Government Assistance to Industry

Memorandum submitted by The Cleaning and Support Services Association

Executive Summary

The CSSA is delighted to have the opportunity to make its submission into the Parliamentary Inquiry on Government Assistance to Industry. The CSSA reviewed the policy goals of the paper entitled A Strategy for Sustainable Growth as well as providing its opinion on how the relationship between businesses and the Department of Business, Innovations and Skills could be improved. At the CSSA we feel that at times BIS has been too often only an advocate of the Government, when it should also do more to be the advocate of businesses to Government. We feel that BIS should make the case for businesses within Government, even if that means challenging other Government departments.

The CSSA also urges that the Government implements the recommendations of the joint BIS and Trade Association Forum initiative called ‘Voices Of British Businesses’ which called for a formal liaison between Government and trade associations, where interested parties can meet regularly and work against agreed agendas. We also feel that this recommendation must go beyond BIS and be implemented with other Government Departments. A positive example already exists between the CSSA and the Health and Safety Executive.

Government policy as set out in the ‘A Strategy for Sustainable Growth’ paper lists various forms of assistance to be provided to specific industries. We were disappointed to find that the Cleaning Industry was not one of those industries earmarked for support. The provision of cleaning ensures that the businesses and other facility users can operate in a clean and safe environment. The recent economic crisis has prompted many clients to compel cleaners to cut back on their services. This presents an unacceptable risk towards public health and safety. The industry has also been at the forefront of developing sustainability as well as enabling sustainability to be realised in other sectors. The industry also provides a route of employment to those individuals where the formal education system has failed them; and as a consequence are long term unemployed. In light of these contributions we would like to see the Government give the industry its due recognition by providing assistance to grow.

The CSSA has also provided its commentary and critique on various Government policies designed to bolster British businesses. While we welcome many of these policies some of them pose issues that need to be clarified. The fact that these policy proposals need further clarification further underscores the need for BIS and other Government departments to develop more formal relationships between themselves and British businesses that would enable both parties to develop a more effective collaboration that would ensure mutually shared objectives are achieved.

Introduction

The Cleaning and Support Services Association (CSSA) is the national trade association that represents the contract cleaning industry. Our organisation’s members encompass 70% of the industry’s turnover. The CSSA is pleased to have the opportunity to air its opinions on the issue of Government support for businesses. We feel that in the current economic climate businesses now more than ever need an effective partnership with Government to help realise our mutual objectives. To that end the CSSA has examined the policy proposals as laid out in the ‘A Strategy For Sustainable Growth’ paper and has also provided its own commentary on the role of the Department of Business, Skills and Innovations (BIS). Contained below is the CSSA position on some of the policy areas with comments, questions and critiques as well as our suggestions on how the relationship between BIS and trade associations could be redressed to the mutual benefit of both Government and Business.

Strategic Investment fund and sustainability

In general the CSSA is concerned that in the Strategic Investment Fund interim report some of the assistance programs were targeted to benefit specific sectors while others are to be applied across various sectors. We are disappointed that the cleaning sector has not been regarded as a sector worthy of receiving special assistance. The Cleaning Industry is worth an estimated £10 billion and employs 450 000 individuals. It contributes health and wellbeing of the nation by ensuring that businesses and other facility users can operate in a clean and safe environment. The industry is also at the forefront of developing sustainability and being an enabler of sustainability for other sectors. The Cleaning Industry is also unique in that it is one of the few industries that provides an avenue for individuals with little or no qualifications and enables the long term unemployed to lessen their reliance on benefits by providing training and qualifications that can be used to develop a career over the long term. We feel that there is a lack of appreciation of the contribution the industry makes to the UK economy. For instance there are special assistance programs to develop wind and tidal technologies in order to develop sources of low carbon energy. While this is a positive endeavour to undertake in the fight against climate change we believe the Government should not overlook the Cleaning Industry and its endeavours to reduce carbon emissions.

For a considerable time the industry has made strides towards daytime cleaning because it would preclude the requirement for electricity to be consumed during the evening hours. In order to make daytime cleaning work cleaning machines would need to be battery operated, in order to eliminate the use of power chords that could present a safety hazard to building users. The batteries powering the machines would be charged by a closed circuit generator that could receive its energy from solar panels. This would represent an effective carbon neutral solution that we feel the government should consider investing in.

