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Sub-contracting and Management Fees Policy

Lifetime Training Group (‘Lifetime’) will ensure that all provision funded through its direct ESFA contracts, whether delivered by Lifetime or a sub-contracting organisation will provide an excellent learner experience and represent good use of public monies.

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Our commitment

Lifetime Training Group (‘Lifetime’) will ensure that all provision funded through its direct ESFA contracts, whether delivered by Lifetime or a sub-contracting organisation will provide an excellent learner experience and represent good use of public monies.

The Apprenticeship, Traineeship and Jobs Growth Wales Programmes, led by the Welsh Government, are supported by the European Social Fund.

Objectives

This policy provides transparency for all sub–contractors, funding bodies and other associated parties or individuals regarding the procurement, due diligence process, support and charging rationale related to sub-contracted provision using Lifetime’s own direct Contract

1. Scope

This policy covers:

a) Rationale for sub-contracting
b) Procurement
c) Due Diligence Process
d) Contract Agreement
e) Management Contribution Fee Policy
f) Typical Management Rates/Calculations
g) Support Provided to Sub - Contractors
h) Payment Terms
i) Communicating This Policy
j) Policy Review
k) Policy Amendments

2. Key Contacts

Peter Mitchell - Chief Financial Officer

Angela Maguire Lewis - Quality Director

Piran Scott – Divisional Finance Director

Daniel Ball – Head of Funding and Compliance

3. Responsibilities

Peter Mitchell - Overall responsibility for decisions regarding final contract values, management fee rates and payment schedules.

Angela Maguire Lewis - Overall responsibility for the quality assurance of sub-contracted provision, performance and relationship management

Piran Scott/Dan Ball - Overall responsibility for contract negotiations/, due-diligence and compliance of learner records and data

A. Rationale for Sub-Contracting

Lifetime currently hold the view that sub-contracting should be maintained at a nominal proportion of the overall funded provision. However we will consider the use of a sub-contractor when all of the following criteria apply:

  • There are clearly-identified strategic benefits to the sub-contract arrangement
  • The provision includes delivery in the SFA priority areas, particularly to 16-18 year olds.
  • The provision complements, rather than displaces, Lifetime’s own provision.
  • The sub-contracting organisation has a proven track record in the delivery of publicly-funded training provision
  • The provision is suitably located to enable effective quality assurance monitoring and audit by Lifetime.

B. Procurement

Procurement of sub-contractor services will usually be in response to requests/approaches made by the potential contracting organisation to Lifetime. If additional procurement of sub-contracting services is required, this will be by invitation only and contracts shall be awarded based on an approached organisation’s suitability, track record and capacity to deliver the service.

C. Due Diligence

Lifetime has a formal due diligence process as follows:

1. An initial discussion between a senior manager of the potential sub-contracting organisation and the Sub-contracting & Partnership Manager to ascertain provision type
2. Agreement to progress onto the due diligence stage confirmed by an Executive Team member
3. Issue of the due diligence document for completion by the potential sub-contractor
4. Receipt of the completed due diligence document and supporting evidence
5. Request for references made by Lifetime
6. Review of due diligence information by Rachel Thomas, Peter Mitchell (financial accounts) and members of the Quality team.
7. A risk analysis conducted and documented collectively by the personnel above
8. Review of references obtained
9. A recommendation made to the executive team by Rachel Thomas
10. A decision is agreed and confirmed by the Executive Team
11. Potential sub-contractor to be informed of decision

D. Contract Agreement

Lifetime will use the model Sub-Contractor’s Agreement published originally by the Education and Skills Funding Agency, amended as required by mutual agreement between both parties. As minimum content, this document includes all of the mandatory requirements set out by the Education and Skills Funding Agency each year within the Funding Rules and Regulations. Signatories will always be at Director level within both organisations.

E. Management Fee Policy

Lifetime is committed to ensuring that the maximum amount of funding possible is passed on to our sub-contractors to enable the best possible learning experience to the learner.

The percentage of funding retained by Lifetime is founded upon the basic requirement to cover the costs associated with the management of sub-contracted provision along with an appropriate level of mark-up on such costs. The costs will vary according to the type of provision, the deemed risk of the provision and data processing/maintenance costs. These costs include but are not limited to the following considerations:

Direct costs of relevant personnel and their teams as detailed in section 3 ‘Responsibilities’
Pro-rata costs of any software Licence costs resulting directly from the additional data-management required for sub-contracting activities

F. Typical Management Rates and Calculations

Due to the variety of permutations as to how the sub-contract agreement is constructed, it is the intention that management fee rates will vary between a minimum of 15% and a maximum of 25%of the value of the funding drawn in the contract period.

G. Support provided to Sub-Contractors

The following support and facilities will be made available to Sub-contracting organisations at no additional charge to them:

1. Inclusion in CPD and other internal Lifetime programmes, as relevant and appropriate
2. Sharing of relevant information and publications/updates from the SFA and OFSTED made available to Lifetime
3. Advice and assistance as necessary in order for Sub-contractors to maintain a self-sufficient and effective ‘continuous improvement Strategy and associated working practices, including the Self-Assessment Process

H. Payment Terms

Lifetime recognise the impact that cash flow has on smaller organisations and will always endeavour to ensure that payment for provision is made as soon as is practical after delivery has taken place.

