CITB fixes ‘reverse subcontracting’ deal following college uproar

The Construction Industry Training Board has struck a new deal to work with colleges after concerns were raised that its “reverse subcontracting” proposal would have broken funding rules.

The updated contract for non-levy apprenticeships could still see colleges paying the CITB around £1,600 per learner – but this is about half of what was originally proposed.

In August the construction board tried to get colleges to enter “reverse subcontracting” arrangements where it would charge top-slices of at least 28 per cent, even though it would be the college that was the prime.

We are pleased that we have now reached a positive agreement

This came after the CITB failed to win a non-levy apprenticeships contract and was scratching around for ways to continue making money through the programmes.

But the Association of Colleges stepped in and said the deal would actually break government rules because the “services” being offered, such as recruitment and functional skills checks on maths and English, “weren’t eligible for funding”.

The new deal is now compliant with the rules and “certainly is not a reverse subcontract”, according to Teresa Frith, senior skills policy manager at the AoC.

“Rather than doing the service on a percentage of a contract, they are going to identify what they feel that service will cost to deliver and suggest that as a basis,” she told FE Week.

On offer is a “split process”. Part one is a fee for sign-up services, where the CITB will source the college an “oven-ready learner and employer”, with paperwork filled out to the point where the college can take control.

FE Week understands the cost of this will be £700.

The second service on offer is a fee for site visits.

“This is where they [CITB] undertakes the liaison with the employer and follows the apprentice around from site to site, then feeds back to the college to let them know how the on-the-job training is matching the 20 per cent off the job, and so on,” Ms Frith said.

FE Week has been informed that for a two-year apprenticeship programme the CITB is stating a minimum of six visits – four site and two college – should be carried out at £150 each.

Over the two years, if six site visits are carried out the college would pay £900.

It is, however, down to each different college to negotiate how many site visits a learner will have during their programme.

CITB will support colleges to ensure that learners can achieve their skills objectives during their apprenticeship programme

Colleges that opt to use both services can expect to pay around £1,600 per learner.

“The AoC and CITB have been working together on arrangements for non-apprenticeship levy-paying employers,” said Gillian Cain, head of apprenticeships at CITB.

“We are pleased that we have now reached a positive agreement, which we believe represents good value for all parties and complies with funding rules.

“CITB will support colleges to ensure that learners can achieve their skills objectives during their apprenticeship programme. Colleges can choose to receive this support from CITB and would pay a fee for these services, but are under no obligation to do so.”

Before the levy, the CITB would use its apprenticeships contract as a prime and subcontract the training out to colleges. Following its failure in the government’s non-levy procurement, the CITB wanted colleges to agree to a “reversal of our contracts”.

In this scheme, colleges would have been the prime but would have paid a huge management fee, believed to range from 28 to 36 per cent, like a subcontractor, for which the CITB would have given access to construction employers and provided other services such as inductions and health and safety training.

It would have meant that for apprentices on the carpentry and joinery level-two standard, for example, the training provider would receive £12,000 government funding but have to give £3,360 or more of it to the CITB.