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You are here:   About Us > Policies & Procedures > Subcontracting

Ofsted Report April 2013

 

About Us

 
 

Subcontracting (Fees and Charges) Policy

Purpose

The purpose of this policy is to ensure transparency and accountability in terms of supply chain activity carried out by Dudley College, in line with the mandatory requirement that such a policy is in place prior to any provision subcontracting activity taking place from 1 August 2013. The policy is informed by the AOC/AELP Common Accord, the LSIS Supply Chain Management document and all relevant funding guidance issued by the SFA, EFA, HEFCE or successor organisations.

Scope

This policy applies to all sub-contracted supply chain activity supported by funding from the Skills Funding Agency, Education Funding Agency, HEFCE or any successor organisations.

1. Overarching Principles

The College will use its supply chains to optimise the impact and effectiveness of service delivery to the end user. The College will therefore ensure that:

  1. Supply chain management activities comply with the principles of best practice in the skills sector. In particular they will be guided by the principles given in the LSIS publication  “Supply Chain Management – a good practice guide for the post-16 skills sector” (Nov 2012 and subsequent iterations)

  2. The College will at all times undertake fair and transparent procurement activities, conducting robust due diligence procedures on potential subcontractors to ensure compliance with the Common Accord at all levels and to ensure the highest quality of learning delivery is made available, demonstrating value for money and a positive impact on learner lives.

  3. The funding that is retained by the College will be related to the costs of the services provided. These services, and the levels of funding being retained for them, will be clearly documented and agreed by all parties. The rates of such retained funding will be commercially viable for both sides and will be negotiated and agreed in a fair and transparent manner. They will be proportionate to the actual services being provided.

  4. Where disputes between supply chain partners cannot be resolved through mutually agreed internal resolution procedures, the College will submit to independent outside arbitration or mediation and abide by its findings. Contract documents will require both parties to agree that the achievements of supply chains are attained through adherence to both the letter and spirit of contracts or partnerships. Both parties therefore commit that all discussions, communications, negotiations and actions undertaken to build, maintain and develop supply chains will be conducted in good faith in accordance with the Overarching Principle.

2. Rationale for subcontracting

The College’s Corporation and Vice Principal Finance and Resources must be satisfied that all subcontracting meets the strategic aims and enhances the quality of our learner offer. We will engage with subcontractors to better meet customer needs. Reasons are varied but include:

  • Working with subcontractors to introduce new standards in priority sectors including engineering and manufacturing construction, science and healthcare, sport and leisure, service industries and business, management and professional prior to investment in resources.
  • Providing access to, or engagement with, a new range of customers.
  • To ensure delivery intention is met where there is a recognised risk in direct provision (e.g. through JCP referrals not being realised).
  • To support another provider to develop capacity/quality.
  • To provide niche delivery where the cost of developing direct delivery would be inappropriate.
  • To support employers with a wide geographic requirement

3. Quality Assurance

Subcontracted activity is a fundamental part of the College’s provision. The quality of the provision will be monitored and managed through the existing College QA processes and procedures, as amended in order to fully encompass all sub contracted activity.

This Policy positions sub-contracted provision as a core part of College activity to enable continuous improvements in the quality of teaching and learning for both the College and its subcontractors. This will be achieved through the sharing of effective practice across the supply chain, for example through the Self Assessment Report process and joint lesson observation.

4. Publication of information relating to subcontracting

In compliance with Skills Funding Agency and other agency funding rules that apply, the College will publish its subcontracting fees and charges policy and actual end-of-year sub-contracting fees and charges on its website before the start of each academic year and in the case of actual end of year data, as required by SFA within 30 days of the 2015 to 2016 ILR closing. This will only relate to ‘provision subcontracting’ i.e. subcontracted delivery of full programmes or frameworks. It will not include the delivery of a service as part of the delivery of a programme (for example, buying the delivery of part of an Apprenticeship framework or outreach support). Provision subcontracting lists will be agreed with local SFA Officials prior to publication.

The College will ensure all actual and potential subcontractors have sight of this policy and any other relevant documents, such as the Fees and Charges Risk Factor Table; copies will be passed to existing partners at the start of each academic year, and to new partners at the commencement of discussions between our organisations. The Fees and Charges Risk Factor Table outlines the percentage paid to subcontractors falling into each risk band; the band into which each provider falls is based on a range of factors identified to the subcontractor’s PCRA and includes:

  • Previous track record
  • Success levels, Retention rates, lesson observations
  • Type of customers to be engaged
  • Type of provision to be undertaken
  • Contract duration
  • Learner feedback
  • Employer feedback
  • Quality of documentation
  • IV/EV Reports
  • Inspection report
  • The risk bands that will be used to allocate College charges.
  • Payment terms between the College and subcontractors – timing of payments in relation to delivering provision and timescale for paying invoices and claims for funding received.
  • The support subcontractors will receive in return for the fees charged.

