1. Purpose/Abstract
The Supply Chain Fees Policy is published in line with the ESFA (Education Skills Funding Agency) apprenticeship funding rules [governing sub-contracting] for the academic year 2024/25.
2. Scope
This policy applies to all University of Derby sub-contracted provision for education and training financed using the Education and Skills Funding Agency (ESFA) funds.
Subcontracting in all its forms is managed through the University Apprenticeships Hub. This includes provision funded through the Apprenticeship Levy and the Adult Education Budget. The University recognizes the importance of building effective supply chain relationships to deliver excellent learner outcomes and to develop that relationship within a subcontracting context.
3. Policy Statement
3.1. Rationale for Offering Sub-Contracted Provision
The ESFA policy seeks to reduce overall levels of sub-contracting delivery, specifically, reducing the volume of sub-contracted delivery.
Our rationale for subcontracting the delivery of an element of an apprenticeship programme is determined when the programme is validated. The University of Derby enters sub-contracting arrangements to meet the needs of learners by providing a relevant, comprehensive and innovative curriculum offer. Reasons for offering sub-contracted provision vary but may include:
- To offer increased choice of provision
- To develop niche sectors of provision
- To develop opportunities for specific communities or groups of learners
- To develop networks of expertise
By acting as the “Prime” contract holder, the University is looking for subcontracted
provision that compliments its offer and geographical reach whilst maximizing the
amount of funding that reaches front line delivery of high-quality learning.
3.2. Contracting Process
A robust process is in place to identify, procure, evaluate, and contract with new and existing subcontractors at the beginning of each academic year. A Contract Variation is signed to confirm continuing students through existing subcontractors and includes a summary of changes to the standard sub-contract.
Where applicable, the University undertakes any Subcontracting Tendering process in line with the current Public Contracts Regulations and the University’s procurement regulations.
Should an employer contract / award stipulate the use of a particular sub-contractor then an exemption from tender process will be undertaken.
Any training provider looking to work with the University in a subcontracting capacity must express their interest by responding to any University published tender. As part of this tender applicants are required to produce evidence that meets the University’s due diligence criteria, which includes legal, financial, and quality checks, as well as checks to ensure applicants are not part of extremist organizations. Subcontractors must also declare if they have a Conflict of Interest with the University of Derby.
The Procedure undertaken for each Tender process will be appropriate and proportionate to its requirements in line with current Public Contract Regulations.
Award Letters are issued to successful applicants who are then registered on the University’s preferred list of suppliers for subcontracting delivery.
The tendering process involves a number of University teams from Finance to Curriculum, through to Quality and Contracts. Each team is required to identify concerns or missing information at various phases as appropriate.
In line with ESFA policies all organizations considered for subcontracted provision must register on the UK Register of Learning Providers (holding a valid UKPRN); and be listed on the Register of Training Organizations. The University reserves the right to refuse a contract to any training provider that poses a considered risk to quality, performance, or reputation to the university or is considered to be a high risk.
All subcontractors wishing to deliver apprenticeships through the University of Derby’s funding contract must be approved and registered as a main or supporting provider on the Register of Apprenticeship Training Providers (RoATP).
Before a contract is signed, quality visits and further negotiations are carried out to ensure that potential subcontractors can provide quality IAG, delivery and support to students.
Furthermore, all subcontractors are considered and must be approved by the University’s Further Education Governance Committee, who will review the reports of the Apprenticeship Hub, to determine the quality and risk associated with each Subcontractor. Approval is evidenced in FEGC Minutes.
During the contracting year, as required by the ESFA, the College will complete the Subcontractor Declaration Form and at the end of the year publish data on the actual level of funding paid and retained for each sub-contractor.
3.3. Improving Quality of Teaching and Learning
The University of Derby works in partnership with sub-contractors and ensures on-going support is available to achieve our joint aims, this will include an induction; and as appropriate for each cohort of learners a planning meeting, a monitoring visit and a quality assurance visit is undertaken by and academic member of staff, in partnership with the Apprenticeship Hub. Quality will be built in from the beginning of the contract, and prior to the start of any contract all subcontractors will be required to provide CVs, DBS checks for staff and copies of IV/EV reports and Observations that have been conducted internally.
