate the performance of the subcontractor(s).

Inspectors will not include provision that the provider operates under subcontracted arrangements on behalf of other providers.

Inspecting subcontracted provision (2)

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Provider 1

Sub 2

Provider 3

Sub 1

Provider 2

Sub 3

Funding

Successful subcontracted provision was a rarity amongst the providers visited for the survey.

When inspectors identified poor-quality apprenticeships in subcontracted provision, they found that these apprenticeships were typically not central to the provider’s strategy and were not managed and monitored adequately.

Providers were frequently slow to improve the quality of apprenticeships offered by subcontractors.

Findings from our survey report -Apprenticeships: developing skills for future prosperity

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Subcontractors are not managed or monitored well.

The main contract holder does not set challenging targets for improvement.

Quality assurance activities do not cover key areas of performance.

Poor accountability.

Underperformance is not tackled early.

Poor practice

Programmes are not sufficiently informed by or aligned with local priorities.

Subcontractors disengaged from actively supporting assessors and trainers to improve their practice in teaching, learning and assessment.

The transfer of information on learners’ progress from subcontractors that will enable managers to intervene to support learners to achieve their qualifications is slow.

Poor practice (2)

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Providers identify and are clear about local priorities and select appropriate subcontractors to meet them –subcontractors know what is expected of them and what they need to do to meet these priorities.

Subcontractors are developed and supported by providers with a strong emphasis on learners’ success.

Mutual collaboration between subcontractor and providers and the sharing of good practice.

Subcontractors have appropriate resources, facilities and staff to support learning.

What does good subcontracting look like?

Subcontracted provision is regularly and comprehensively assessed by providers and intervention is timely.

Subcontractors provide timely feedback to providers on their performance and the progress of learners.

Subcontractors have a strong emphasis on good and outstanding teaching, learning and assessment.

Subcontractors have an understanding of their duties under the prevent guidance. The provision ensures appropriate measures are in place to safeguard learners.

What does good subcontracting look like? (2)

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Senior managers use appropriate data reports to ensure contract compliance and manage the performance of subcontractors and staff. They meet with subcontractors regularly to monitor the progress of individual learners.

- Skegness College of Vocational Training Limited

Partnerships have been developed well to ensure that subcontracted provision provides specialist programmes that complement the college’s own provision and its strategy to widen participation.

- Cornwall College

Recent examples

Managers ensure that the same high standards expected of their own provision are reflected in the provision for apprentices studying with subcontracted partners. The self-assessment process is comprehensive and inclusive of all subcontractors.

- Catch 22 Charity Limited

Arrangements for supporting and monitoring the performance of contractors are strong and as a result subcontractors’ apprenticeship success rates are high. Subcontractors meet together regularly to share best practice and participate in training activities.

- Progress to Excellence Ltd

Recent examples

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Managing new and existing sub-contracting relationships – getting it right

19 April 2016Morag RoddickSenior Associate

[email protected]

Managing Sub-Contracting in FEThe importance of getting it right

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Eversheds LLP | 19/4/2016 |Eversheds LLP |

The Importance of Getting it Right

−Challenging times in the FE sector

−Anticipate and avoid problems by:-• choosing the right partner• minimising risk through the contract terms• practical and effective disputes resolution

−Provide structure for effective relationship management

Managing Sub-Contracting in FEChoosing the right partner

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Eversheds LLP | 19/4/2016 |Eversheds LLP |

−Absolutely vital to effective contracting

−Type of Due Diligence• Legal• Financial• Commercial/operational

−Scope of Due Diligence

Choosing the right Partner

Eversheds LLP | 19/4/2016 |Eversheds LLP |

−SFA funding guidance• ensure the Sub has sufficient capacity, capability, quality and

financial standing to deliver provision

−Due Diligence Assurance Gateway

−Sub-Contractor Declaration Form

−Prepare audit trail

Choosing the right Partner

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Eversheds LLP | 19/4/2016 |Eversheds LLP |

−Make it your responsibility

−Third parties who can help?

−Carry out your own checks – don’t rely on the RTO

Choosing the right Partner

Managing Sub-Contracting in FEThe Terms of the Sub-Contract

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Eversheds LLP | 19/4/2016 |Eversheds LLP |

−Which type of contract to use?