Risk factors are given a score so that each subcontractor is aware of why they are in a particular band, this process will be used to give subcontractors an incentive to improve and thus reduce the risk band that they fall in. For example, higher risk subcontractors will be allocated less funding but receive more monitoring and support.

5. Communication

This policy will be reviewed in each summer term and updated as required. It will be published on the College web site during the July prior to the start of the academic year in which it will be applied. Potential subcontractors will be directed to it as the starting point in any relationship.

6. Subcontractor Payment Terms for 2016/17

Paperwork Submission
Cut Off Date
Payment Month Invoice raised by Provider
Cut Off Date
Payment Date
26/08/2016 Sep-16 09/09/2016 30/09/2016
23/09/2016 Oct-16 10/10/2016 31/10/2016
28/10/2016 Nov-16 10/11/2016 30/11/2016
25/11/2016 Dec-16 09/12/2016 23/12/2016
*16/12/2015
*Due to Christmas Holidays
Jan-17 10/01/2017 31/01/2017
27/01/2017 Feb-17 10/02/2017 28/02/2017
24/02/2017 Mar-17 10/03/2017 31/03/2017
24/03/2017 Apr-17 10/04/2017 28/04/2017
21/04/2017 May-17 10/05/2017 31/05/2017
26/05/2017 Jun-17 09/06/2017 30/06/2017
23/06/2017 Jul-17 10/07/2017 31/07/2017
28/07/2017 Aug-17 10/08/2017 31/08/2017
01/11/2017 *Dec-17
(Period 13 16/17 only)
08/12/2017 22/12/2017
 

Where issues or factors arise internally or externally beyond the College partnership department’s control, we reserve the right to vary the date of payment accordingly.

7. The Fees and Charges Risk Factor Table 2016/17

The College management fee for a low risk partner is 15% of all funding drawn down against the provision to be delivered. This figure represents the total cost that the College incurs in effectively identifying, selecting and managing all sub-contracted provision. This includes the minimum amount of QA activity that the College would attach to the lowest possible risk sub contractor. An outline of services provided by the College that are included in this fee is provided in Appendix 1.

The risk band will be determined using the table below.

Risk Band % To Partner % Retained by College
High 70% 30%
Medium 80% 20%
Low 85% 15%

Further charges to cover additional costs may be added to the base fee to cover the cost to the College of any additional support that the College deems necessary to ensure the quality of teaching and learning and the success rates of any sub contracted provision. Additional cost is determined using a weighted table of risk factors. The table is available to all actual and potential subcontractors. It is designed to ensure that the cost of any additional support provided to a subcontractor is covered through the funding retained. Additional costs will be recalculated and negotiated each year at contract renewal, giving sub contractors the opportunity to reduce their fees through continuous improvement. This approach will allow the College to focus support where and when it is needed.

Additional Support for Subcontractors

The precise additional support given to each sub contractor will be negotiated with that sub contractor, but will be based on a ‘risk band’ approach and may include:

  • Additional site visits
  • Additional lesson observation
  • Additional tutor support
  • More rigorous verification

Additional charges per learner

The College may also retain funding to cover the cost of any funded activity that it might undertake on behalf of the sub contractor such as:

  • Awarding Organisation fees and charges
  • Hiring of facilities/equipment within/from the College
  • Internal Verification

Monitoring

The College will carry out regular and substantial quality assurance checks with each subcontractor to ensure high quality delivery is taking place that meets the funding rules. This will include a number of short notice and face-to-face interviews with staff and learners and involve direct observation of initial guidance, assessment, and delivery of learning programmes.

Frequency Funding Assurance Audit Visits

The risk band determines the number of planned audits for each subcontractor. This is a minimum and not restrictive, should the College determine additional visits are required through the outcome of these audits.

