Contract Cleaning: The Apprentice
- Blog Article • February 1, 2018
CEO, Lee Andrews, discusses the affect of the Apprenticeship Levy on the Cleaning Industry
Since April 2017, any UK company with a payroll of over £3m is required to pay into the Government’s new Apprenticeship Levy at an annual rate of 0.5% of gross payroll. The way it works is that companies who are liable can then ‘earn back’ their payment by commissioning external training providers to deliver apprenticeship training to staff who are working towards an apprenticeship standard – as signed off by the IfA (Institute for Apprenticeships).
Companies cannot deliver the training themselves unless they are ROATO registered (Register of Apprentice Training Organisations) and if they don’t ‘earn back’ the levy within two years, they forfeit it. In theory, existing staff can receive apprenticeship training in the form of upskilling, so technically it’s not restricted to traditional apprentices, such as school leavers.
There’s no denying the benefits of apprenticeships. Guiding young people into a vocation, upskilling existing staff and increasing productivity are all laudable objectives. The question is: will the levy work for commercial cleaning, or will it just become another payroll tax on companies above a certain size?
As I see it, there are a number of difficulties that mean the scheme faces a tricky future in our industry:
1– Will young people ever view cleaning as an industry where they want to develop their skills as a basis for a future career? I don’t mean in areas like administration and accounts, but in operations. That perception, of course, is partly down to ourselves as an industry to change.
2– We are nearly 12 months into the scheme, and although a cleaning-specific apprenticeship for frontline staff is in the pipeline, it is several months away from being signed off by the IfA. No industry specific management apprenticeship is currently planned. As such, it is currently difficult to ‘earn back’ the levy against anything other than generic administrative or accounts apprenticeships. A typical admin apprenticeship will allow you to ‘earn back’ an annual training payment of around £3,000, so unless you have a huge back office team, it’s hard to recoup anything close to the yearly amount you have sunk into the levy.
3– Apprenticeships stipulate that 20% of an apprentice’s time must be spent in off-the-job training activities such as the teaching of theory, practical training, or time spent writing assessments or assignments. This 20% cannot happen outside paid working hours, which means your apprentice is out of circulation for one day a week – a hefty cost in both business and financial terms, especially if they fulfil a hands-on operational role.
So if you do the maths, you will have realised that, for the time being at least, the levy is an added cost from which it is difficult to extract value in terms of training, and which therefore comes straight off the bottom line, unless incorporated into client contract charges.
There is a real danger that unless the ‘powers that be’ in our industry develop a clear way for us to engage with the scheme, contractors will see it is a tax with no associated benefit. That would be a shame, as training is a critical element of our service, and yet the in-house training we actually deliver – day in, day out – in terms of cleaning skills and people management does not look as if it will ever qualify for any sort of funding.
Published in February issue of Tomorrows Cleaning