−Who is contracting?

−What is included in the contract?

The Terms of the Sub-Contract

Eversheds LLP | 19/4/2016 |Eversheds LLP |

−Back to back obligations/risks

−Incorporate the funding obligations?

−SFA obligations• effective monitoring and control over subcontractor• provision of information and access• mandatory terms• ESF funds

The Terms of the Sub-Contract

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Eversheds LLP | 19/4/2016 |Eversheds LLP |

−Educational oversight – who wears the trousers?

−Clear quality standards & performance levels

−Audit & inspection rights

−Contract/performance review meetings

The Terms of the Sub-Contract

Eversheds LLP | 19/4/2016 |Eversheds LLP |

−Creation and maintenance of records required

−Oblige provision of information

−Provide specific details of the information required (what, when and how frequently)

The Terms of the Sub-Contract

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Eversheds LLP | 19/4/2016 |Eversheds LLP |

−Other legal terms to include in your subcontract

• Data Protection Act compliance• safeguarding• intellectual property• FOIA assistance• confidentiality• health and safety

The Terms of the Sub-Contract

Eversheds LLP | 19/4/2016 |Eversheds LLP |

−What’s this going to cost us?

−Clear payment amounts (or formulae) and details of payment dates

−Clear invoicing requirements

The Terms of the Sub-Contract

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Eversheds LLP | 19/4/2016 |Eversheds LLP |

−Duration• Fixed term• Rolling contract?

−Termination• Expiry• Breach - right to remedy?• Insolvency• Significant changes in funding requirements• On notice

−Intervention/step in

The Terms of the Sub-Contract

Eversheds LLP | 19/4/2016 |Eversheds LLP |

−Time of termination

−Teach out – contingency plan

−Recovery of materials and learner data

The Terms of the Sub-Contract

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Eversheds LLP | 19/4/2016 |Eversheds LLP |

If things go wrong:−Ensure reporting requirements provide enough information to spot areas of concern−Warranties/indemnities/guarantees−Set out how disputes should be resolved−Insurance obligations

The Terms of the Sub-Contract

Managing Sub-Contracting in FEEffective relationship management

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Eversheds LLP | 19/4/2016 |Eversheds LLP |

−Regularly monitor delivery/compliance

−Sufficient information provision to spot issues/concerns

−Scope to vary the contract terms

−Manage immediate risks but also think about the long term

Effective Relationship Management

eversheds.com©2016 Eversheds LLPEversheds LLP is a limited liability partnership

Morag RoddickSenior Associatet: 0121 232 1514 [email protected]

Eversheds LLP115 Colmore RowBirminghamB3 3AL

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Funding, Data and Compliance: Audit advice for prime and subcontractors

AUDIT | TAX | CONSULTING

What we’re covering today

Subcontracting Funding Summit 2016

• Funding Audit and Subcontracting – what we do for the agencies

• Common themes from SFA required subcontracting controls audits

• Tips on subcontracting

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FUNDING AUDIT AND SUBCONTRACTING

EFA, SFA and everything between

Subcontracting Funding Summit 2016

New Audit Approach for EFA subcontracted provision

D12 audit programme introduced from 2015/16

1Does the institution have any subcontracting arrangements in place?

Paragraph 4Paragraph 9

Auditors must be satisfied that evidence seen through audit testing of student files coincides with the institution's verbal confirmation on subcontracting existence.

2

Distant subcontracting: Does the institution recruit or deliver study programmes as part of a distant subcontracting arrangement? If applicable, has the institution met all requirements set out in the guidance?

Paragraph 24Paragraph 26

Institutions can deliver distant subcontracting study programmes but it should be by exception only. Auditors should seek evidence that the institution has reasonable justification for recruiting or delivering distant learning and that adequate controls are in place deliver the programme. These controls should already be in place before any recruitment of students (paragraph 25). The institution may be able to evidence correspondence to the EFA that it is recruiting or delivering distant subcontracting provision.

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Subcontracting Funding Summit 2016

3

Procurement arrangements: What procurement arrangements are in place to ensure that the institution has met all requirements as set out in the guidance?

