What is preventing smaller training providers from growing into larger, self-sufficient prime contractors?

It is a question that I have asked myself on many occasions. However, following our successful non-levy ITT campaign (100% of clients supported, received a contract award) I again find myself questioning what prevents smaller providers, often reliant on sub-contracting arrangements, from;

1. applying to become a prime contractor
2. being successful in bids and tenders
3. successfully delivering contracts

I am often embroiled in debates about the possible reasons why?

Considering a large percentage of smaller providers have been in operation for many years, had exposure to a variety of funding streams, have proved their ability and resilience to respond and adapt, I find many of these explanations difficult to accept.

So, I’ve decided to share my thoughts and conclusions with you to gain a greater insight from the network and especially from the very same smaller providers I am referring to.

Firstly, I think it is important to acknowledge those providers whom for whatever reason do not wish to grow and have no ambition of becoming a prime contractor.

For those providers who do wish to grow and achieve directly funded contracts I believe it comes down to a lack of expertise, guidance and support.

It has frustrated me for many years that prime contractors do not do enough to support other organisations that they choose to sub-contract with. The term sub-contractor has never sat well with me. I prefer the term partner. After all, it is essentially a partnership and should be treated as such.

Again, it is important to recognise there are some very good, supportive, prime contractors in operation as highlighted in a recent FE News article focusing on the good work of WBTC. However, these are few and far between and even then, do not always support the partner to realise their full potential.

This is where my rationale comes in. We all strive to improve individuals lives through the delivery of skills training and qualifications; we all work in partnership with employers to understand their needs, wants and ambitions. Why should it be any different for partner organisations? Surely it will benefit all if these smaller providers were able to reach their full potential? “Utopia” I hear you cry.

Well surely collaborative working and partnerships reap the best rewards in the longer term? Hence why our funding bodies should be encouraging, even insisting on primes demonstrating their ability to develop and future proof delivery in this way. Call it an equivalent to an apprenticeship programme for wannabe prime providers. Now there’s a novel idea.

I believe those prime contractors that choose to contract with partner organisations to deliver on their behalf should provide a greater level of support than they have been required to. The prime recognises the value their partners bring, whether that be greater expertise in a subject area, are better positioned geographically or have greater links to specific target groups.

However, in doing so the prime also recognises the risk to their delivery if that partner were to develop aspirations to grow. Therefore, primes are reluctant to do more than the bare minimum when it comes to supporting partner organisations.

Primes also charge a management fee. Although the type of support provided for this management fee differs very little from prime to prime the levels of fees imposed do differ greatly.

Typically, prime contractors will administer, audit and quality assure the provision delivered on their behalf as is stipulated in the guidance issued by the funding bodies. There is inevitably a cost associated with this and primes have risk bandings in place reflected in their management fee structures.

My interpretation of any management fees is you are paying for a service.

Partners should have a greater say in what that service should look like and how it should be delivered to them.

After all, how many partners know how to process and upload a funding claim from start to finish? How many partners have exposure to all aspects of an Ofsted inspection or funding audit? How many can write successful bids and tenders or confidently performance manage a contract? How many are being prepared and supported to become the next prime contractor?

Paul Conroy is the founder and director of Skills Office

About Skills Office: A new service aimed at developing training providers and employers to grow their ability to deliver high quality, cost effective Skills and Apprenticeship programmes by offering support in key areas such as Audit, Claims, Compliance, Design, Growth, Inspection, Performance, Quality and Training. With access to Skills Office Hub providers will also have exclusive use to the built-in MIS, e-portfolio, e-learning portal and CRM system. Skills Office offers a complete end to end solution simplifying the process of delivering ESFA funded contracts and minimising risk.