Supply Chain Fees and Charging Policy (2023 to 2024)

1.    Policy statement

1.1  South Tyneside Works is part of the Inclusive Growth Group of South Tyneside Council. The service is funded through external sources to provide post-16 learning programmes. The service delivers a range of learning opportunities, including non-regulated Adult Education Budget providing introductory and short programmes, Level 1, 2 and 3 accredited Study Programme and regulated Adult Education Budget provision and Multiply.

1.2 South Tyneside Works is committed to growing and diversifying the range of courses it delivers, in line with its Local Strategic Commissioning Statement, to increase participation, target and support the priority learner groups, engage in new and emerging markets and meet the regional and local economic development agenda and increasing prosperity. South Tyneside Works subcontracts provision to suppliers who can evidence high quality delivery.

1.3 An externally delivered commissioning model enables the Council to more effectively:

  • Concentrate on identifying and establish strategic priority delivery areas
  • Respond to local community and employer needs
  • Deliver a broader range of relevant provision to meet requirements
  • Support, challenge and develop capacity of the local supply chai
  • Concentrate efforts on quality assurance

2.    Scope

2.1 This policy applies to all supply chain activity supported by funds supplied by the Department for Education, the Education and Skills Funding Agency (ESFA) and the North of Tyne Combined Authority (NTCA).

2.2 This policy covers 'Provision subcontracting' where there is the delivery of full programmes by the Subcontractor.

2.3 This policy does not cover 'Service subcontracting' where the delivery of a service as part of the delivery of a programme.

2.4 South Tyneside Works retains full accountability for contract delivery.

3.    Overarching principle

3.1 The service is committed to the overarching principle to optimise the impact and effectiveness of service delivery to learners and other clients by:

  • Adhering to the principles of the Ofsted Education Inspection Framework
  • Undertaking fair and transparent procurement activities and conducting robust due diligence procedures
  • Relating the management fee to the costs of the services provided

4.    Subcontracting, commissioning and procurement process

4.1 South Tyneside Works operates a two-stage commissioning process to establish an approved supplier list that offers high quality teaching and learning. Prospective subcontracted suppliers will complete a Selection Questionnaire (SQ) to ensure:

  • There are no grounds for exclusion from delivery
  • The supplier hold appropriate levels of insurance
  • The supplier is sound financially
  • Health and Safety and safeguarding legislation is sufficiently adhered to
  • The supplier has effective safeguarding arrangements in place
  • Suppliers comply with legal obligations relating to equality and diversity
  • Recruitment processes and appropriately targeted
  • A strong track record of delivery
  • Suitably qualified teaching staff are available to the supplier
  • The approach to quality assurance is robust
  • The frequency and approach to information, advice and guidance is suitable to meet the needs of learners
  • The supplier has considered its approach to tracking learner destinations

4.2 Suppliers who are successful at the SQ stage will be invited to apply for funding via a series of further competitions. Applications for funding will be assessed by Skills South Tyneside commissioning panel. The panel will ensure that:

  • The proposed delivery is in the best interests of learners and employers
  • The proposed delivery has a clear strategic fit with service's commissioning strategy, mission, objectives, and values
  • There is sufficient expertise within the supplier to quality assure the provision
  • There is sufficient staff resource in support areas to administer the processes
  • The supplier is approved by our due-diligence process
  • There is sufficient funding available within our allocation
  • The supplier agrees to work within the terms of our contract

5.    Improving the quality of teaching and learning

5.1 Subcontracted suppliers will be expected to meet South Tyneside Works quality assurance standards, being committed to supporting, developing and sharing good practice and professional development of staff through operational meetings, observations of teaching, learning and assessment, learner voice, unannounced visits to learning, deep dives or any other quality review activity.

5.2 The quality of subcontracted provision will be monitored and managed through the South Tyneside Works Quality Framework with the Self-Assessment and Business Improvement processes to ensure continuous improvement throughout the learner journey.

5.3  The following principles guide the quality improvement process:

  • It is collaborative with a focus on driving continuous improvement
  • It is flexible to meet the needs of a range of Learners, Employers and Communities
  • It promotes an open, honest and critical appraisal of learning provision
  • It supports the Ofsted Education Inspection Framework, Matrix Standard for Information Advice and Guidance and guiding principles of ISO 9001 for high quality provision

5.4  Skills Service quality assurance is underpinned by a series of set actions and processes throughout the academic year. These include:

  • Undertaking annual Self-Assessment Report (SAR) and Business Improvement Plan (BIP), and receiving progress reports in line with Ofsted and Matrix
  • Ensuring that the actions contained within the BIP are implemented
  • Reviewing participation, retention and achievement rates, and performance of suppliers against our performance  measures
  • Periodically receiving BIP progress reports
  • Delivering services in accordance with national policy and strategy
  • Monitoring and analysing performance data
  • Monitoring progress against external standards e.g. Ofsted Education Inspection Framework, the Matrix Standard, DfE / ESFA / NTCA Audit requirements
  • Reviewing the quality and efficacy of all aspects of the learner journey
  • Analysis of learner participation and progress
  • Impact and destination tracking

5.5  In addition to desktop data-based analysis of performance and ongoing supplier dialogue, South Tyneside Works will carry out and provide improvement feedback on supplier provision. Our aim is to provide qualitative support and development to supplier senior colleagues and practitioners to raise the quality of learning to be outstanding throughout all supplier delivery.

