1. Introduction

Brighton & Hove City Council (BHCC) receives funding from the Secretary of State for Education through the Education & Skills Funding Agency (ESFA), as an Adult Education Budget (AEB) non-procured block grant. This policy sets out how BHCC meets the Education and Skills Funding Agency (ESFA) funding rules and fulfils the ESFA contract for the Adult Education Budget (AEB) through its subcontracting arrangements. BHCC is committed to the best use of resources in  delivering securing and delivering adult learning provision.

BHCC is the prime contractor with the ESFA and subcontracts it accredited learning provision.

This policy outlines the management charges and fees for those providers this subcontracted liver accredited programme. In addition, the subcontractor  has a   formal contractual agreement which clearly lay out the rights and responsibilities on both sides of the subcontracting agreement for the academic year.

In February 2020 BHCC’s Adult and Community Learning  Service was inspected by Ofsted and rated as 'Good'. The Service seeks to engage subcontractor who have achieved a similar standard and who share an ethos of working for continuous improvement.

Appendix A provides details of the  sub-contractor and contract values for 2020-21.

Appendix B provides a breakdown of use of funding for 2020-21.

2. The rationale for our subcontracting position

As defined in BHCC’s Curriculum Plan 2020-21, the service seeks to deliver high quality adult learning for adults (aged 19+) which meets local need, focusing on widening participation, developing communities, developing the skills of residents (aged 19 and over) with low skill levels, and provide progression routes to further learning, employment or volunteering. 

In 2020-21 BHCC has reduced its subcontracted provision this academic year to accord with reforms made by the ESFA to see a reduction in the overall volume of subcontracted delivery in the sector.

BHCC will subcontract services where necessary in order to either:

  • be more responsive to meet the needs of learners in the city
  • strengthen links with local community organisations for the benefit of adult learners
  • promote more effective collaboration with other adult learning providers in the city
  • diversify the capacity to deliver, by providing  education and training that the service does not have the infrastructure or expertise to deliver itself

The two critical considerations in engaging a sub-contractor is that they will add value to Brighton & Hove’s economy, and that the contract represents value for money. Courses are reviewed on annual and regular basis at governance meetings and curriculum plan agreed.

The 2020-21 procurement process has been  to seek a sub-contractor  to deliver a range of accredited adult education courses in the priority curriculum areas of Employability and ICT Digital Skills as the Covid-19 pandemic has escalated the need for these skills.

BHCC has chosen to subcontract in order to:

  • offer an entry point to learning for residents with low qualifications.
  • fill gaps in niche or expert provision, or provide better access to training facilities
  • enhance and specialist learning opportunities which equip learners with the digital and employability skills to progress into work

BHCC will review its supply-chain fees and charges with its sub-contractor depending on the type and size of contract. These are agreed with the sub-contractor in the negotiation stage of the contract and are subject to due-diligence and a risk assessment. They are also dependent on agreed success rates and volume measures.

3. Subcontracting overview

The process for securing  a subcontractor, follows BHCC’s procurement requirements and  adheres to BHCC  Contract Standing Orders and all relevant procurement legislation. Contracts are awarded on a competitive tendering basis

All subcontracted provision is required to be delivered in line with the ESFA's Funding Rules.

Appendix A provides details of the  sub-contractor and contract values for 2020-21.

4. BHCC’s commitment to improving the quality of adult education

BHCC is committed to continual improvement in teaching and learning in, both subcontracted  and in-house provision. This is demonstrated through the by ensuring that any  subcontractor  is selected through a process that requires demonstrable evidence that they can deliver and sustain high quality education, including high quality teaching, learning and assessment, for all learners in all venues. It is managed through a process of regular performance monitoring and review including independent and paired teaching, learning and assessment observation . This is supported through a comprehensive quality programme of staff development and training.

Subcontractors must  have an excellent understanding of the robust evidence we are required to collect for both the ESFA and Ofsted. The tutors both, BHCC staff and those employed by the provider, will be experienced, appropriately qualified and have current DBS checks, which are confirmed annually.

