This is a brief presentation prepared by FE Associates to explain the new sub contracting requirements for academic year 2013/14.

1. Sub-Contracting Update
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2. Sub Contracting –
NEW - SFA Funding Rules 2013/14
• If you have not previously subcontracted, provision, you must get
approval in writing before awarding a contract to a subcontractor
• You must not use the Register of Training Organisations as a substitute
for carrying out your own due diligence when appointing subcontractors
• You must not appoint subcontractors that are not listed on the Register
of Training Organisations if your contract or an existing sub contract is over
£100,000. In this instance they must be on the RTO before you contract
with them.
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3. You may not enter in new or extend existing subcontracting arrangements If
any of the following circumstances apply;
• If Ofsted has rated your leadership and management as inadequate
• If you do not meet the SFA Minimum Standards
• If the outcome of the annual financial health assessment the SFA carry out
is inadequate
You remain responsible for all subcontracted provision
You must have a legally binding contract with each subcontractor
You may not award a subcontract if:
• There is an above average risk warning from a credit agency
• A resolution or court order has been made to wind up or liquidate the
company
• The statutory accounts are overdue
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4. NEW - SFA Funding Rules 2013/14
Distributing income between main contractor and subcontractors
“You must publish your supply-chain fees and charges policy on your website
before entering into any subcontracting agreements for the 2013/14 academic
year.”
As a minimum you must, include the following in your supply-chain fees and
charges policy:
a Your reasoning for subcontracting
b The policy’s contribution to improving your and your subcontractor’s quality
of teaching and learning
c The typical percentage range of fees retained to manage subcontractors,
and how this range is calculated
d The support subcontractors will receive in return for the fee you charge
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5. NEW - SFA Funding Rules 2013/14
Distributing income between main contractor and subcontractors
e If appropriate, the reason for any differences in fees charged for or
support provided to different subcontractors
f Payment terms between you and your subcontractors – timing of
payments in relation to delivering provision and timescale for paying
invoices and claims for funding received
g How and when the policy is communicated to and discussed with current
and potential subcontractors
h Timing for policy review
i Where the policy is published
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6. Sub Contracting
“You must also publish data on the actual level of funding paid and retained for
each of your subcontractors in 2013/14. This data must be published within
30 days of the 2013/14 ILR closing”
You must, as a minimum, include the following in your published supply-chain
fees and charges:
• Name of the subcontractor
• UKPRN number of the subcontractor
• Contract start and end date
• Type of provision (for example, 16-18 Apprenticeships, 19+
Apprenticeships, classroom learning, workplace learning
• Funding the SFA have paid to you for provision delivered by the
subcontractor in that academic year
• Funding you have paid to your subcontractor for provision delivered in that
academic year
• Funding you have retained in relation to each subcontractor for that
academic year
• If appropriate, funding your subcontractor has paid to you for services or
support you have provided in connection with the subcontracted provision
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7. Sub Contracting
“You must publish this information on fees and charges alongside your supply-
chain fees and charges policy to allow all your supply chain fees and charges
information to be viewed in context.”
“Your fees and charges information should only include ‘provision
subcontracting’. Provision subcontracting is when you subcontract the delivery
of full programmes or frameworks. It is not subcontracting 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 outreach support).”
“If you are not sure whether your subcontracting arrangements are defined as
‘provision subcontracting’, discuss this with your relationship manager.”
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8. Sub Contracting
Ensure all fund holders read paragraphs 314 to 346 in the 2013/14
Funding Rules regarding subcontracting.
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