The Lounge - General Chat

ESFA must investigate all providers fairly and protect Public Funding

For many years I have been supporting SME providers with all aspects of their provision, especially apprenticeships. One area that keeps coming to the surface is how ‘Prime’ providers (apprenticeship and AEB) withhold money that is supposed to go direct to the source to ensure a quality programme can be delivered. 

High quality apprenticeships mean that those undertaking apprenticeships have confidence that the skills they are learning will help them succeed, progress and thrive, with this is high quality delivery, the funding filtered to the delivery team must come through to ensure “high quality” can be delivered to the apprentice. 

There are some Prime providers that hold back funding to the subcontractor and also hold back completion payment due to the restrictions that they have added in their contracts, moreover this has come more prevalent during the global pandemic (COVID-19) where clauses in the contract have come into force due to non-compliance or non-activity due to COVID-19. 

As an example – one Prime provider is holding funding back due to a compliance clause in the contract where apprentices go past 90 days achievement. Due to COVID-19 learners cannot achieve within the 90 days, the Prime provider is using a contract clause prior to COVID-19. Clearly the Prime provider is not taking into consideration COVID-19 and understands that the ESFA will be performance managing them against their Timely Success Rates. This is clearly not the case and the ESFA have informed “We are not calculating Provider level QARs this year and there will be no performance management by the ESFA carried out on this basis.”

Within the subcontract contract there is also a Force Majeure clause that informs of “Neither Party shall be in breach of this agreement nor liable for delay in performing, or failure to perform, any of its obligations under this agreement if such delay or failure result from events, circumstances or causes beyond its reasonable control.” The Prime provider is also not taking this into consideration. 

The examples above demonstrate some serious issues in how Public Funding is being channelled to the source to ensure high quality provision can happen, it also shows that some Prime providers are not understanding contract law or how the global pandemic is impacting on the whole delivery / supply chain. Furthermore, it also demonstrates that the ESFA management of subcontracting, contracts and Primes is lacking in substance and ALL Providers must be represented on pari passu.

When the ESFA is questioned around the spending of Public Funding through subcontracting and to investigate Prime providers that hold back funding and are not understanding contract law, the answer given is a stock answer of “the relationship between prime providers and subcontractors is a commercial relationship. As such, we are not privy to the detail contained within individual subcontracts and cannot become involved in disputes related to subcontractors.”

As this is a Friday thought article, I want to raise some questions for the ESFA and for providers to develop a Think Piece for change, change to support all providers to ensure pari passu and to ensure the ESFA represent Public Funding in the correct way. 

  • I recently held a LinkedIn Poll that asked, “Should the ESFA investigate the Prime Provider for misuse of Public Funding where a Prime subcontracts out provision?” 94% of respondents answered ‘Yes’. So, given this, I am suggesting a major step change is needed within the ESFA, where the ESFA will investigate Prime providers and not refer to the stock answer as above. 
  • Under the ‘Nolan principles’ (The Seven Principles of Public Life), specifically selflessness, holders of public office should act solely in terms of the public interest. Therefore, I expect the ESFA to investigate where Public Funding is going, if it is being utilised correctly and going to the correct source. I see this sitting outside of any ‘commercial relationship’, as Public Funding must be utilised for correctly and is in the public interest to know how it is being used. Will the ESFA investigate Prime providers and stop sitting on the fence with a stock answer?

Finally, to me, Primes must act in the interest of their supply chain and learners, failure of a subcontractor to comply to a contract clause because of COVID-19 is not a compliance issue, where the Prime does not pay the Subcontractor this is a misuse of Public Funding, in my opinion. Prime providers who do not support the supply chain need to be challenged, the ESFA must be in support of the funding going to the correct source and must investigate providers fairly and equally irrespective of any commercial relationship’.

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