Contracting and subcontracting
Responsibilities of providers and their subcontractors, including when they’re not on the Register of Apprenticeship Training Providers (RoATP).
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New for 1 August 2019:
- P170, P179, P180.8, P190 – New Rules: A statement of expectations is required when working with subcontractors
- P172– New Rule: Updated to show the types of delivery subcontractors that can be used
- P193 to P195 – Change to existing rule: Updated to reflect RoATP conditions
Main providers directly delivering training or on-programme assessment
You can only be funded for apprenticeship delivery to employers who do not pay the apprenticeship levy if you have a “contract for services – non-levy apprenticeship education and training” with us.
Funding for all elements of each apprenticeship will be routed through a single main provider that the employer has chosen. This includes funding for English and maths.
At the outset of each apprenticeship, a main provider and employer will agree a plan for its delivery. You must directly deliver some of the apprenticeship training and/or on-programme assessment associated with each employer’s apprenticeship programme. By apprenticeship programme we mean the apprentices that are being trained for the employer that has chosen you. The volume of training and/or on-programme assessment that you directly deliver for each employer must have some substance and must not be a token amount to satisfy this rule. It must not be limited to a brief input at the start of each employer’s programme or involve delivery to just a few of a large number of apprentices.
You can find further information in the document Using Subcontractors in the Delivery of Apprenticeships.
Agreeing the use of subcontractors with employers
You must take your own legal advice about whether, in subcontracting part of the service delivery, you are a contracting authority awarding a public contract as defined by the Public Contracts Regulations 2015. If you are, then you should comply with the provisions of the 2015 Regulations. You must provide a synopsis of the legal advice for inspection by us and employers on request.
You must publish on your website a broad statement of the approach you take to subcontracting before agreeing the use of subcontractors with any employer. This should include your reason for subcontracting, all services you will provide when doing so and how you determine the associated costs.
You can use delivery subcontractors to complement your own delivery if requested by an employer and agreed at the start of an apprenticeship. Within an employer’s apprenticeship programme (conditional on paragraph P167) delivery subcontractors can deliver full or part-apprenticeship training.
You must only use delivery subcontractors that satisfy one of the following two criteria:
P172.1 they are on the published Register of Apprenticeship Training Providers and have applied by the main or supporting application routes; or
P172.2 they are either the apprentice’s employer, a connected company or charity as defined by HMRC and are on the published Register of Apprenticeship Training Providers, having applied through the employer-provider application route.
You must not agree to the use of delivery subcontractors with an employer if you do not have knowledge, skills and experience of contracting with, and managing, delivery subcontractors.
You must carry out your own due diligence checks on potential delivery subcontractors including taking account of any relevant Ofsted reports. The process and results must be available for inspection by us and employers. You must not use a potential delivery subcontractor’s presence on the Register of Apprenticeship Training Providers, or any other public register or database, as an indicator that they are suitable to deliver to your, or the employer’s, specific requirements.
You must not agree with an employer the use of a delivery subcontractor that you assess as being unsuitable, or whose quality of delivery is demonstrably inadequate, even where the employer decides not to work with you as a consequence.
You must have robust procedures in place to ensure you do not inadvertently fund extremist organisations through the subcontracting of apprenticeship training and/or on-programme assessment.
You must not agree the use of any delivery subcontractor where this would require you to subcontract apprenticeship training and/or on-programme assessment to a second level. All of your delivery subcontractors must be contracted directly by you and you may have more than one subcontractor. The restriction on the level of subcontracting is in place to ensure:
P177.1 that main providers retain clear and transparent accountability for the quality of training provision;
P177.2 that proper and appropriate controls are in place to manage the apprentice experience; and
P177.3 that value for money is achieved by mitigating funding being utilised for multiple tiers of subcontractor management.
You must maintain the relationship with each employer at all times. You must not allow a delivery subcontractor to lead that relationship.
Your written agreement with each employer
You must clearly describe to each employer and potential subcontractor, before each subcontracting relationship is agreed the reason for subcontracting and all services you will provide and the associated costs when doing so. This must include a list of specific costs for managing the subcontractor; specific costs for quality monitoring activities and specific costs for any other support activities offered by you to the subcontractor. All of these costs must be individually itemised and describe how each cost contributes to delivering high quality training. You must also explain how such costs are reasonable and proportionate to delivery of the subcontracted apprenticeship training.
If you and an employer agree the use of delivery subcontractors, you must have an up-to-date written agreement in place with each employer that sets out the following for the delivery of their apprenticeship programme:
P180.1 The apprenticeship training and/or on-programme assessment that you will directly deliver.
P180.2 The amount of funding you will retain for your direct delivery.
P180.3 The apprenticeship training and/or on-programme assessment that each delivery subcontractor will contribute to the employer’s apprenticeship programme.
P180.4 The amount of funding you will pay each delivery subcontractor for their contribution.
P180.5 The specific amount of funding you will retain to manage and monitor each delivery subcontractor.
P180.6 The specific amount of funding you will retain for each other support activity you will provide to each delivery subcontractor.
P180.7 The specific amount of funding you will retain for the monitoring you will undertake to ensure the quality of the apprentice training and/or on-programme assessment you have contracted each delivery subcontractor to carry out.
P180.8 A detailed description of how the funding retained for each activity detailed in P180.5 to P180.7 contributes to delivering high quality training and how the funding retained is reasonable and proportionate to delivery of the apprenticeship training described in P180.3.
P180.9 Any actual or perceived conflict of interest between you and any delivery subcontractors. For example, where you and a delivery subcontractor are part of the same group, share common directors or senior personnel, or where you will benefit financially from using a particular delivery subcontractor.
