Guidance

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 rules around subcontracting. These changes have ensured that providers’ fees and charges are transparent.

In the coming months, we will undertake further work to develop our expectations about the services that providers should offer to their subcontractors with the sector.

Our key priorities will be to develop an approach which:

  • increases the amount of funding that reaches front line delivery
  • increases transparency by ensuring that providers explain in detail the make-up of their fees and charges

We plan to publish our final expectations by the end of the year and any changes will come into force in 2019.

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 the 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 6 August 2018 + show all updates
  1. Added information explaining our intention to work with the sector to develop and publish expectations around subcontracting fees and charges in the coming months.
  2. First published.