Throughout the lifetime of the contract, and to help identify areas for improvement, The University will visit the learners during their teaching, learning and assessment to conduct observations. This will involve checking the quality of learning taking place and to observe the quality of teaching by the Tutor or Academic. The University also conducts spot checks, as appropriate, at least one per year with all subcontractors.
If any disputes arise, in the first instance the dispute will be escalated internally via the relevant college or Head of Apprenticeships. If this should not be successful then the Parties may attempt to settle it by mediation in accordance with the model mediation procedures published by the Centre for Effective Dispute Resolution, CEDR Solve. To initiate mediation, a Party must give notice in writing (“the Mediation Notice”) to the other Party to the dispute.
3.4. Retained Funding and Support for Contractors
the University of Derby has ensured that they have the knowledge, skills, and experience within the organization to successfully procure, contract with and manage its subcontractors. Subcontractor activity will be discharged across the university, through the following expert teams:
- Central Finance including the Business Accountant
- Senior Leadership Teams
- The University Apprenticeships Hub
- Central Procurement Team
- University Legal Team
- Registry
The amount of funding retained where necessary by the University of Derby is calculated as a percentage of the total contract value. The typical rate retained is 0% (but can range from 0% to 20%, percentages may vary where there is an additional cost to the University for providing additional review and quality intervention and any other identified support). The retention is calculated in proportion to the anticipated risk and intervention assessment conducted at the end of the tendering process. It considers due diligence, credit scores and quality of service/delivery.
For Apprenticeship provision, the funding retained by the University is calculated in line with the balance of delivery of each Apprenticeship. The retained funding is calculated under contracting arrangements at the end of the tendering process. The University considers due diligence and the results of the quality visits before issuing contracts.
The University of Derby will:
- Conduct regular Performance Monitoring meetings as defined by the contract to discuss progress against contracted targets and KPIs
- For Apprenticeships, deliver an agreed proportion of the Apprenticeship as negotiated through the contracting process
- Complete Quality Assurance visits including (where applicable) observation of lessons
- Maintain and issue the Subcontracting Handbook, describing the responsibilities and expectations of both subcontractors and the University
- Provide training to support subcontractors in areas such as funding guidance, standardization and sharing of best practice
- Provide support with the financial claims process and clearance
3.5. Financial Arrangements
At the start of the academic year, subcontractors are provided with a schedule as part of the procedure's manual, which sets out deadlines for submission of paperwork, release of financial and learner reports and approximate payment dates. A financial reconciliation income tracker is sent to individual subcontractors showing all learners qualifying for payment in the period. All subcontractors must be set up as a supplier on the eFinance Portal in order to receive payments. Payments are made within 30 days of receipt of approved invoice.
3.6. Contingency Planning
All learners undertaking training programmes with providers subcontracted by University of Derby remain our responsibility. In the event of the following situations, we remain responsible for making alternative arrangements for the delivery of education and training:
- University of Derby withdraws or terminates a subcontract arrangement, or
- A subcontractor withdraws from the arrangement, or
- A subcontractor goes into liquidation or administration
We will ensure continuity of learning and minimum disruption to learners.
3.7. Policy Review and Publication
This policy is reviewed during each summer term and must be approved by the University’s Further Education Governance Committee. In line with ESFA Funding Guide 2023/24, the policy is published on the University Website.
Please refer to the University of Derby policies and Subcontracting Policy.
4. Policy Implementation
This is an update to the existing policy (2024/25) and the sub-contracting and tender coordinator is responsible for ensuring that all stakeholders are aware of the policy requirements.
5. Sanctions
This policy sets out how we engage with sub-contractors as far as our fees and charges for administering the sub-contract are concerned. No sanctions are applicable.
6. Equality Analysis
This policy sets out how the University calculates its supply chain fees and is applied to all sub-contractors as set out in the ESFA (Education Standards Funding Agency) sub-contracting rules.