Ofsted to ‘expose’ rip-off subcontracting top-slices

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Ofsted will expose training providers who rip-off apprentices by collecting subcontracting management fees without taking “responsibility for quality”, the chief inspector has revealed.

Amanda Spielman made the promise in a fierce speech at FE Week’s Annual Apprenticeship Conference, warning prime providers that the inspectorate would not stand idly by while poor provision goes unmonitored.

“Our message here is simple: as the direct contract holder, you are responsible for your learners,” she told delegates.

“If you subcontract, for whatever reason, you are still responsible for making sure your apprentice gets high-quality training.

As the direct contract holder, you are responsible for your learners

“If you are sitting back and collecting the money without taking proper responsibility for quality, you are failing your apprentices. We are determined to expose this in the system.”

Ofsted is preparing to publish its first monitoring visits looking specifically at subcontracted provision of directly funded providers.

“We expect the first of these to be published in the next couple of weeks,” Ms Spielman said.

Subcontracting has been a hot topic for all in the sector over the past few years.

Lead providers often claim that steep fees are needed to cover administrative costs, but many, including the education committee chair Robert Halfon, believe that too much money is being siphoned out of frontline learning.

Some management fees have reached up to 40 per cent, as was infamously the case with Learndirect, the largest provider in the country.

Mr Halfon claimed that subcontracting had become a “money-maker” during an education select committee earlier this month.

Ms Spielman also discussed Ofsted’s approach to monitoring “untested” new providers which have entered the apprenticeships market.

“I know that many of you have concerns about the number of untested providers entering the market and the effect this could have on quality,” she said.

“Well, rest assured we are not standing idly by and waiting for new providers to fail.

“It is essential that poor-quality provision is spotted and tackled quickly, so that it doesn’t damage an individual’s prospects or the overall apprenticeship brand.”

Rest assured we are not standing idly by and waiting for new providers to fail

She mentioned the early monitoring visits that have been used to assess the quality of these new providers, the first of which was published last week – and made for embarrassing reading for bosses at Key6 Group.

Inspectors described the Merseyside-provider as “not fit for purpose”, where apprentices complained they are “not learning anything new”.

The report was so dire that the skills minister Anne Milton intervened personally to prevent the provider from taking on any new apprentices.

However, Ms Spielman insisted that a single report should not be taken as a sign that every new provider is similarly inept.

“It is important that we don’t over-interpret this one result as a judgment on all new providers coming on stream with the levy,” she told the conference.

“We are doing more monitoring visits of this type. And I very much hope that positive results will significantly outnumber the disappointments.”



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5 Comments

  1. Forget the pebble in a pond ripple analogy, this will be like a rock in a puddle as lead providers clamber to implement unrealistic quality improvement targets on their sub-contractors in preparation for, well something!
    Unless, there’s a good relationship between the lead & sub contractors who work in partnership to deliver the training needed.
    There’s clearly a need to target unscrupulous lead contractors and poor sub-contractors to ensure that both is wiped out, but we need to avoid these ripples of indignation adversely affecting good provision in the sector during this cull.

  2. Angela Sayers

    Great to read that something is being done about these rip off providers, maybe exposure will ensure it stops. It saddens me that this has continued despite the barriers put in place to stop it.

  3. Dave Spart

    Robert Halfon is absolutely right to point out the scandal of prime contractor profiteering from topslices. I blame the last Skills Minister, whoever that was.

  4. David Armory

    The whole system needs a professional review from both an Ofsted and supply chain perspectives. Primes differ so greatly in terms of quality and responsibility. Talking recently to a subcontract provider delivering Traineeships for a London based Prime since August 2017 who is still to received any payment. Quality doesn’t appear to have been affected at all, but such practice does not reflect what the ESFA wants in its supply chain.