Supply chain/subcontract
The Register of Training Organisations (ROTO) main purpose was to act as a market entry point for
organisations interested in receiving ESFA funding. Since the last time ROTO was open in 2016, it is no longer fit for the purpose of procuring AEB or ESF provision. As such, ROTO is being formally decommissioned on 31 July 2021.
The WMCA, requires all its providers to have a clear rationale as to why they use a supply chain in the delivery of the AEB – this includes recruitment, delivery of teaching, learning or assessment and job find services. We will require providers to set out rationale at course level as part of the supply chain declaration.
The detailed supply chain arrangements which underpin your funding agreement will need to be agreed as part of your delivery plan. If you do not have an agreement in place at the beginning of the funding year, you cannot enter into a supply relationship without the express written agreement of the WMCA.
You must not use your supply chain to meet short-term funding objectives.
If, during the funding year, you wish to make in-year changes to your agreed supply chain delivery member or arrangement, you must provide a business case with a clear rationale
This must be approved and agreed with WMCA prior to any additional supply chain delivery
procurement activity taking place.
The WMCA will be reviewing, through the use of the ILR and its performance management reviews, the contributions of supply chain to your Delivery Plan.
The WMCA considered whether to set a funding cap on management fees for supply chains that undertake direct delivery on behalf of providers. We have concluded not to at this time, as we feel to prescribe in this way could inadvertently set a market rate. The WMCA will expect you to retain evidence to support the levels of management fees you charge for training delivery.
The WMCA will implement additional controls related to sub-contracting and associated third party services provided in the delivery of AEB. More details can be found in Annex B but the key changes are as follows:
- Definition of the sub-contracting to be broadened to supply-chain
- Supply chain intent to be set out through declaration
- Declaration of course delivery at sub-contractor level
- Ofsted inspection outcomes
WMCA will also be restricting the volume and value of WMCA funds held by a sub-contractor through multiple prime contract agreements – Where a supply chain partner delivers for more than one directly contracted provider, the WMCA reserves the right to consolidate the allocation under one direct provider.
Where a provider has a supply chain partner that exceeds £1m, the WMCA will risk assess this arrangement and may decide to cap the arrangement at £1m.
Throughout 21/22, the WMCA will be reviewing its supply chain delivery with the view at in further years it will move towards capping supply chain to 25% of delivery. This will be reviewed as part of the PMR process in 21/22 to understand the impact.