Even a mastermind would fail to keep up with complex, changing and contradictory subcontracting rules

4 Oct 2019, 9:30

My specialist subject on Mastermind would be the ESFA funding rules for subcontracting.

I can quote documents and paragraphs for every year going back a decade because my business has in part grown by personally delivering commercial training to help colleges and training providers stay on the right side of the increasingly complex and confusing rules.

In 2011 I even wrote a guide to subcontracting policy, commissioned, funded and published by a government quango.

In addition, FE Week has typically been first to report rule changes and expose when they have been broken.

So I feel well placed to comment on the ESFA’s latest letter, a decade too late, threatening yet more subcontracting rules following the £20 million scandal at Brooklands College.

But first the ESFA need to get their own house in order.

The ESFA letter to providers ends with current ‘Subcontracting Requirements and Intervention and Oversight Policies’.

Eight documents with a total of 426 pages, plus a lengthy webpage, all liable to be updated at any time during the contractual year.

But, even these documents don’t include summary of changes or other ESFA documents doing the rounds, all of which can contradict the rules.

Mastermind question one: Should apprenticeship providers reduce the price when subcontracting to an employer?

In March 2018, ten months into the contractual year, the ESFA published version 6 of the 2017/18 funding rules.

Alongside the rules was an 8 page summary of changes document, which included conflicting “clarifications”.

One clarification said the overall price should not be reduced: “Where an employer is legitimately delivering training or providing an eligible cost the overall price should not be reduced.”

Another clarification said the price should be reduced to exclude profit: “where the employer is the delivery sub-contractor actual costs must be used. An employer should not make a profit on the delivery to their own employees.”…“we will only pay actual costs and this must be recorded”.

When I asked the ESFA for an explanation at the time they emailed me to say: “we mean that the overall price should not be discounted to completely remove the employer element”.

Mastermind question two: When should apprenticeship providers apply the subcontracting rules to an employer if the employer delivers some of the relevant training themselves?

When seeking clarity from the ESFA in March 2017, they said the following: “All providers should be clear that any delivery of training is classed as sub-contracting, regardless of who is delivering it, the volume or the financial amount.”

So far so clear, and I think nearly all providers would today say the answer to the question is “always”.

But they would be wrong.

It seems this rule was quietly changed last month, with no update to the funding rules, in an obscure document, updated for the third time, associated with the off-the-job training policy.

Buried away on page 31 of version three of the ESFA’s “Apprenticeship off-the-job training: policy background and examples” document, published on the 13 September 2019, is paragraph 109.

It states: “If the employer is delivering relevant training associated with the apprenticeship framework or standard, without which the apprenticeship cannot be achieved, then they are potentially a subcontractor. The acid test is whether apprenticeship funding is being used”… “if the employer is not accessing apprenticeship funding then they are not considered to be a subcontractor.”

So there you have it, a significant change to the subcontracting rules that are not even published in the funding rules.

If we are to expect providers to play this game the answers needs to be consistent and clear.

This may all sound complex, and it is, but it sits at the core of the problem for the ESFA.

They have to get a grip of both their communications and rules – which have spiralled out of all control over the last few years.

If they cannot do it, then the job should go to an agency that can.

Mastermind question three: If the technical machinations of the funding rules are not understood by anyone then what hope is there to enforce them?

Answers on a postcard please…

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  1. I have had some three or four people come through, one said just received notification from Prime after I signed people up that people have to be at JCP and cannot be inactive what told they could be for Women returners.

    Another one told ESFA after getting back funds for AEB as the people had done employ-ability 18 months ago. The Provider says they have asked them lots of questions and the people cannot remember or think they never learned items so he sees it as no prior learning ESFA calling him in and say you need to pay us back money. Another called in being told they will have to give back funds due to them not checking yet learners say they never completed course, but obviously claimed by a provider.

  2. John Broadhurst

    I’m glad that the subcontracting issue is being dealt with. For too long primes have used smaller organisations as leverage in their tenders to show ‘community provision’ and when they are successful in their tenders these small providers are then thrown out by these primes. In West Midlands this is a classic example where WMCA stated that there will be 47 subcontractors across the region yet there is not even half of this figure. Where have they gone and why are they not being used? It will be typical of the WMCA to do nothing about this and leave out provision in the areas where it is so desperately needed.