Delivery Supply Chain Fees and Charges Policy

This document aims to provide consistency of approach and transparency to Sysco Business Skills Academy Limited (SBSA) supply-chain fees and charges in relation to its Apprenticeship and Traineeship provision; and specifically relating to Subcontracted delivery, which is delivered by a third party organisation/provider whom is ultimately directly funded by the ESFA via a contractual Service Level Agreement (SLA) for the delivery of a proportion of the Apprenticeship/Traineeship provision funded by the ESFA, and for which payments are dependent on learner numbers and/or formula funding values (for Traineeships) and agreed costs with the employers for those specific Apprenticeship programmes.

The rational for our related subcontracting position has been signed off by the Board prior to publication.

It is published in line with ESFA requirements stated in the following funding rules for 2021/22 academic year.

Apprenticeship funding guidance for 2021-22
Funding guidance for young people 2021-22


SBSA holds full accountability for the delivery of the contract which cannot be assigned to subcontractors; all subcontractors comply with the Education Skills Funding Agency rules and documents and any future updates in all matters regarding the delivery of the provision.

The management of subcontractor performance is based on level of approval and risk status. SBSA will monitor, review and evaluate in order to inform corrective, preventative and improvement actions and manage risk through contingency planning. If underperformance is identified, it will be addressed through measured and targeted action plans backed by support and development. 

In partnership with subcontractors, SBSA will operate in the spirit of support and transparency and will also endeavour to learn from subcontractors, recognise and share their good practice where appropriate.

Definition of Terms Standard Management Fee – this fee is determined by the size of the subcontracted partnership contract (as per Maximum Contract Value figure), and is the fee applied to all such contracts to account for standard costs incurred by ourselves through management of these contracts.

Additional Partnership Fee – sometimes there will be a need to apply an additional Partnership fee to offset additional costs incurred for the management of individual subcontracted contracts (this fee will be determined on a contract-by-contract basis).

Subcontracting statement SBSA recognises the need to offer as diverse a range of provision as possible, in as flexible and cost effective a way as possible. By working in partnership SBSA is able to;

  • Engage with the wider community, increasing wider participation and enhance the opportunities available to young people
  • Offer niche and expert provision
  • Be responsive to learner and employer requirements
  • Ensure greater cost efficiency

Continuous Quality Improvements SBSA are committed to continual improvement in teaching and learning, both in its own direct provision and in its subcontracted provision. A range of approaches are employed in order to do this, such as robust evaluation provision and Self-Assessment Reports.

In terms of subcontracting, the following processes are in place to help monitor quality of provision, and actively improve quality on an on-going basis:

  • A robust schedule of Quality Assurance Audits and Quality Improvement support sessions that are carried out throughout the contractual relationship
  • Regular management meetings between SBSA and all its subcontractors (with a minimum of one management meeting per term)

Risk assessment

A series of factors are utilised to produce a risk-rating framework, via a red, amber and green (RAG) system for each factor. Although this list is by no means exhaustive, the factors below are used to develop and improve our evaluation of risk.

Risk factor checklist:

  • Duration of the contract
  • Financial Health
  • Value of the contract
  • Health and Safety/Equal Opportunities
  • Non-completion, leaver or early leaver rate
  • Supplier staff turnover

Once these factors (and others) have been identified via pre-contract due diligence, the RAG system will be agreed.

Contingency Planning

In terms of contingency:

The performance management and support measures ensure processes are in place, in case of sub-contract failure, a high level of due diligence is maintained over sub-contractors, in order to endeavour to identify early signs of organisational failure.

Contingency plans outlining the process to be taken in the event of a breakdown in contracting relationships would include guidance on the continuity of learning, communication to learners and employers, and TUPE guidelines for staff.

Please see our Programme Contingency Plan

Fees Standard Partnership Fee – This fee is applied to all subcontracted contracts and is the proportion of ESFA funding retained by SBSA to mitigate standard costs incurred through its management and delivery of these contracts. These costs include:

  • Administration
  • Processing and storage of all employer/learner paperwork and information at its head office for audit/funding and compliance
  • Monthly financial reports to inform invoicing
  • MIS functions relating to the submission of funding claims to the ESFA
  • Conduct ongoing data self-assessment (DSAT) and funding rules monitoring (FRM) report checks on all subcontract delivery
  • Provision of management meetings to ensure quality of delivery services
  • Quality assurance via observations of teaching and learning in delivery and related IQA
  • Provision of a dedicated Account Manager
  • Provision of professional advice regarding ESFA funding matters
  • Due Diligence support, guidance and checking
  • Delivery of maths and English provision

Additional support may be discussed, agreed, documented and delivered which would be charged at a rate no greater than 5% of the national rate.

Payments to the Supply Chain.

Payments will be made to the Subcontractor according to the schedule for submission identified in the Service Level Agreement and the Subcontractor will be paid monthly based on values in the Funding Claim less the predetermined fee.


Communication & Publication of Policy

SBSA discusses policies and procedures with current and potential subcontractors at the start of the academic year and throughout, inclusive of due diligence and pre-contract meetings. This is also communicated at the signing of the SLA agreements for each subcontractor, and is also available on the SBSA intranet.

Policy Review

This policy will be reviewed in full annually, July of each year.

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