CORNWALL COLLEGE SUPPLY-CHAIN FEES AND CHARGES POLICY FOR 2017-18
(SUBCONTRACTED PROVISION)

Issue Date: 1st August 2017
Version: 1
Review Date: 31st July 2018
Policy Lead: Sue Alvey, Head of Information Management and Data Services
Target Audience: Potential partners, existing partners, Skills Funding Agency, Education Funding Agency

Equality Impact Assessment Date: 01 August 2017
Assessed By: Sue Alvey
Risk Impact Assessment Date: 01 August 2017
Assessed By: Sue Alvey

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THE CORNWALL COLLEGE GROUP SUPPLY CHAIN FEES AND CHARGES POLICY FOR 2017/18
(Previously referred to as the Subcontracted Provision Policy)

Scope
The policy applies to all supply chain activity supported with funds supplied by the Skills Funding Agency, the Education Funding Agency or any successor organisations.

Context
The policy is a mandatory requirement that must be in place prior to participating in any subcontracting activity from 1 August 2013. The content of this policy has been developed in line primarily with the SFA Funding rules, but also with older guidance documentation such as the AoC/ AELP Common Accord, and the LSIS Supply Chain Management document where appropriate to current best practice.

Overarching Principle
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:

  • 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)
  • 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.
  • 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.
  • 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.
  • Signatories 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.

Rationale for sub-contracting
The College in line with its strategic aims and objectives engages with subcontractors to better meet customer needs. Reasons are varied but can include:

  • To provide immediate provision whilst expanding direct capacity. This might include working with subcontractors to explore and learn about new frameworks or sectors prior to investment in resources.
  • Providing access to, or engagement with, a new range of customers that can best meet the needs of learners.
  • 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.
  • To support activity driven by Local Enterprise Partnerships as key areas for skills development.

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 subcontracted activity.

This Policy positions subcontracted 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, regular lesson observations with constructive feedback and the shared resources of professionals to support the subcontractor with any teaching and learning issues.

Publication of information relating to sub-contracting
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). 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. The Fees and Charges Risk Factor Table includes:

  • The typical percentage range of fees retained to manage subcontractors, and how this range is calculated.
  • The rationale used to determine the level of fee retained through each sub-contract is a risk based approach.

The contributory risk factors that would result in differences in fees charged for, or support provided to, different subcontractors might include:

  • Previous track record
  • Success levels
  • Type of customers to be engaged
  • Type of provision to be undertaken
  • Contract duration

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

  • Details of any successful completion ‘bonuses’ where sub-contractors are paid some of the money retained, once it is clear that they will fulfil their contract.
  • 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.

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 sub-contractors will be directed to it as the starting point in any relationship. Current subcontractors will receive a copy each academic year as part of their contract renewal process.

The Fees and Charges Risk Factor Table 2017/18
The standard college management fee is 20% 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 subcontracted provision. This includes the minimum amount of QA activity that the College would attach to the lowest possible risk subcontractor.

Further charges to cover additional costs may be added to the base 20% 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 current and potential subcontractors and includes consideration of performance against due diligence, quality indicators, geographical spread of provision, distance of operating base from TCCG, type of provision delivered etc. 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 subcontractors the opportunity to reduce their fees through continuous improvement. This approach will allow the College to focus support where and when it is needed.

Subcontractor payment report 2016/17

This report is due to be published within 30 days of the 2016/2017 ILR closing. Please follow the link for a full report on the funding paid and retained through Subcontract arrangements in 2016/17.

16-17 Subcontract Funding Report

Standard Support for Sub Contractors
The standard support each subcontractor can expect in return for the fee charged:

  • Printed materials e.g. enrolments/charters/admin packs/handbooks
  • Electronic support files
  • Curriculum Development support
  • Course set up and development
  • Course venue Health & Safety check
  • Continuous daily support from the Subcontract Manager
  • TCCG administrative support function to ensure paperwork received is processed promptly
  • Lesson Observations with constructive feedback and grading from our SET team in line with OFSTED guidelines
  • Quality visits at least twice per year to view contractual performance / quality management systems / procedures / processes / and student feedback. Providing support to assist with Quality Improvement where requested.
  • Constant monitoring of further funding opportunities for subcontractors
  • Monthly funding reports and reconciliations against claims received
  • Quarterly Success Rate reporting and QIP implementation by experienced curriculum leaders if needed
  • Access to Training events / seminars as advised and arranged

Additional Support for Sub Contractors
The precise additional support given to each subcontractor will be negotiated with that subcontractor, but will be based on a ‘risk band’ approach and may include:

  • Additional site/quality visits
  • Additional lesson observations
  • Additional tutor support from curriculum specialists
  • More rigorous verification
  • More support meetings

The risk band will be determined using the table above.

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 subcontractor such as:

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

Payment Terms
The College mutually agrees a contract value for the academic year jointly with the subcontractor on the basis of curriculum plans for an academic year.

The College will pay the actual net amount which has been earned in the relevant period based on enrolment activity on or before the last working day of each calendar month by BACS. A schedule of dates relating to the final date in each month that paperwork can be received and input by the TCCG Administration Team before month end closure will be issued for information and submission accuracy once a formal subcontract agreement is in place.

Payments relating to the relevant month will be made at least on or prior to the last working day of the following month subject to the subcontractor earning enough in enrolments in advance to release a payment. Reconciliation for late notified activity will take place every month through adjusted payments.