Paragraphs 27 to 32

Institutions must ensure that they comply with current UK and European regulations on procurement when securing services of a subcontracting nature. Auditors may want to view the institution's procurement policy to ensure that it has been adhered to. Auditors need to ensure that conflicts of interests are transparent and eliminated from the procurement process. Where traineeships are being delivered, additional requirements must be met (see paragraph 32).

4Due diligence: Check that the institution has carried out all due diligence with any subcontractors.

Paragraphs 34 to 40

Auditors must be satisfied that the institution can evidence that it has carried out sufficient due diligence checks on all its subcontracting organisations. These will include financial and non-financial checks. Areas of interest will include the status of organisations (paragraph 35), financial health position, health & safety checks and capacity to deliver EFA standard academic programmes.

5

Contracts: Check that the institution has a signed contract with any subcontractor(s) which sets out the respective responsibilities.

Paragraph 28Paragraph 41

Existence of the contract(s) should be evidenced and sighted by auditors. Where institutions cannot evidence the existence of the contract, this would be non-compliance with the guidance and the ineligibility of the provision will have to be reported.

Subcontracting Funding Summit 2016

6

Control arrangements: What control arrangements are in place to ensure that the institution has met all requirements as set out in the guidance?

Paragraph 21Paragraphs 42 to 47

The institution must be able to demonstrate that it has sufficient control over the management of the contract. This will include controlling risks to public funds, that it can exercise its rights associated with the contracts (i.e. control over accepting or rejecting student enrolments, right of access to student documentation, etc. (see paragraph 43)).

7

Monitoring arrangements: What monitoring arrangements are in place to ensure that the institution has met all requirements as set out in the guidance?

Paragraphs 51 to 56

The institution must be able to demonstrate that it has sufficient monitoring arrangements over the management of the contract. This will include areas of eligibility, attendance and student progression as well as doing spot checks on the delivery of the contract. Auditors may want sight evidence of outcomes and how these are followed up. Spot checks should also be unannounced for each subcontract ensuring that students are questioned (see paragraph 52 & 53).

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Subcontracting Funding Summit 2016

8

Subcontracting with multiple contracts: Where a subcontractor is delivering other study programmes for other EFA funded institutions, are there adequate controls in place to reduce risks associated with these types of contracts?

Paragraphs 57 to 59

Auditors must be satisfied that there is no risk to funds (double funding) where subcontractors are delivering provision to multiple EFA funded institutions. The institution must be able to demonstrate which subcontractor is also delivering provision for other EFA funded institutions. If it cannot then auditors must revisit how robust the institution's controls as per question 6 above.

9

Is the auditor satisfied that there are no concerns with subcontracting arrangements or risks to public funds? If not please detail risks, funds at risk and recommendations.

Paragraph 16Paragraph 50Paragraph 57

Subcontracting Funding Summit 2016

D3 SFA Subcontracting Audit

1: Does the UKPRN on the Declaration agree with the UKPRN on the PDSAT Report 16S-490?

2: Does the name of the subcontractor on the Declaration agree with the name on the UK Register of Learning Providers website (www.ukrlp.co.uk)?

(Paragraph 2 of the Funding Rules 2015 to 2016)

3: Is there a legally binding contract in place with the subcontractor? (Paragraph 32 of the Funding Rules 2015 to 2016)

(FROM REVIEW OF THE CONTRACT ON-SITE)

4: Have all of the terms for inclusion in the lead provider's subcontract been included in line with paragraphs 35 to 45 of the Funding Rules 2015 to 2016?Note: Make specific reference to inclusion of ESF related clauses.

(FROM REVIEW OF THE CONTRACT ON-SITE)

5: Does the provider have procedures in place for monitoring its subcontractors, including monitoring compliance with ESF match funding requirements?

(Paragraph 46 to 49 of the Funding Rules 2015 to 2016)

6: If there is second level subcontracting, does the provider have in-year written approval from the SFA and have the details been recorded on the Declaration?

(Paragraph 50 to 51 of the Funding Rules 2015 to 2016)

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Subcontracting Funding Summit 2016

D5 ESF Match Funding Audit

Provider Subcontractors

TestTest

satisfiedYes/No

CommentsTest

satisfiedYes/No

Comments

1Have the provider and its subcontractors displayed ESF posters prominently in their premises?

www.gov.uk/government/publications/european-structural-and-investment-funds-useful-resources

2Have the provider and its subcontractors displayed the current ESF logo on their websites?