5.6  South Tyneside Works will undertake OTLA practice and policy deep dives as part of those process with the providers quality assurance representative to standardise grades and ensure that OTLA activity being undertaken by the provider aligns to service expectations.

5.7  A clear set of monitoring activity will be shared with suppliers prior to the quality review. These criteria will inform an action plan to reflect improvements to be made within the supplier's provision to meet Skills Service quality assurance arrangements and Ofsted Education Inspection Framework criteria.

6.    Management fees

6.1 The Skills Service ensures that each subcontractor receives a high level of support and guidance and access to systems and resources, including but not limited to:

  • Ongoing development of strategy and policy
  • Developing practice in conjunction with funding regulations
  • Development of tender documentation
  • Management and coordination of NEPO portal activity
  • Implementing the Skills Service quality framework
  • Contract and performance monitoring
  • Provision of bespoke Information, Advice and Guidance services
  • Financial management
  • Supplier financial audit
  • Legal
  • Quality management systems
  • Management information services and data control
  • Audit of management systems and delivery
  • Quality Review visits
  • Safeguarding of Young People and Vulnerable Adults procedures
  • PREVENT duty
  • Health and Safety compliance
  • Coaching
  • CPD Opportunities and planned training and development
  • Policy development
  • Support with ESFA/NTCA funding rules / regulations interpretation and compliance
  • Updates regarding funding and policy guidance
  • Supporting networks
  • Equality and diversity support
  • Administration of 16 - 19 Bursary and learner support funds

6.2 Before a subcontractor relationship is agreed, South Tyneside Works agrees a detailed list of costs for managing the subcontractor, outlining specific costs for quality monitoring activities and other support activities listed above. These costs are authorised by the Strategic Commissioning Manager to ensure they are reasonable and proportionate to the teaching and learning delivered by the subcontractor and how each cost contributes to delivering high quality learning.

6.3  The management fee retained by South Tyneside Works is calculated as a percentage of the total contract value agreed with the subcontractor, which is reviewed and published on an annual basis.

6.4 This will include a list of specific costs for managing the subcontractor for quality monitoring activities and any other support activities offered by South Tyneside Works to the subcontractor that contributes to delivering high quality teaching, learning and assessment.

6.5 The management fee for subcontracted work has been set at 20%.

6.6 Any variations to this management fee are agreed on a contract and case by case basis and will be undertaken by negotiation and agreement of both Parties. Any variation will be authorised by the Strategic Commissioning Manager.

7.     Allocations and payment arrangements

7.1  Allocations for non-regulated Adult Education Budget funded provision are calculated in accordance with the relevant programme weighting to recognise the relative costs of delivering training provision in different sectors and subjects.

7.2  The programme weight is set by referring to the Sector Subject Area and applying an uplift to a standard hourly rate of £14 per guided learning hour.

7.3  Where the weighted cost per glh rate results in a cost per learner of less than £50 we will uplift the cost per learner to £50.

7.4  Where the weighted cost per glh rate results in a cost per learner of more than £700 we will cap the cost per learner at £700.

South Tyneside Works - non-regulated programme weightings


Sector Subject Area

Weighting Ratio

Funding (per hour)

Example rate (24 hour course)


  • Business administration and law
  • ICT for users (up to level 1)
  • Retail and commercial enterprise
  • Leisure, travel and tourism
  • Arts, media and publishing
  • History, philosophy and theology
  • Social sciences
  • Languages, literature and culture
  • Preparation for life and work





  • Maths
  • English
  • Employability
  • Health, public services and care
  • Education and training
  • Agriculture, horticulture and animal care
  • ICT for users (level 2 and over)
  • ICT for practitioners (up to level 1)





  • Engineering and manufacturing technologies
  • ICT and digital
  • Construction, planning and the built environment
  • ICT for practitioners (level 2 and over)




7.5  Allocations for accredited provision will be based on the national funding rate, modified to reflect the Skills Service management fee.

  • All suppliers will be paid, in arrears, on receipt of validated evidence in accordance with Council financial timescales. 
  • Following validation of the evidence in the ILR / enrolment return, the Skills Service will make the appropriate payment to the supplier based on the level of income earned.
  • All payments will be triggered by validated evidence of delivery and following receipt of a valid and approved invoice. Invoices will contain the supplier order number of the associated schedule and payments made by BACS.
  • Submission of inaccurate information will delay the validation of evidence and impact on the timescales in which payment can be made.
  • Skills South Tyneside expects that suppliers will participate in the assessment of accuracy of payments and review remittance advice to ensure there are no inaccuracies.

8. Policy communication

8.1 The Policy is available on-line at and can be made available in alternative format or language upon request.

8.2 In the spirit of openness and transparency the policy is available in the public domain. The policy will be reviewed at least annually in July of each year. Any changes to the policy will be notified to suppliers as part of their regular performance review or via separate correspondence.

Policy Sign Off: Kevin Thompson, Strategic Commissioning Manager

Date: 24 June 2023