Information: statement of expectations about the services providers of apprenticeships and adult education budget delivery, including traineeships, should offer their subcontractors

The ESFA have undertaken further work to develop their expectations about the services that providers of apprenticeships and adult education budget delivery, including traineeships, should offer to their subcontractors with the sector. ESFA  have now published our expectations, together with details of implementation arrangements.

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.

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.

2. Information: how T Levels will be funded in 2020 to 2021 academic year

We have published guidance for how T Levels will be funded in the 2020 to 2021academic year.

3. Information: change in payment dates from August 2019

We are changing the date on which we make payments from August 2019.

We are combining the adult payment dates into one and will pay the following funding streams on the 14th working day of the month:

• adult education budget (AEB)
• apprenticeships
• Advanced Learner Loans Bursary
• European Social Fund (ESF)
• National Careers Service
• 16 to 18 traineeships
• career learning pilots

Any payments relating to these funding streams will reach bank accounts on 20 August 2019, and then on the 14th working day thereafter.

If you have any questions, please contact us via email at [email protected].

4. Your feedback: your experience working with ESFA

We have a new customer experience team who want to make the ESFA easier to work with.

If you are a further education college, training provider or employer-provider, the team want to hear about your experience of working with the agency.

If you’re interested in taking part in some research, and providing feedback on prototypes between 15 July and 9 August 2019, please email [email protected]. Please include your available dates and use the subject line ‘research’, and the team will get in touch to arrange a suitable timeslot.