To ask the Secretary of State for Business, Innovation and Skills what recent assessment he has made of the management fees charged to sub-contractors by the lead contractors of Skills Funding Agency programmes.

The chief executive of the Skills Funding Agency has a statutory duty to make best use of the agency's resources when securing the provision of education and training. Therefore there is an expectation that the funding provided is used for the benefit of the learner and spent on their learning programme or provision. The amount of funding retained by a lead provider for programmes and provision delivered in whole, or part, by a subcontractor must represent good value for money and reflect the actual costs incurred by each party in the delivery of that provision.

The agency published the fees and costs associated with subcontracting taken from the Declaration of Subcontractor forms submitted by lead providers on our website on 22 June 2012. This is designed to enhance transparency; however, the level of these fees varies considerably as the nature of respective services provided by lead providers and their subcontractors also varies a great deal.

The agency will shortly be publishing its intention to require independent assessment of the nature and reasonableness of subcontracting fees for each such arrangement and will work with the FE sector on the detail in the coming weeks.