Subcontracting: Time for the sector to step forward and take a lead
In the previous article I wrote for FE News on End point assessment: Why the IfA needs to get a grip I signed off with the comment “A new year, but a heap more challenges to look forward to….” and unsurprisingly those challenges keep coming thick and fast. Since the start of January the plethora of emails and calls we’ve had through from our members have mainly related to one topic: subcontracting.
Last week AELP, Collab Group and HOLEX jointly published new best practice guidance for a relationship between a prime provider and subcontractor.
It has been six long years since back in 2012 the sector stakeholders collectively produced best practice guidance relating to subcontracting. That guidance although detailed was not very prescriptive on fees and charges.
So after six years, why all of a sudden was now the time to act?
Two reasons why:
Firstly, the unjust outcome of the non-levy procurement saw a significant number of good and high quality providers miss out on a direct contract through the pro-rata process and therefore fall below the minimum contracting threshold.
If we are going to achieve the government’s 3m apprenticeship start target by 2020, then it’s critical we don’t lose established and quality capacity in the system.
As the hope of reversing the challenge of pushing for a rethink on the ITT, subcontracting becomes the only alternative to follow.
Let’s not forget that many of these affected providers are long established with proven track records over many years, not new and untried organisations, and the system they have been forced to operate in needs to be fair, transparent and flexible.
Secondly, on the 1st March this year the Public Accounts Committee (PAC) published its report on the monitoring, inspection and funding of Learndirect Ltd and a key extract and one of the five recommendations was as follows:
ESFA provides no guidance on the support that providers should offer their subcontractors or the levels of support that might be merited by different levels of management fee.
Recommendation: ESFA should formally publish, in time for the next academic year, its expectations about the services that should be offered to subcontractors, and the associated management fees that are reasonable.
Clearly as a result of the PAC report, we will see the ESFA moving to address these recommendations.
Just to be clear, AELP, Collab Group or HOLEX are not regulatory bodies, but in our view why wait for this to be pushed down on the sector when the sector stakeholders can jointly take a stand to set the expectation and the standard.
Our joint approach is proactive and not reactive to the situation.
Back to my starting point about the plethora of queries and questions on the new ESFA subcontracting rules.
Examining all the questions in more detail really when boiled down leaves two specific areas of uncertainty which need addressing:
- What does the main provider need to deliver “some of the on-programme training and/or assessment” actually mean and what can be included for this?
- If the delivery subcontractor is not allowed to lead the relationship with the employer, how would this then work for a non-levy employer where the delivery subcontractor is the subject specialist?
Unfortunately, the interpretation by some providers on the above ranges across some very significant and in some cases virtually impractical extremes.
We have been highlighting these areas of uncertainty and proposing solutions to the rule makers to address the clear confusion in the marketplace.
AELP has submitted draft guidance for providers to the ESFA and DfE and we are waiting their clearance so that it is clear to everyone what is acceptable.
If we can make sensible headway on this, then coupled with the welcomed early non-levy growth point which closed last week, these ingredients should not only help keep funding flowing into the system to support those who need it, but also ensure we have a workable system as we transition through to April 2019.
Simon Ashworth is chief policy officer of the Association of Employment and Learning Providers
Responses