3Have the provider and its subcontractors displayed the current ESF logo on their learner enrolment documentation and training materials?

4

Do the provider and its subcontractors inform learners that they are on an SFA-funded programme which could be used as ESF match and is therefore part-funded by ESF?

Subcontracting Funding Summit 2016

D5 ESF Match Funding Audit – Poster Example

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Subcontracting Funding Summit 2016

D5 ESF Match Funding Audit

Provider Subcontractors

TestTest

satisfiedYes/No

Comments

Test satisfie

dYes/No

Comments

5

Do the provider and its subcontractors have a document retention policy for ensuring that all documents necessary to verify ESF funded provision are retained in line with contractual requirements (currently until at least 31 December 2030 for the 2014 to 2020 ESF programme)?

6

Do the provider and its subcontractors have in place an equal opportunities policy and action plan and a policy for sustainable development (including an environmental implementation plan)?

7Has the review of the provider's ILR data confirmed that ESF related data fields have been fully and accurately completed?

SFA ISSUES FROM CONTROLS AUDIT

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Subcontracting Funding Summit 2016

SFA Subcontracting Controls Audit

New requirements introduced September 2015

All providers with subcontracting arrangements with an aggregate value of £100,000 were required to have a controls audit

Work programme not prescribed by SFA – but clear referencing provided for what needed covering

Not a substantive audit and no funding opinion given

Subcontracting Funding Summit 2016

SFA Subcontracting Controls Audit

Needed to be completed by an appropriate external auditor

Work completed by 31 January 2016

Certificate completed by provider and signed by both parties which was submitted to the SFA (we did cover letter)

No requirement to provide report or implementation plan to SFA unless it is requested

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Subcontracting Funding Summit 2016

Subcontracting Controls Audit

So what do you think we found?

FIVE TIPS FOR SUBCONTRACTING

Or how Karl sees subcontracting changing in the near future…

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Audit Advice – Five Tips for Subcontracting

Spring Data Conference 2016

Do your homework – robust due diligence is essential especially of individuals and past performance

Think about where provision is – new geographic implications under devolution and demonstration of control

The Apprenticeship trap – what happens post April 2017?

Audit Advice – Five Top Tips for Subcontracting

Spring Data Conference 2016

Tactical subcontracting – Plugging a whole in the dam or a sign of something bigger?

Growing subcontracted income – How do you manage the growth and use 20p in every £1 earned?

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What does the longer term future subcontracting look like?

#SFS16

Nick Linford

Subcontracting future for…

Grant letter: http://tinyurl.com/zkrbsuf

Approximately £4.5bn by 2019-20

1. Apprenticeships (16-18 & 19+) £2.5bn

2. Devolved adult education budget £1.5bn

3. Advanced Learner Loans £0.5bn

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1. SFA told colleges in November that the levy is likely to kill off subcontracting

“In a model where the provider is the central element of the funding system I think the subcontractor and the college can plan that sort of strategy. I don’t think that strategy works at all in the system we [SFA] are talking about designing. So I think it is a huge problem.”

http://feweek.co.uk/2015/11/20/sfa-warns-colleges-of-a-future-without-sub-contracting/

“I would have to seriously question the motives for some of that and of course those organisations will need no encouragement at all to say ‘yes’ to employers.”

“You might be benefiting at the moment from subcontracting bringing money in, but from April 2017 those subcontractors will take that capacity and they will get funded directly through the apprenticeship voucher system.”

But what about the value of an employer exclusivity contract?

Plus, there will be a new provider register for apprenticeship levy

“We’re going to have to revisit ROTO, because one thing that employers are telling us really clearly is, we need to know bits of information about the providers … we actually want to get some confidence that these providers are going to deliver a certain set of services to us.

“What we’re going to be doing over the end of spring/early summer time is we’re going to have to have a big debate about this; we’re going to have to have a consultation with you about the requirements in the register and how we actually apply potentially new criteria going forward.”Keith Smith speaking at AAC16 March

http://feweek.co.uk/2016/03/18/sfa-to-consult-on-a-new-provider-register/

What might the criteria or ‘bits’ be?

