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This Subcontracting Supply Chain 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 with the SFA Funding Rules, the LSIS Supply Chain Management document and the AOC/AELP Common Accord.

This policy relates to activity funded through the Skills Funding Agency (SFA) whereby PDM Traning & Consultancy enters into a subcontracting agreement with a supplier for Apprenticeship recruitment and delivery.

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 under PDM’s direct contract with the SFA.

Rationale for subcontracting


• Recognises the benefits that effective subcontracting can bring to extending the accessibility of provision for learners and thereby contribute to the economic prosperity of our neighbouring local communities.

• Uses subcontractors to widen participation amongst learner groups that it would otherwise be "hard to reach" and other individuals that face barriers to participation in learning and work.

• Uses subcontractors as appropriate to fill gaps in, and to extend the breadth of its provision: for example, through widening the range of apprenticeship frameworks offered to employers and learners and broadening the range of sector subject areas or business sectors that can be covered. 

Quality Improvement


• Actively works with subcontractors to improve the quality of the teaching and learning they deliver and thereby improve the overall quality of teaching and learning for all PDM learners.

• Undertakes observations on all aspects of teaching and learning including information, advice and guidance, progress reviews and assessment.

• Provides timely and meaningful feedback to both subcontractor and delivery staff and observations are incorporated into the moderation and standardisation process, in order that improvement actions impact both internal and subcontractor quality.

• Carries out learner voice surveys to gather feedback from learners.

• Supports subcontractors to implement effective policies and procedures relating to teaching and learning including assessment and verification policies and procedures.

• Supports subcontractors to develop an effective Self-Assessment Report (SAR) and Quality Improvement Plan (QIP) and will incorporate subcontractors SARs and QIPs into the whole  SAR. 

Management Fee

• PDM will retain a ‘Management Fee’ of 20-22% of funding in 2015/6, dependent on funding steam and the level of support required. PDM also reserves the right to increase the management fee to 30% where significant underperformance occurs and/or intervention is required in the management of a subcontractor.

• The Management Fee is calculated based on the level of resource required: to manage effectively the individual subcontractor relationship; to ensure funding returns and requirements are met and to ensure that the high quality of delivery to learners is maintained and that any risk to PDM and Skills Funding Agency is mitigated. 

Support provided to subcontractors

PDM has;

• A Head of Subcontracted Provision to manage the relationship with the subcontractor and take overall responsibility for subcontracting.

• A Head of Quality to ensure that the quality of subcontractor's delivery meets its expectations and to support the continuous improvement of the subcontractor's provision.

• A Head of Contract, Compliance and Funding to ensure the timely and accurate recording of learner information on the PDM ILR.

• Undertakes a regular and substantial programme of quality assurance checks on the education and training provided by subcontractors, including visits at short or no notice and face-to-face interviews with staff and learners. These checks include whether the learners exist and are eligible, and involve direct observation of initial guidance, assessment and delivery of learning programmes.

• Ensures that all of the subcontractor's delivery meets the Skills Funding Agency's Funding Rules. 

Payment terms

Payment will be based on agreed profiles from August to January. February will be a reconciliation month, with payments on actual delivery evidenced through the ILR after that point. 

13/14 Income £124,557.10 Subcontractor cost  £104,218.41

14/15 income £13,458.28 Subcontractor cost £9,486.94 

·    Communication

The Fees and Charges Policy will be routinely communicated to and discussed with current subcontractors as part of the contract review process. 

Policy review

The fees and charges policy will be reviewed annually. 


When a subcontractor is not performing according to contract or there have been other significant issues identified which may be of a financial, quality or audit nature the Head of Subcontracted Provision will raise the issues with the Assistant Principal Adult Skills, Director of Finance or Vice Principal for Curriculum and Quality as appropriate.

Action may include:

• Action plan with or without identified support

• Financial penalty

• Quality “notice to improve” issued

• Higher management fee imposed with mandatory support

• Termination of contract