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Don’t let the levy break

The FM sector has a lot to gain from the Apprenticeship Levy, but a troubled first year hasn’t given the industry confidence it will achieve its ambitious aspirations. It’s not too late though, and a series of simple changes would deliver the right results, says Linda Hausmanis, Chief Executive Officer at the British Institute of Facilities Management (BIFM)

Investing in education sits at the heart of any economy, and ensuring there’s a diverse mix of training and learning opportunities benefits us all. Apprenticeships are a vital part of the education mix, so the Government’s 2016 launch of the Apprenticeship Levy was – at the time – to be applauded. It not only recognised the importance of training at work, it understood that investing in training – and workplace training in particular – was vital in addressing one of the economy’s biggest modern challenges – productivity.

The Government hopes the levy will fund three million new apprenticeships by 2020 by raising £2.5 billion that can be invested back into new training schemes. Not everyone pays the levy, only businesses with a wage bill of more than £3 million a year will pay – although almost all companies are being asked to take a more proactive stance on education, with SME firms that employ between 50 and 200 people being asked to cover some apprenticeship costs and release apprentices for training on a weekly basis.

The levy is a good idea, but it’s implementation has been flawed. Rather than unlocking the funding and investment we need in the UK, it’s holding back the establishment of new apprenticeship standards and potentially exacerbating the skills gap even further. BIFM has been closely involved in the development of FM apprenticeships, so we want to see changes to the levy soon so we can make sure we’re able to continue to attract, train and retain FM practitioners.

While it’s far too early to write off the levy – and any big reform will have its challenges, we believe there are a series of changes the Department for Education and the Institute for Apprenticeship (IFA) can make to the way the levy is being used to support the FM sector.

One of these changes is fundamental; engage the FM sector more fully in decisions being made about FM apprenticeships and the allocation of funding. As a sector, we’re a major player in the UK economy – worth around £120 billion a year and we contribute around seven per cent to the UK’s GDP. Not only that, we employ millions of people across the country in an incredibly diverse range of roles – very few industries offer the scope and scale the FM sector does.

But when it comes to decisions being made about FM apprenticeships, the sector faces some significant challenges. For example, while the development of new apprenticeships is meant to be employer-driven, final decisions about the need for new FM apprenticeships sits with IFA’s construction panel – on which no FM representative currently sits.

This is a crucial failing. It means that the body responsible for making decisions about the assessment of FM apprenticeships, FM standards and training options is doing so without sufficient understanding of the sector and what BIFM members want to achieve. This not only slows down the decision-making process and risks holding back skills development, it has the potential to put employers off wanting to engage with the levy at all – viewing it instead as a tax, not as a method of supporting workforce development.

However, these challenges aren’t insurmountable, and we believe there are some pragmatic steps that can be taken now to improve the system. The first is that the IFA must appoint an FM expert to the construction panel. This is something BIFM has campaigned for on behalf of members since the launch of the levy and would have an immediate impact on the panel’s ability to understand and approve new courses. The new appointee would also be better placed to advise the IFA and the Department for Education on the importance of FM apprenticeships and qualifications that sit apart from more generic management and technical schemes – an issue we face under the current system.

We also want to see greater transparency over the approval, rejection and funding of proposed courses. As it stands, decisions from the IFA can seem arbitrary. For example, in one recent case a Level 2 hairdressing apprenticeship was allocated £9,000 in funding but a Level 3 FM Supervisor apprenticeship was only awarded £4,000. This isn’t a lone example either, and two other FM apprenticeships have also recently received insufficient funding band allocations. While we recognise skills will vary from sector to sector, there has been little clarity on why the funding differed.

If cost is a driving factor, this could lead to a race to the bottom as employers look to negotiate the cheapest possible training provision with providers. This could harm the quality of training and further exacerbate the skills gap, undermining the aims of the levy. What we want to see from government to address this issue is a focus on evidence-based decision making when it comes to the allocation of funding – as well as more transparency on why a course might be approved or rejected by the IFA.

Another step would be to provide greater clarity to the way the success of the levy is being measured. Getting three million new apprenticeships underway by 2020 is an admirable target, but the number of starts alone won’t mean it’s been a success. 

Instead, what BIFM and our membership want to see is more meaningful measurement that considers the impact the levy has had on improving workplace performance, increasing social mobility and addressing skills gaps. These needn’t be complex metrics, but the current system is simply too focused on a
single target.

Simple changes to the levy could make a huge difference to the FM industry, but it’s important we recognise it’ll only ever be part of the solution if the focus remains on apprenticeships alone. BIFM has always championed the crucial role that life-long learning must play in addressing the skills gap and improving productivity, particularly in growing areas such as automation and AI. By adapting the levy rules to allow employers to use funds to meet non-apprenticeship training too, it could benefit and upskill a much greater number of people and businesses. Perhaps called the ‘Skills Levy’, it’s an opportunity we believe the Government needs to think carefully about.

The levy is still young, but some creative thinking and adjustments could turn a difficult first year into a long-term success story that goes a long way to boosting skills and delivering the results it should have achieved from the start.

For more information on the British Institute of Facilities Management (BIFM), go to www.bifm.org.uk

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