Risk Band Announced Unannounced
High 2 2
Medium 2 1
Low 1 1

APPENDIX 1

Dudley College will be responsible for:-

  1. Partnerships team will be responsible for:-

    1. Carry out all due diligence processes relating to new partners.

    2. Carry out all internal audits relating to document control.

    3. Lead on all internal audits relating to each and every partner organisation.

    4. Draw up and agree all contracts and secondment agreements and amendments.

    5. Agree funding splits that provide value for money.

    6. Provide each partner with up to date SFA requirements.

    7. Obtaining associate paperwork for seconded staff for curriculum inspection.

    8. Agree line communication for every partner.

    9. Agree audit dates with every partner and share with each centre responsible for curriculum audit.

    10. Provide budget costs relating to expenses incurred – travel subsistence etc.

    11. Overall responsibility of ensuring every invoice submitted and checked by centre staff are accurate.

    12. Create a centralised location for all partner files.

    13. Monitoring early leavers.

    14. Monitoring achievements.

    15. Monitoring other issues.

    16. Monitoring overall performance.

    17. Monitoring finance.

    18. Agreeing monthly payments.

    19. Liaison with the SFA.

    20. Ensure all associate paperwork is obtained in a timely manner.

    21. Direct observation of initial guidance.

    22. Accurately completing the subcontractor declaration form in a timely manner.

  2. MIS will be responsible for:-

    1. Making monthly ILR claims for starts, on programme payments and completions.

    2. Claiming all Apprenticeship framework completions.

    3. Claiming NVQ completions that are not registered through the college centre

    4. Providing funding calculations relating to each partner.

    5. Providing termly ILR data to share with other funding partners.

  3. Exams will be responsible for:-

    1. Claiming individual components of the frameworks.

    2. Claiming NVQ completions that are registered through the college centre.

    3. Carrying out spot checks relating to Functional Skills and Technical Certificate tests or exams.

    4. Ensuring that invigilation is carried in accordance with awarding body requirements.

    5. Ensuring that copies of all learner certificates are copied and retained.

  4. Curriculum will be responsible for:-

    1. Learner interviews.

    2. Verification of portfolio evidence.

    3. Observation of learner activities on site.

    4. Validation of schemes of work.

    5. Validation of assessment.

    6. Internal verification – formative and summative.

    7. Evaluating course reviews.

    8. Evaluating learner and employer feedback.

  5. Functional Skills will be responsible for:-

    1. Learner interviews.

    2. Verification of portfolio evidence.

    3. Observation of learner activities on site.

    4. Validation of schemes of work.

    5. Validation of assessment.

    6. Internal verification – formative and summative.

    7. Ensuring that all learners are registered with the awarding body within six weeks of start date.

  6. Standards and performance will be responsible for:-

    1. Carrying out a minimum of one direct observation of teaching and learning per partner per year and provide feedback in a written format.

    2. Providing assistance to partners in completing their SAR that feeds into the College SAR.

    3. Providing feedback on the SAR.

    4. Include partner staff in any relevant training relating to delivery, assessment, verification, teaching, inspection etc.

  7. Personnel will be responsible for: -

    1. Ensuring all enhanced Disclosure and Barring Service (DBS) checks are completed and any outcome causing concern is shared with the appropriate partner.

    2. Ensuring all associate documentation is retained.

    3. Ensuring that all partner staff are included in any relevant safeguarding.

  8. During audit all College staff will:

    1. Evaluate objectively, be impartial and inspect without fear or favour.

    2. Evaluate provision in line with frameworks, national standards or requirements.

    3. Base all evaluations on clear and rigorous evidence.

    4. Have no connection with the provider that could undermine their objectivity.

    5. Report honestly and clearly, ensuring that judgments are fair and reliable.

    6. Carry out work with integrity, treating all those they meet with courtesy, respect and sensitivity.

    7. Try to minimise the stress on those involved in the audit.

    8. Act in the best interests and well-being of service users.

    9. Maintain purposeful and productive dialogue with those being audited, and communicate judgments clearly and frankly.

    10. Respect the confidentiality of information, particularly about individuals and their work

    11. Respond appropriately to reasonable requests.

    12. Take prompt and appropriate action on any safeguarding or health and safety issues in accordance with College policies.

    13. When conducting interviews, internal auditors must explain that, if requested, they will make every effort to protect the origin of the individual’s comments when using them to form judgments.

    14. However, internal auditors should also make clear that in some circumstances, it may not be possible to guarantee the interviewee’s anonymity. For example, other factors may make it easy to identify which individual has shared particular evidence.

    15. Internal auditors also have a duty to pass on disclosures that raise safeguarding issues, and/or circumstances where serious misconduct or potential criminal activity or fraud may be involved.

    16. Therefore, internal auditors should make it clear that it may not be possible to guarantee confidentiality if an interviewee raises an issue that internal audit are obliged to report.

APPENDIX 2

Actual funding paid and retained to subcontractors.

Issue No: 005
Date: 01.08.2016
Review Date: 31.07.2017
EIA Date: 31.07.2017