Lifetime’s payment schedule is as follows:

Event

Date/Deadline

Responsibility

Funding report released by SFA

6th day of each month

Lifetime

Calculation of funds to be passed to subcontractor

9th  day of each month

Lifetime

Invoice supplied to Lifetime

11th day of each month

Sub-contractor

BACS payment to Subcontractor

12-15th  day of each month

Lifetime

 

I. Communicating this Policy

This Policy is published on the Lifetime Training Website. Potential Sub-Contracting organisations will be signposted to this policy prior to any contract agreement.

J. Policy Review

This policy will be reviewed annually in August. 

K. Policy amendments

We reserve the right to change the policy in particular instances where the policy is deemed to be unsuitable and without prior warning.

This policy is effective from August 2017.

(This version - revised August 2017)

2015-16 Sub-Contracting activity and payments:

SUB - CONTRACTOR
ISA Training Limited
UKPRN: 10003398

Contract start date: 01.08.2015
Contract end date: 31.07.2016

Provision type 
2015-16

2015-16 Gross SFA Funding

Management fee rate

Management fee

Net SFA Funding passed on
85%

16-18 Apprenticeships

£183,757.83

15%

£27,563.67

£156,194.16

19-23 Apprenticeships

£56,444.76

15%

£8,466.72

£47,978.04

24+ Apprenticeships

£23,657.73

15%

£3,548.66

£20,109.07

Workplace Learning

£0.00

15%

£0.00

£0.00

Total

£263,860.73

15%

£39,579.05

£224,281.28

SUB- CONTRACTOR
L&F Inspired Hair
Academy Limited
UKPRN: 10031526

Contract start date: 01.08.2015
Contract end date: 31.07.2016

Provision type
2015-16

2015-16 Gross SFA Funding

Management fee rate

Management fee

Net SFA Funding passed on
80%

16-18 Apprenticeships

£118,558.44

20%

£23,711.69

£94,846.75

19-23 Apprenticeships

£51,007.25

20%

£10,201.45

£40,805.80

24+ Apprenticeships

£19,934.65

20%

£3,986.93

£15,947.72

Workplace Learning

£0.00

20%

£0.00

£0.00

Classroom Learning

£0.00

20%

£0.00

£0.00

Total

£189,500.33

20%

£37,900.07

£151,600.27

2016-17 Sub-Contracting activity and payments:

SUB - CONTRACTOR
ISA Training Limited
UKPRN: 10003398

Contract start date: 01.08.2014
Contract end date: 31.07.2017

Provision type
2014-15

2016-17 Gross SFA Funding

Management fee rate

Management fee

Net SFA Funding passed on
85%

16-18 Apprenticeships

£149,669.68

15%

£22,450.45

£127,219.23

19-23 Apprenticeships

£43,442.61

15%

£6,516.39

£36,926.22

24+ Apprenticeships

£9,806.27

15%

£1,470.94

£8,335.33

Workplace Learning

£0.00

15%

£0.00

£0.00

Total

£202,918.56

15%

£30,437.78

£172,480.78

SUB - CONTRACTOR
L&F Inspired Hair
Academy Limited
UKPRN: 10031526

Contract start date: 01.08.2016
Contract end date: 31.07.2017

Provision type
2016-17

2014-15 Gross SFA Funding

Management fee rate

Management fee

Net SFA Funding passed on
80%

16-18 Apprenticeships

£28,089.78

20%

£5,617.95

£22,471.83

19-23 Apprenticeships

£23,980.79

20%

£4,796.16

£19,184.63

24+ Apprenticeships

£15,280.57

20%

£3,056.11

£12,224.46

Workplace Learning

£0.00

20%

£0.00

£0.00

Classroom Learning

£0.00

20%

£0.00

£0.00

Total

£67,351.14

20%

£13,470.22

£53,880.92

 

2017-18 Sub-Contracting activity and payments:

SUB - CONTRACTOR
Mitchells & Butlers plc
UKPRN: 10055995

Contract start date: 01.08.2017
Contract end date: 31.07.2018

Provision type
2017-18

2017-18 Gross SFA Funding

Management fee rate

Management fee

Net SFA Funding passed on
100%

16-18 Apprenticeships

£3,353.00

0%

£0.00

£3,353.00

19+ Apprenticeships

£244,689.00

0%

£0.00

£244,689.00

Workplace Learning

£0.00

0%

£0.00

£0.00

Classroom Learning

£0.00

0%

£0.00

£0.00

Total

£248,042.00

0%

£0.00

£248,042.00

SUB - CONTRACTOR
ISA Training Limited
UKPRN: 10003398

Contract start date: 01.08.2017
Contract end date: 31.07.2018

Provision type
2017-18

2017-18 Gross SFA Funding

Management fee rate

Management fee

Net SFA Funding passed on
85%

16-18 Apprenticeships

£144,414.93

15%

£21,662.24

£122,752.69

19+ Apprenticeships

£50,688.59

15%

£7,603.29

£43,085.30

Workplace Learning

£0.00

0%

£0.00

£0.00

Classroom Learning

£0.00

0%

£0.00

£0.00

Total

£195,103.52

 

£29,265.53

£165,837.99