6. Management fees

BHCC propose to retain a management fee of up to 20% for the 2020-2021 academic year. Please see Appendix B for the specific cost breakdown. In summary, the fee has been calculated on the basis of the salary costs of the Adult Learning Manager and the administrative support necessary to ensure proper contract management, quality monitoring and that data is collected and can be provided to the ESFA in a timely fashion.  

BHCC believes this is a reasonable and proportionate fee to the delivery of the sub-contracted provision and this will be reviewed regularly. Each cost contributes to continuous development of the service and the delivery of high-quality learning to the city. The Adult Learning Manager post will ensure a high quality service is delivered to national standards, benchmarks and regulatory frameworks such including Ofsted. This policy is reviewed annually.

ESFA Accredited Learning

BHCC will retain up to 20% of the contract value delivered by a subcontractor to cover the staffing and other associated costs of supporting and monitoring the subcontracted provision. The remainder of the budget allocation will be used for the provision of learning opportunities, which will be offered to external providers through a competitive tendering process.

ESFA Community Learning

The Community Learning allocation including Family Learning is used for the provision of learning opportunities, delivered by BHCC’s in- house team. There is no management fee component retained in Community Learning. The resource input from BHCC is funded through its ESFA core grant.

BHCC’s Education and Skills Service also works hard to facilitate  the sharing of good practice and peer support across the subcontracted and internal provision.

7. The monitoring process

BHCC is committed to ensuring that the teaching delivered to learners is of the best possible quality and demonstrates excellent impact and services provided.

BHCC has a robust contract monitoring process in place which covers:

• performance against targets/planned delivery

• quality of teaching and learning

• safeguarding

• equality and diversity

• British Values/Prevent

8. Services Provided by BHCC to support the subcontractor

Activities covered under the management costs to ensure the quality of the service and teaching offer include those listed below. The time allocation of the manager’s post (shown as a percentage)  has been forecast based on time allocations used in 2019-20 and may vary with subcontractor’s needs.

Dedicated BHCC contact

  • appointment of a named officer - Education & Skills Officer/ Adult Learning Manager - as first point of contact who will respond promptly to any queries and monitor the performance against contract throughout the year.

Strategic Planning, Procurement Process and Due Diligence(15%)

  • identifying needs and priorities for the service
  • programme planning based on local and national priorities
  • performance reporting to BHCC’s adult learning Governance Board
  • tender and/or procurement authorisation process
  • development, implementation and management of the Due Diligence process in accordance with funding agency rules
  • tender and/or procurement evaluation and award of contracts
  • pre-contract meeting
  • contract development, negotiation and agreement involving Legal services
  • setting up of facility for contract payments
  • managing proposed changes to contract in-year

Management of subcontracted provision (25%)

  • regular contact, dialogue and professional support with key sub-contractor contacts though contract monitoring meetings and governance meetings
  • regular contract meetings to monitor provider performance against contract requirements and the quality of delivery against national quality benchmarks
  • monitoring of the sub-contractor to  ensure compliance with their obligations in respect of processing personal data under the sub-contract and complying with associated legislation
  • papers and co-ordination of termly governance meetings and subcontract performance review meetings

Funding Body Compliance (25%)

  • information, advice, guidance and support to ensure delivery are compliant with ESFA Funding Rules
  • maintain BHCC’s relationship with the funding bodies
  • upload claims and financial regulatory documents to the funding bodies
  • develop documentation and paperwork in accordance with the requirements of the funding bodies, for example, enrolment form
  • purchase and maintenance of a specialist Management Information System
  • collect data, record it on the Service’s Management Information System and submit accurate funding returns to the ESFA
  • Monthly ILR return process
  • manage the ESFA  funding allocation
  • manage external audits and internal audit such as paperwork checks, register checks and quality checks
  • manage contract payments to subcontractors
  • process and submit to the ESFA of ILR returns, data validation and reporting.
  • process business support paperwork, invoices, regular finance  payments and inputting of data

Quality Assurance (35%)

