Contracting and subcontracting
The agreement between employers and their main provider. Requirements for subcontractors and resolving disputes.
New for 1 August 2022:
- Glossary: Please note the definitions for subcontracting and subcontractor in the glossary have been updated.
E146
Funding for all elements of each apprenticeship will be routed through a single main provider that you have chosen. This includes funding for English and maths.
E147
Your main provider must directly deliver some of the apprenticeship training and / or on-programme assessment associated with your apprenticeship programme. By apprenticeship programme, we mean all of the apprentices that they have been contracted to deliver training to, irrespective of occupational area, standard or level.
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E147.1 The volume of training and / or on programme assessment that your provider directly delivers must have some substance and must not be a token amount to satisfy this rule.
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E147.2 It must not be limited to a brief input at the start of each employer’s programme or involve delivery to just a few of a large number of apprentices. It does not include simply delivering English or maths, or aspects of the apprenticeship which all apprentices must have, such as safeguarding or British values.
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E147.3 You can find further information in the document Using Subcontractors in the Delivery of Apprenticeships.
E148
Your main provider must publish on their website their rationale for subcontracting, which must enhance the quality of the learner offer. They must be clear about the educational rationale for their subcontracting position. They must not sub-contract to meet short-term funding objectives.
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E148.1 We expect the rationale to meet one of more of the following aims:
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E148.1.1 Enhance the opportunities available for learners
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E148.1.2 Fill gaps in niche or expert provision, or provide better access to training facilities
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E148.1.3 Support better geographical access for learners
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E148.1.4 To offer an entry point for disadvantaged groups
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E148.1.5 Give consideration of the impact on individuals with shared protected characteristics
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E148.2 Your main provider must also publish, before agreeing the use of subcontractors with you, the services they will provide when subcontracting and how they determine the associated costs.
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E148.3 They must set their full range of fees retained and charges that apply including:
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148.3.1 Funding retained for quality assurance and oversight.
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148.3.2 Funding retained for administrative functions such as data returns.
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148.4 Your main provider must also set out how they will determine that each cost claimed by a sub-contractor is reasonable and proportionate to the delivery of their teaching or learning and how each cost contributes to delivering high quality learning.
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148.5 Your main provider must also publish all services they will provide when subcontracting and the associated costs when doing so, including a list of specific costs for managing the subcontractor, specific costs for quality monitoring activities and specific costs for any other support activities offered by them to the subcontractor.
E149
Your main provider can use delivery subcontractors to complement their own delivery if requested by you and agreed at the start of an apprenticeship. Within your apprenticeship programme (conditional on paragraph E146) delivery subcontractors can deliver full or part-apprenticeship training.
E150
Where you ask them to use delivery subcontractors they must satisfy one of the following three criteria:
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E150.1 They are on the published Register of Apprenticeship Training Providers and have applied by the main or supporting provider application routes;
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E150.2 They are you or one of your connected companies or charities as defined by HMRC and are on the published Register of Apprenticeship Training Providers, having applied through the employer-provider application route; or
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E150.3 They have applied to the Register of Apprenticeship Training Providers subcontracting exception process and been approved to be exempted from the requirement to be on the Register of Apprenticeship Training Providers and can produce written approval from DfE confirming that the exception applies to them, including its duration. This temporary exception is effective from 25 May 2022 until 31 July 2023.
E151
We will notify you if the training provider is removed from the Register of Apprenticeship Training Providers. If we terminate the training provider’s agreement with the ESFA due to removal from the Register of Apprenticeship Training Providers, we will usually stop payments to the main provider three months from the date of this notification. You must give the main provider notice to terminate your contract with them.
E152
Where you are the delivery subcontractor, you must only report actual costs of delivery.
E153
Your main provider must maintain the relationship with you at all times. Your main provider must not allow a delivery subcontractor to lead that relationship.
E154
Your main provider must clearly describe to you and your potential subcontractor, before each subcontracting relationship is agreed, the reason for subcontracting and all services they will provide and the associated costs when doing so. This must include a; list of specific costs for managing the subcontractor, specific costs for quality monitoring activities and specific costs for any other support activities offered by them to the subcontractor. All of these costs must be individually itemised and describe how each cost contributes to delivering high quality training. The main provider must also explain how such costs are reasonable and proportionate to delivery of the subcontracted apprenticeship training.
E155
If you and your main provider agree the use of delivery subcontractors, you must have an up-to-date written agreement in place with them that sets out the following for the delivery of their apprenticeship programme:
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E155.1 The apprenticeship training and / or on-programme assessment that they will directly deliver.
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E155.2 The amount of funding they will retain for their direct delivery.
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E155.3 The apprenticeship training and / or on-programme assessment that each delivery subcontractor will contribute to your apprenticeship programme.
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E155.4 The amount of funding the main provider will pay each delivery subcontractor for their contribution.
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E155.5 The specific amount of funding the main provider will retain to manage and monitor each delivery subcontractor.
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E155.6 The specific amount of funding the main provider retains for each other support activity you will provide to each delivery subcontractor.
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E155.7 The specific amount of funding the main provider will retain for the monitoring they will undertake to ensure the quality of the apprentice training and / or on programme assessment they have contracted each delivery subcontractor to carry out.
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E155.8 A detailed description of how the funding retained for each activity detailed in E154.5 to E154.7 contributes to delivering high quality training and how the funding retained is reasonable and proportionate to delivery of the apprenticeship training described in E154.3.
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E155.9 Any actual or perceived conflict of interest between them and any delivery subcontractors. For example, where they and a delivery subcontractor are part of the same group, share common directors or senior personnel, or where they will benefit financially from using a particular delivery subcontractor.
E156
Your main provider is responsible for the actions of their subcontractors connected to, or arising out of, the delivery of the services, which they subcontract. If your main provider’s subcontractor fails to deliver, the main provider will be responsible for making alternative arrangements for the delivery of education and training.
- 156.1 Your main provider carries overall responsibility for the quality of apprenticeship training and on programme assessment undertaken by their delivery subcontractors.
E157
If any of your main provider’s delivery subcontractors undergo a change of circumstances that affects their ability to continue to deliver under a subcontract with your main provider then your main provider must make alternative delivery arrangements for each apprentice affected by this, in agreement with you. Change of circumstances include going into liquidation or administration, key delivery staff leaving the organisation, or removal from the Register of Apprenticeship Training Providers. The change of delivery arrangements must be recorded in your main provider’s written agreement with you.
E158
Where the employer is the delivery subcontractor the main provider must only pay you for actual costs of delivery. Employers must not profit from apprenticeship delivery to their own employees
E159
The main provider is responsible for resolving issues and disputes between you and their delivery subcontractors. Main providers and assessment organisations must provide you and your apprentices with their written complaints and dispute resolution procedure, policy and process. The first contact point for this must be included in the written agreement and in the training plan.
E160
Agreements entered into between you and the main provider are legal agreements and dispute resolution should be in accordance with the terms of the written agreement and ultimately would be enforceable through the courts.
E161
You and your apprentices must be made aware by the main provider that you can contact the apprenticeship helpline regarding apprenticeship concerns, complaints and enquiries. The contact number and website must also be included in the written agreement and in the apprentice’s training plan.
- E161.1 If you are unable to resolve your complaint with the main provider you may make a complaint in accordance with the ESFA’s procedure for dealing with complaints about training providers.