Employment and Skills

Lead contractors charge £175 million in management fees

Lead contractors charge £175 million in management fees

Research undertaken by Fe Week claims that lead providers were charged more than £175 million in management fees to subcontractors in 2011/12. The research which analysed declaration forms submitted by lead providers to the Skills Funding Agency, found that contract holders took an average top slice of 23 per cent from sub-contractors. The research further found that Somerset County Council kept 37 per cent of funding. The findings have fuelled claims that sub-contractors are being ripped off by FE colleges and that there needs to be tighter rules regarding sub-contracting.

The Association of Employment and Learning Providers (AELP) and the Association of Colleges (AoC) are discussing a new code of conduct for the practice of sub-contracting. The Skills Funding Agency Figures can be found here

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