Delivery of apprenticeship training and on-programme assessment by delivery subcontractors
You are responsible for all of the actions of your delivery subcontractors that are connected to, or arise out of, all the apprenticeship training and on-programme assessment that you have subcontracted to them.
You carry overall responsibility for the quality of apprenticeship training and on-programme assessment undertaken by your delivery subcontractors.
You must manage and monitor all of your delivery subcontractors to ensure that high-quality delivery is taking place that meets our funding rules.
You must carry out a regular and substantial programme of quality-assurance checks on the apprenticeship training and on-programme assessment provided by delivery subcontractors, including visits at short notice and face-to-face interviews with staff and apprentices. The programme must:
P184.1 include whether the apprentices exist and are eligible; and
P184.2 involve direct observation of initial guidance, assessment and delivery of training and/or on-programme assessment.
Your findings must be consistent with these funding rules, your expectations and the subcontractor’s records. You must report any instances to us where this is not the case.
If any of your delivery subcontractors undergoes a change of circumstances that affects its ability to continue to deliver under a subcontract with you, you must make alternative delivery arrangements for each apprentice affected by this, in agreement with their employer. Change of circumstances include going into liquidation or administration, key delivery staff leaving the organisation, or removal from the Register of Apprenticeship Training Providers. The change of delivery arrangements must be recorded in your written agreement with the employer.
Contracting with delivery subcontractors
You must have a legally binding contract with each delivery subcontractor.
You must obtain an annual report from an external auditor if the total apprenticeship contracts with your delivery subcontractors will exceed £100,000 in any one financial year. The report must provide assurance on the arrangements to manage and control your delivery subcontractors. The report must comply with any guidance issued by us. You must supply us with a certificate signed by the external auditor and an authorised signatory to confirm you have received a report that provides satisfactory assurance. We may ask you to provide a copy of the full report.
Your contract with each delivery subcontractor must specify the following:
P189.1 They must keep to our funding rules.
P189.2 They must provide you with ILR data so that your data returns to us accurately reflect delivery information.
P189.3 They must give us, and any other person nominated by us, access to their premises and to all documents related to their delivery of apprenticeships.
P189.4 They must give you sufficient evidence to allow you to:
P189.4.1 assess their performance against Ofsted’s common inspection framework or the requirements of the QAA quality code;
P189.4.2 incorporate the evidence they provide into your self–assessment report; and
P189.4.3 guide the judgements and grades within your self-assessment report.
P189.5 They must always have suitably qualified staff available to provide apprenticeship training and/or on-programme assessment.
P189.6 They must co-operate with you to ensure that there is continuity of learning for apprentices if the subcontract ends for any reason.
P189.7 They must tell you if evidence of irregular financial or delivery issues arises. This could include, but is not limited to, non-delivery of training when funds have been paid, sanctions imposed by an awarding organisation, allegations of fraud, an inadequate Ofsted grade, not meeting relevant QAA quality code indicators, allegations or complaints by apprentices, employers, staff members, or other relevant parties.
P189.8 They must not use our funding to make bids for, or claims from, any European funding on their own behalf or on our behalf.
P189.9 They must not use payments made by us as match funding for ESF projects.
Your contract must make a clear reference to the up-to-date written agreement you have in place with each employer and include a breakdown of all the agreed services and costs.
Special conditions for subcontracting to employer-providers
Organisations who have successfully applied through the employer-provider route of the Register of Apprenticeship Training Providers are only eligible to deliver apprenticeship training and/or on-programme assessment to apprentices employed either by them or a connected company or charity as defined by HMRC. You must ensure any employer-providers who are delivery subcontractors to you meet this requirement.
Employer-providers must evidence the actual costs of delivery of apprenticeship training and on-programme assessment (see Apprenticeship Funding: Rules for Employer-Providers).
Special conditions for subcontracting to supporting providers
Delivery subcontractors who have successfully applied to the supporting application route of the Register of Apprenticeship Training Providers must not receive more than £500,000, or £100,000 if the delivery subcontractor is identified as new, of apprenticeship funding for their delivery from 1 April to 31 March each year.
You must ensure that you are not one of a number of organisations making payments to any supporting provider that exceed £500,000, or £100,000 if the delivery subcontractor is identified as new, in any one year. We will place restrictions on your future use of delivery subcontractors if this happens.
We will exclude any supporting provider that has applied to the Register of Apprenticeship Training Providers through the supporting application route where they allow their funding to exceed their respective total in any one year.
Special conditions for all instances where the employer is the delivery subcontractor
Where the employer is the delivery subcontractor you must only pay them for actual costs of delivery. Employers must not profit from apprenticeship delivery to their own employees.
Reporting your use of delivery subcontractors to us
You must provide a fully completed delivery subcontractor declaration by the dates we will give you. This will be at least twice between 1 April to 31 March each year. If you do not make the declaration on time, we will suspend your payments. If you do not subcontract, you must still provide a nil return to confirm this.
You must also update your subcontractor declaration if your subcontracting arrangements change during the year.
Disputes and issue resolution between the employer and main provider
You are responsible for resolving issues and disputes between the employer and your delivery subcontractors. Main providers and assessment organisations must provide employers and apprentices with their written complaints and dispute resolution procedure, policy and process. The first contact point for this must be included in the written agreement and in the commitment statement.
Agreements entered into between you and the employer must be legally binding. Dispute resolution should be in accordance with the terms of the written agreement, which ultimately would be enforceable through the courts.
Apprentices and their employers must be made aware by the main provider that they can contact the apprenticeship helpline regarding apprenticeship concerns, complaints and enquiries. The contact number and website must also be included in the employer’s written agreement and in the apprentice’s commitment statement.