  • provide quality Assurance and Improvement support
  • review, scrutinise and provide constructive feedback on reports, plans and analysis provided by sub-contractors, including:
    • Self-Assessment Report (SAR) & Quality Improvement Plan (QIP)
    • Safeguarding log
    • Staff database
    • Complaints log
    • KPI & performance reports, including delivery information and observation findings
  • review the annual Self-Assessment Review (SAR). This document will involve all staff within the service, learners and appropriate partners, employers and stakeholders. The SAR will review performance in line with the Education Inspection Framework and include reference to national benchmarks, trends and minimum standards. The SAR will be updated through the year, as and when necessary, for example, in response to outcomes
  • review the Quality Improvement Plan (QIP) that is developed alongside the SAR and details key improvements to be made within year, the people, the improvements involved and the deadline for the improvement. The QIP will be reviewed and formally updated at least termly
  • undertake direct observations of learning, teaching and assessment as appropriate.
  • participate in sub-contractors’ course monitoring and RARPA review activity. Sample course folders to ensure they meet the agreed quality requirements
  • spot check venues being used to deliver BHCC funded learning opportunities to ensure compliance with requirements.
  • scrutinise sub-contractor ILR data. This would include undertaking compliance checks on information included in the ILR in relation to the ESFA Funding Rules, such as:
    • undertake learner eligibility checks and learner file audits  - as per ESFA Funding Rules
    • undertake audits and consultation activity with learners, non-learners and key stakeholders / partners to inform provision and practice
    • commission external representatives to undertake impartial quality assurance checks of BHCC and sub-contractor practice.

In addition BHCC provides additional strategic and operational support through its Head of Employment and Skills, data analyst and finance team which has not been costed.

8. How and when the policy is communicated to and discussed with current and potential sub-contractors.

The policy is communicated through termly governance/contract meetings with the sub-contractor and at contract award meeting with potential sub-contractor.

9. Payment Arrangements

Sub-contractor accredited learning payments will be based on the outcomes from the ILR.

The sub-contractor are paid at regular intervals throughout the year and in line with funding contract and related agreements. The subcontractor is required to submit monthly ILR Data to the Council at least five (5) Working Days before the ESFA deadlines.

Once the monthly ILR Data has been processed, the Council shall confirm the Invoice Amount for that month. The sub-contractor shall submit an invoice for the Invoice Amount within thirty (30) days of the Council confirming the Invoice Amount. The Council shall make payment to the Service Provider within thirty (30) days of receiving a valid invoice from the sub-contractor.

10. Policy Review:

This policy is reviewed annually and updated accordingly. The next planned review date is July 2021.

The Policy may be reviewed if significant changes in the ESFA Rules occur. Any changes to this policy that occur mid-contract will be discussed with the sub-contractor.

In addition, BHCC, as part of the sub-contractual agreements, will undertake a performance and delivery review to enable re-profiling of payments, if delivery volumes or quality of service has fallen below agreed levels.

Appendix A: Subcontractor summary information

UKPRN Provider contract value Management fee held by BHCC from the funding generated Contract payable Contract start date Contract end date
10047679 Creative Process Digital Ltd £157,699 20% £126,159 30 November 2020 31 July 2020


Appendix B: Funding table 2020-21

AEB allocation - adult skills (external delivery)



AEB allocation - community learning including family learning  (internal delivery)



Total AEB allocation



ACCREDITTED LEARNING delivered by Subcontractor


Funding  generated


External subcontracted maximum contract value


20% total management fee based on accredited learning  contract value


COMMUNITY  LEARNING BHCC In-house Direct Delivery

Funding allocation


Specific Management Costs for Subcontracted Delivery: Accredited Learning



Contribution towards Adult Learning Manager salary (1 FTE cost. including NI & on-costs).

Key functions include (percentage time):

    • Strategic Planning & procurement process, Due Diligence (15%)
    • Management of subcontracted provision & (25%)
    • Funding Body Compliance (25%)
    • Quality assurance (35%)

















External audit certification fees



External quality assurance and compliance

Data entry and ILR submission





Additional strategic support by BHCC staff

    • Head of Education & Skills
    • Data analyst
    • Finance staff
    • Comms & Press office


No fees undertaken


Review date and Officer responsible

This policy will be reviewed annually, and in-year as required by funding guidelines and rules.


31 October 2020

Review date               

1 July 2021

Officer Responsible   

Assistant Director of Education & Skills


Jo Lyons signature

Jo Lyons


24 November 2020

Approved by Governance Board 3 November 2020