The Skills Funding Agency (SFA) has written to a third of prime providers, after it was unable to find evidence they had complied with its subcontracting rules.
The SFA today confirmed that it has notified around 300 non-compliant colleges and training organisations that their subcontracting arrangement for 2016 to 2017 will be restricted.
These restrictions will include termination of existing subcontracts before August 1, 2016, when existing learners have completed their programmes, and a ban on new subcontracting arrangements for delivery in 2016 to 2017.
The affected providers can avoid these consequences, however, if they supply the information requested in their letter to their Central Delivery Service Adviser by 5pm on Friday June 3, which will result in the subcontracting restriction being lifted.
An SFA spokesperson confirmed that if this condition is not met, the subcontracting restriction will be maintained for 2016 to 2017 and a list of affected providers will be published on the gov.uk website.
This list will be valid for all of the 2016 to 2017 funding year, to allow prospective subcontractors to identify the lead providers who were unable to issue 2016 to 2017 subcontracts for delivery funded by the SFA.
It comes after the SFA told FE Week on May 4 that it would be cracking down on non-compliance, after it found evidence of providers failing to publish full details of their subcontracting figures — including fees and charges.
The SFA had warned in September 2015 that it would suspend public money for lead providers who failed to publish what they charged each of their subcontractors in 2013/14 and 2014/15.
A spokesperson said in May: “As a result of our non-compliance subcontracting work, we will be writing to our lead providers who are non-compliant in: publishing their fees and charges for 2014 to 2015 and/or 2015 to 2016; and those that are non-compliant in producing a valid audit certificate on their subcontractors, to advise them of the next steps.”