Supply Chain Policy

Sub-contracting and Management Fees Policy

Formed in 1992, Skills Training UK has over 20 years experience in delivering employability and skills solutions. Skills Training UK is a Prime Contractor to the Education Funding Agency (EFA) and Skills Funding Agency (SFA) across a range of mainstream provision including the Youth Contract in two regions, ESF English and Maths for the Employed, and Apprenticeships.  We also deliver Traineeships and Study Programme as a Prime Contractor to the SFA and EFA.

We ensure that all provision funded through our contracts with the EFA, SFA, and DWP provide good value for money for both the Funding Organisations responsible for providing the funding for the provision as well as the organisation delivering the programme as a sub-contractor to us. We expect and maintain a high standard of delivery for all customers using our provision, and those organisations who sub-contract from us are termed (and henceforth described as) ‘Delivery Partners’ to indicate that in partnership we share a responsibility to deliver the contract to Skills Training UK standards and expectations.

We are the only organisation in the UK to have achieved the highest grade of Excellent for the Merlin Standard twice (2012 and 2014), which has been created to recognise and promote supply chain excellence in design, implementation and performance. We are also the only organisation to have achieved the highest grade of Strong for the DWP Provider Assurance Team assessment which measures governance, compliance and data security of DWP contracted provision.

The purpose of this policy is to provide transparency for all Delivery Partners, Funding Organisations and other associated parties or individuals regarding the procurement, due diligence process, support and charging rationale related to sub-contracted provision using Skills Training UK’s direct contract with any Funding Organisation.

This policy will be reviewed on at least a biannual basis and will be published on the Skills Training UK website.

Rationale for sub-contracting delivery

Skills Training UK believes that sub-contracting should be maintained at a nominal proportion of the overall funded provision in line with Funding Organisation expectations. We are an experiences supply chain manager who has worked with over 70 Delivery Partners across a range of different contracts and we will consider the use of sub-contracted provision when all of the following criteria apply:

  • There are clearly-identified benefits to utilising the Delivery Partner
  • Where the customer experience is likely to benefit or be enhanced by the inclusion of the Delivery Partner – for example a specialised service
  • The Delivery Partner has a proven and demonstrable track record in the delivery of the kind of provision being sought for by the Funding Organisation
  • The provision is suitably located to enable effective monitoring in terms of performance and continuous improvement by Skills Training UK

How we identify Delivery Partners

Identification and procurement of Delivery Partners will usually be in response to requests/approaches made by the Funding Organisation to Skills Training UK. In all instances where we are looking for Delivery Partners an advertisement (or ‘Call’) will be made available on our website indicating that we are looking for suitable Partners for a specific contract(s). We may also use a range of other information and business development websites to advertise a Call for Partners. If additional Delivery Partners or services are required following a Call, this will be by invitation only.  Contracts shall be awarded based on an approached organisation’s suitability, track record and capacity to deliver the service.

Due Diligence process

Skills Training UK operates a due diligence process as follows. Note that due to the nature of Calls for Delivery Partners, Points 1 and 2 may follow at a later date following receipt of the Expression of Interest; however no contract will be issued or agreed without at least one face to face meeting and follow up from the Development Director.  All Points below must be completed for a potential Delivery Partner to pass our due diligence process. 

1. An initial discussion will be held between a Senior Manager of the potential sub-contracting organisation and the Operations Manager for the programme to ascertain provision type

2. Agreement to progress onto the due diligence stage confirmed by a follow up meeting and/or discussion with the Development Director for Skills Training UK

3. Expression of Interest is issued to the potential Partner Organisation for completion. Supporting due diligence documentation may be requested at this point; a list of expected due diligence paperwork is listed below:

Policies and Procedures

1.1       Expression of Interest / Pre-Qualifying Questionnaire

1.2       Statutory Accounts for last 3 years (or Management Accounts where 3 years accounts are not held

1.3       Insurance Certificates

Employer Liability

Public Liability

Professional Indemnity

Please note that a threshold amount may be expected for each of these depending on the contract being tendered for, for example Employer Liability may be set at a minimum of £5m

1.3       Health & Safety

1.4       Data Protection & Information Sharing

1.5       Safeguarding           

1.6       Equality & Diversity

1.7       Sustainable Development

1.8       Business Continuity Plan

1.9       Human Resources Policy

1.10    Details of Staff bonus structure

1.11    Training and Development Plan

Evidence of Quality Standards

Evidence of any particular quality standard appropriate to the contract; the following .