Is this what the Institute of Apprenticeships with ‘police’?

What if you can’t get on it?

Will there be two or more registers?

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2. Adult Education Budget devolutionNick Boles to the SFA: “I would expect to see less sub-contracting as funding is put in the hands of users or allocated more locally. It will be for employers to choose their own provider of apprenticeship training when we move into the levy system, and I would expect providers to make their arrangements directly rather than via sub-contracting.

“As the AEB becomes devolved, it will be for local commissioners to take a view about the acceptability of sub-contracting for the money they allocate. Where sub-contracting forms a significant part of a local area’s provision, area reviews will want to consider any specific recommendations in the configuration of this provision as part of future arrangements. For 2016/17 you will want to ensure that sub-contracting practices are consistent with the need to achieve value for money in the sector, and to continue to take action against providers who are either operating unacceptable practices, or failing to provide clear and timely information.

“I would like you to report to me the controls in place by the end of March 2016 to protect the interests of learners and employers.”

Grant letter: http://tinyurl.com/zkrbsuf

2. Adult Education Budget devolutionMost recent clue to the AEB subcontracting future was in the 2015/16 AEB allocation letters

“You will notice that your funding statement includes a map setting out the local authority areas your learners come from. This is intended to help you understand your pattern of provision and aid any future commissioning discussions with local stakeholders.

“This will be particularly important for those of you working with areas that have a skills devolution agreement or a skills incentive pilot. In understanding the pattern of delivery, you should give specific consideration to the provision you sub-contract and how much of it is outside your immediate commissioning area(s).”

“As we move to local commissioning and devolution, commissioners will expect local resources to be deployed to support their local area. We will share information on where your sub-contracted provision is delivered with areas that have a skills devolution agreement or a skills incentive pilot to inform their discussions with you.”

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2. AEB analysis I’ve attempted to do…Provider home region

ASB non-appren14/15*

Of which learner in provider postcode

Of which learner in provider region

Yorkshire and the Humber

£180,793,982 £61,954,473 34% £94,324,257 52%

East Midlands £107,781,167 £31,898,558 30% £71,908,525 67%

South East £118,406,806 £39,922,527 34% £86,996,341 73%

East of England £89,384,849 £27,360,016 31% £66,795,353 75%

South West £90,213,061 £37,808,352 42% £70,421,473 78%

North East £75,583,275 £33,442,623 44% £59,251,649 78%

West Midlands £130,827,029 £76,464,005 58% £112,377,744 86%

London £320,401,670 £114,116,834 36% £275,405,808 86%

North West £167,772,625 £93,404,321 56% £153,184,159 91%

Total £1,281,164,465 £516,371,709 40% £990,665,309 77%

http://feweek.co.uk/2016/04/13/geographic-funding-data-published-for-first-time/

* Includes EAS funding as SFA would not share the funding data, so had to rely on 14/15 delivery data

Will each area have different subcontracting policy?

3.End of subcontracting for advanced learner loans

We will not allow the subcontracting of provision which learners fund with loans from the start of the 2017 to 2018 funding year.

If you only hold a loans facility agreement with us (and do not have a direct funding agreement for any other funding stream) in 2016 to 2017, you must not subcontract the delivery of provision funded with loans.

If you hold a direct funding agreement with us for the adult education budget (AEB) and/or apprenticeships and did not subcontract the delivery of provision funded with loans in 2015 to 2016 you must not subcontract the delivery ofprovision funded with loans in 2016 to 2017.

https://www.gov.uk/government/publications/advanced-learner-loans-funding-rules

If you hold a direct funding agreement with the Skills Funding Agency for AEB and/or apprenticeships and were in a subcontracting relationship for the delivery of provision funded with loans in 2015 to 2016 please note the following. You must not enter any new subcontracts for loans-funded delivery in 2016 to 2017 over and above those that

were in place for the 2015 to 2016 funding year. You must ensure all subcontracted loans-funded learning aims are completed by 31 July 2017, unless we have

given you exceptional permission, to extend beyond this date. If this applies you must retain evidence in the learners’ files of our decision, which will usually be in the form of

an email from our Central Delivery Service.

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Visit www.lsect.com to find out more

and register

Future workshopsthis month

AEB funding and curriculum planning workshop