Financial and insurance services

Tender description

This Contract Notice is issued by the Department for Education (DfE) and is an opportunity relating to the establishment of a funding vehicle (the ‘Early Years Investment Fund’ (‘EYIF’)) designed to increase the provision of early years places in England, focusing on those private and voluntary providers who will deliver the 30 hours free childcare that will be available to working families from September 2017. The DfE wishes to appoint a supplier which will (a) establish the funding vehicle (the EYIF); and (b) establish a General Partner to act in such a capacity to the EYIF — raising investment for the EYIF (through open competition), together with managing and administering the EYIF (either directly or via its appointed Fund Manager). Further details of the opportunity are set out in Section II.2.4 and the procurement documents which are available from the contact point (URL) in Section I.3. By increasing the availability of 30 hour places, the EYIF aims to create a work incentive for families with young children. Alongside the work incentive, the funding vehicle will focus on providers who are able to demonstrate social impact, directly through the provision of their childcare services and/or through provision of additional services in the wider community. It is anticipated that loan investments made to providers from the EYIF will be used for working capital (including operating costs); traditional capital builds (including new builds, expansions and refurbishments) and maintenance and infrastructure improvement projects. The General Manager (or its appointed Fund Manager) will also be responsible for establishing and administering a Support Grant Facility (approx. 2 000 000 GBP to be funded by the DfE) to support providers accessing the EYIF. It is anticipated that support through the Support Grant Facility may include but is not necessarily limited to: grants for business planning support, capital build advisory support and for working capital. At this stage the DfE is not limiting the approach to the Support Grant Facility but the preferred option, where professional support is required, is that the Fund Manager will be responsible for the competitive procurement of a panel of approved advisers to deliver support to successful applicants. DfE's initial investment to the EYIF is anticipated to be in the region of 10 000 000 GBP (excluding the Support Grant Facility) and the Fund Manager will seek to attract — through an open competitive process — further investment (approx. 20 000 000 GBP) from commercial and social investors creating a larger pot for distribution (as loans) directly to providers. The initial term of the General Partner's (and Fund Manager's) role is anticipated to be 13-20 years, including an investment period of approximately three years. This contract length may be subject to up to two extensions each of up to one year in length. Please note this is an indicative contract length only as the length of contract will be somewhat contingent on the fund products proposed, which will be one aspect to be explored as part of the Competitive Dialogue process. The EYIF management fee will be a key subject of the dialogue process and will be focussed on the following principles: 1) Suppliers are required to propose a fund management fee structure that aligns interests, incentivises the manager, and provides value for money for the DfE –including, for example, performance based elements- but the precise details and commercial arrangements in relation to the fee will be subject to the dialogue process. 2) The DfE expects Suppliers to propose a management fee that is commensurate with the shifting responsibilities of the Fund Manager across the lifetime of the EYIF. 3) Suppliers will be required to provide a breakdown of the costs anticipated for managing the EYIF and associated loan portfolio. 4) In addition, details in relation to the costs of administering the Support Grant Facility will also be required. As part of the procurement the DfE will be evaluating the costings of various proposals on the basis of how closely they adhere to the above principles. The indicative contract value is anticipated to be in the range of 3 000 000 GBP-8 000 000 GBP over the life of the EYIF to be met primarily by returns to the EYIF. It is anticipated that the EYIF will be established as a UK Limited Partnership and that the General Partner will enter into a Services Agreements with the DfE for the establishing, raising investment for and managing the EYIF and for its role in managing and administering the Support Grant Facility. Further details regarding the opportunity are set out in the procurement documents which are available from the contact point (URL) in Section I.3.