Tactical subcontracting deal abandoned in mayoral combined authority

Funding rules state 'you must not subcontract to meet short-term funding objectives'

Funding rules state 'you must not subcontract to meet short-term funding objectives'

An education charity has pulled a tactical subcontracting deal worth up to £350,000 of adult education funding after a mayoral combined authority intervened.   

According to a tender published on the government’s contracts finder website last week, the WEA was seeking subcontractors to deliver almost a quarter of its £1.5 million adult education budget (AEB) allocation in West Yorkshire for the last four months of the 2021/22 academic year.   

Bids had to be submitted by March 18 for the contract, which would run from April 4 to July 31.   

The short duration and last-minute nature of the tender suggests it was a tactical move to use up unspent funding from the AEB.   

West Yorkshire Combined Authority (WYCA) funding rules are in line with those for the national AEB administered by the Education and Skills Funding and state that providers “must not subcontract to meet short-term funding objectives”.   

The WYCA has a three per cent tolerance threshold in its AEB – meaning providers will need to use up at least 97 per cent of their allocation to avoid funds being clawed back.   

On Monday, the same day FE Week enquired about the tactical nature of the subcontracting opportunity, the combined authority contacted the WEA and informed the grant-funded provider that it is not allowed to continue with the proposed subcontract.   

However, the WEA claims this was only because the charity is technically classified as an “out of area” provider.   

A WEA spokesperson said the combined authority had provisionally signed off on the subcontract during a previous meeting – despite it appearing to be a breach of funding rules.   

“We had proposed subcontracting to WYCA in a recent partnership meeting and the procurement was actioned after this meeting,” the spokesperson said.   

“The WEA does work in partnership with other charities, local employers and community organisations to gain specialist expertise and connections into local jobs and hard-to-reach communities. Normally these are long-standing partnerships to achieve common goals, and this was a model we were hoping to replicate in West Yorkshire.   

“However, WYCA have been in touch to clarify that, as we are classified as an ‘out of area’ provider, despite our long-held footprint in region, their rules do not permit us to subcontract. As such, we are in the process of rescinding the procurement and finding alternative ways to deliver the specialised reach intended.”   

The WYCA refused to comment on why it allegedly signed off on the tactical subcontracting deal initially and later rescinded its approval.   

A spokesperson would only say: “We monitor subcontracting closely with regards to our adult education budget and providers who have to get our permission to make changes.    

“Changes will be considered if there is a strategic rationale which is aligned to the West Yorkshire AEB strategy and our priorities.”   

The ESFA has attempted to stamp out tactical subcontracting for many years. It launched a fresh crackdown on subcontracting overall in 2020 which made clear that “entering into subcontracting arrangements for financial gain” would not be acceptable.   

Mayoral combined authorities that have control of the AEB for their area mostly follow ESFA funding rules including for subcontracting, but they have the power to make their own amendments. 

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  1. Aidan Relf

    And now that the DfE has confirmed the 97% threshold for non-devolved AEB for 2021-22, we can expect a repeat of last year with a major lobby for ‘business cases’ to avoid clawbacks. “Ain’t gonna happen”, the minister told Toby Perkins in a written answer, but of course it did. The money’s currently on deja vu all over again.