Rebecca Rhodes, Senior Associate, UVAC r.rhodes@bolton.ac.uk SUBCONTRACTING and the Subcontract Template & CONTRACTING with EPA Organisations and the EPA Contract Template Rebecca Rhodes, Senior Associate, UVAC r.rhodes@bolton.ac.uk

Agenda Subcontracting Purpose and Mindset Subcontracting Rules Subcontractor Agreement Template Subcontractor Management EPA Contracting Purpose EPA Rules and Principles EPA Contract Template

Delivery Subcontractors and EPA contractors We use the term ‘you’ to refer to the ‘main provider’, that is, any organisation holding a contract with us through which we directly route funds from an employer’s digital account or government-employer co-investment. The main provider will have the overall responsibility for the training and on-programme assessment conducted by themselves, their delivery subcontractors and have a contractual relationship on behalf of the employer for the end-point assessment conducted by apprentice assessment organisations. Where we use the term, ‘you’ we are also referring to any organisation contracted by you to deliver the apprenticeship on your behalf. Subcontractors (p20-p24)

Delivery subcontractors

Sub Contract for Services Institution XYZ Documentation Contract for Services Institution XYZ & Employer ABC Applies only to delivery with non levy paying employers until March 2018 Provider Agreement Institution XYZ & ESFA Sub Contract for Services Institution XYZ & Provider 123

Mindset ESFA take particular concern over subcontracted delivery provision because it potentially adds risk to likelihood of delivery success: Takes additional resource from the main provider to manage and monitor Later identification of delivery issues Underspend or over contracting Main provider takes fees for their role, reducing the amount of funding going direct to the costs of training - possible impact on quality and viability as a result ESFA recognise the value that specialist providers offer to apprenticeship quality and capacity Some have chosen via the ‘Supporting’ route on RoATP to specialise here – capped at £500k quantum Some will not reach capacity to be on the RoATP - 100k quantum ESFA therefore want to know whether you subcontract and if so with who and for how much You must complete a Delivery Subcontractor Declaration as required Even if you don’t subcontract you MUST make a nil return Late return or failure to submit = suspended payments

Mindset You are always fully responsible for the actions of your subcontractor and for the quality of any outcomes You cannot cede accountability for the employer relationship There must always be a single provider chosen by the employer for all apprenticeship provision You will also probably contract for EPA as a minimum - this is not a subcontractor You can only subcontract from your own budget lines You can only subcontract if the employer requests this and it happens at the start of the apprenticeship The main provider must deliver ‘some’ of the apprenticeship delivery in each employers apprentice programme which must have ‘some substance and not be just a brief input at the start or a small proportion of the total apprentice numbers’ You must have an external audit report to ESFA specifications if your delivery subcontracts exceeds 100k in a financial year, to provide assurance about your arrangements to manage and control your deliver subcontractors. You must supply a certificate signed and authorised to the ESFA.

Subcontracting Delivery – your accountabilities If you fail to check, ESFA will place restrictions on your future use of subcontractors All funding is routed through 1 main provider (including English and Maths) RoATP Main owns the employer relationship Can be a subcontractor also Must conduct all or ‘some’ of the training Supporting Must not exceed £500,000 delivery each year* Must not deliver 100% of the apprenticeship Employer-Provider Can only train their own staff (or connected company/charity) Must evidence actual costs of delivery as main or subcontractor Not on RoATP Must not exceed £100,000 delivery each year*

Subcontractor Rules P 127. You must not agree to the use of delivery subcontractors with an employer if you do not have knowledge, skills and experience of contracting with, and managing, delivery subcontractors Take advice about the impact of Public Contract Regulations 2015 - and make this available to ESFA or employers if requested You must tender for subcontractors e.g. open and competitive tendering You must have a legally binding subcontract contract with the subcontractor (see Para 140 for detail / our template ) Your employer agreement must set out how the delivery of the apprenticeship including the subcontracted elements will work (para 133 for detail) You must act in an open and transparent way any links between you and any subcontractors must be set out in the employer agreement You are responsible for dispute resolution Employer and Subcontractor Agreements need to be ultimately enforceable through the courts Apprentice and employers must be told, by you, how to escalate concerns

Subcontracting Considerations - Your Checks Who you subcontract with is evidence of your robust management processes ESFA specify that all of the following must be carried out and results available to them: Seek legal advice about the Public Contracting Regulations on recruitment of contractors You must carry out Due Diligence checks and make process and results available Have ‘robust’ procedures (e.g. in your due diligence) to ensure you don’t fund an extremist organisation Don’t contract if you believe the organisation is not suitable - even if this loses you the contract with the employer You must not agree to subcontract to a second level You must have an external audit report to ESFA specifications if your delivery subcontracts exceeds 100k in a financial year To provide assurance about your arrangements to manage and control your delivery subcontractors. You must supply a signed and authorised certificate to the ESFA. They may wish to see the whole report

Subcontracting Considerations - Your Checks Who you subcontract with is evidence of your robust management processes You MUST ensure that a ‘supporting’ RoATP registered subcontractor does not have contracts that exceed £500 k in total or 100k if not on RoATP) Impact of failure to comply are significant : your subcontracting will be restricted the subcontractor may be excluded permanently CHECK the list of Declared Subcontractors, for those on the supporting RoATP route Check the RoATP published list for status Require subcontractor to declare other contracts to you in signing your agreement

List of Declared Subcontractors Use the published list to check BEFORE you subcontract

Subcontractor Fees and Payments Employer-Providers If you subcontract to an employer to deliver part of the apprenticeship , they must be on the employer-provider route of the RoATP They can only deliver to their employees/connected company employees Can only charge the actual costs of delivery and must provide evidence of this Your Fees You must set out your fees for monitoring and managing the subcontract in the employer agreement and the subcontractor contract You must set out what support you provide for these fees And specify how you will monitor quality And how you will mange the subcontractor