2.1       Matrix Standard

2.2       Merlin Assessment 

2.3       Investors in People

2.4       ISO9001 / ISO27001 / ISO14001

4. It is expected that all Expressions of Interest will have a reference from at least one organisation for whom the Delivery Partner has previously delivered a contract. Where this is not possible a statement explaining the reason for the absence of this may be considered – for example because the company is new and has no existing delivery history

5. Skills Training UK receives completed Expression of Interest form and due diligence documentation and begins the due diligence process

5. Due diligence information will be formally reviewed by the Development Director who will discuss potential Partners with the Operations Director or Skills Director as appropriate to determine service need and also the level of contract available.

6. References contacted by Skills Training UK to confirm contract delivery and performance where stated.

7. A recommendation is made by the Development Director to the Senior Management Team based on the
8. Potential sub-contractor to be informed of decision

Contract Agreement

Skills Training UK will use the model Sub-Contractor’s Agreement published by the Funding Organisation and amended as required by mutual agreement between both parties. This ensures that contracting is transparent and that terms and conditions (except where amended and agreed by mutual consent) mirror those between Skills Training UK and the Funding Organisation.

Signatories for contract agreement will always be at Director level within both organisations and no contractual agreement can be agreed between Skills Training UK and another organisation without Board approval and a Directors signature.

Management Fee Policy

Skills Training UK has set a basic management fee of 20% which has been applied across all contracts commenced within the 2014/15 academic year and will continue to be applied in the 2015/16 academic year. The percentage of funding retained by Skills Training UK is used to recover the costs associated with the management of sub-contracted provision; the following is a non-exhaustive list of support provided to all members of our Supply Chain

  • Regular support and engagement with Supply Chain Partners through the Operations Manager for the relevant contract
  • Regular support with delivery and quality through engagement with the Continuous Improvement Team of Skills Training UK, including observation of teaching and learning, file quality, and compliance monitoring
  • Use of our management information systems to input data and manage performance where appropriate
  • Access to the Data Management Performance Team with Skills Training UK who are responsible for the processing and maintenance of claims data
  • Access to our Finance Team who will coordinate with the Data Management Performance Team to ensure performance within each month is recognised and that payment is authorised and released appropriately
  • Inclusion in training and development opportunities as relevant and appropriate, including training in:
    • Systems and processes associated with delivery of the contract including paperwork and claims processes
    • Data Security and Protection
    • Safeguarding and Safer Recruitment Training
    • Regular communication regarding best practice
    • Sharing of relevant information and publications/updates from the SFA and OFSTED made available to Skills Training UK
    • Support and guidance in order for the Supply Chain to maintain a continuous improvement strategy; including the Self-Assessment Process

Payment Terms

Skills Training UK will endeavour to ensure that Partner Organisations will be paid within 30 days from receipt of funding from the Funding Organisation; contracts will reflect these terms and conditions. Skills Training UK recognises the impact that cash flow has on smaller organisations and will always endeavour to ensure that payment for provision is made as soon as is practical after delivery has taken place.

  1. Claim period ends – this is typically the last day of each month though can vary between contracts. 
  2. Final claim submitted to Funding Organisation; this is usually up to 5 working days after the close of the claim period
  3. An Activity Summary will be sent out to all Delivery Partners within 5 working days of the claim period end which outline activity undertaken in each month
  4. Delivery Partner agrees Activity Summary reflects activity undertaken during claim period
  5. Once Activity Summary is agreed with the Delivery Partner a self-billing invoice will be raised and sent to the Partner within 5 working days.
  6. Skills Training UK is paid by the Funding Organisation
  7. Payment is released to the Delivery Partner within 10 days of payment being received from the Funding Organisation


Payments to Supply Chain Partners (For Academic Years 2015-2016) and sub-contracting agreements for 2016/17

A copy of the payments we made to Supply Chain Partners for 2016-2017 are provided in the attachment here.

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