In ‘A Strategy for Sustainable Growth’ the Government underlines its commitment to ensure that highly skilled migrants are allowed to settle and work in the UK. We feel that the Government must understand that historically the industry has had a heavy reliance on foreign labour. Therefore if the Government is to undertake action that would potentially shut off the labour supply for cleaning companies then we would like to know what steps the Government would take to ensure the availability of staff.

The role and remit of the Department of Business Skills and Innovations

The CSSA feels that BIS has too often been an advocate of the Government towards businesses when it should also be the advocate of businesses towards Government, even if it means challenging any policy precepts laid out by other government departments. We are concerned that the recent comments made by the Secretary of State for BIS at the recent Liberal Democrat conference were unhelpful towards the business community. The CSSA believes the way forward would be to develop better liaisons with BIS and for the establishment of dedicated staff postings for each sector/industry as they would be better equipped to respond to any enquiries and problems businesses in certain sectors face and to provide dedicated policy support that businesses need. In November 2009 the ‘Voices Of British Businesses’ report was published. It was a joint collaboration between the Trade Association Forum and BIS, which explored ideas of how Government and Trade Associations could achieve a better working relationship. The report contained a series of recommendations on how trade associations and BIS could develop a more effective collaboration in order to achieve mutual interests. Chief among those recommendations was to establish a formal liaison between BIS and various trade associations. The CSSA would like to stress that this type of relationship should be extended across other departments. Already such a relationship exists between the Health and Safety Executive and the CSSA and we feel that it is essential that more departments follow this example as our members activities straddle across various areas of Government. To that effect we have included as part of our written evidence an excerpt of the recommendations sections of the report for the committee to examine (Appendix 3).

The Train to Gain Scheme

The CSSA is concerned about the proposed cuts to the Train to Gain Scheme. As training and skills fall within the remit of BIS, we feel compelled to raise this issue in this enquiry. The CSSA is concerned that substantial cuts will make it difficult for businesses to provide effective training for its personnel which in turn prevent businesses from providing a quality service. It should be noted that the Cleaning Industry plays a pivotal role in not only providing an avenue of employment for the long term unemployed but also imparting training and skills to those individuals that they can use in the long term to seek advancement. The CSSA believes that the Government needs consider likelihood that such cuts could frustrate these aspirations. In addition to the proposed cuts Asset Skills has highlighted some aspects of the apprenticeship schemes that employers in the Facilities Management sector have indicated that need addressing. An excerpt containing a list of issues raised by Asset Skills has been included as part of our written evidence (Appendix 1 & 2).

Appendix 1 – an excerpt of a letter between Asset Skills and John Hayes MP, Minister of State for BIS

Listed below are some of the main issues that Asset Skills’ research has identified as being of concern to employers in its footprint (business services including facilities management (FM) and cleaning, housing, property and parking):

1. Funding needs to reflect better the demographics of the workforce to enable employers to make a step change in raising aspiration and skills. Current funding is focused on the 16–18 age range, understandable given the large numbers not in employment or training. The rigid application of this rule however means that sectors such as cleaning, that require staff to operate machinery, miss out, as they are, by law, restricted to employing those aged over 18. In addition, the nature of facilities management requires employees to have a level of work experience that requires some years to achieve.

2. The inclusion of Functional Skills in the framework for level 2 apprenticeships is at a significantly higher level than previous key skills qualifications and beyond the reach of many in sectors such as cleaning and catering. A number of large employers have indicated to us that this will make apprenticeships difficult to deliver and as a result there will be a negative impact on achievement rates.

3. The lack of flexibility in the apprenticeship framework (known as the ‘Specification of Apprenticeships Standards, England/Wales’) around the level of guided learning and ‘off station’ hours provides a disincentive as it assumes that electricians or others in highly technical roles, have similar working practices to those in more elementary occupations. This is not the case and the current situation discriminates against the latter group while increases bureaucracy and the cost of delivery.

4. The reduction in funding announced for large employers (above 1,000 staff) favours organisations with a large number of staff in a fixed location. In facilities management the opposite scenario is more often the case as they provide support services to companies across the UK delivered by small teams in a wide range of locations. The outcome is often that the numbers employed by individual FM companies in any one area are insufficient to make it economically viable for a provider to create and deliver the programme. See case study 1 in Appendix 2.

The Asset Skills Virtual Academy for Business Services is working collaboratively on behalf of a group of facilities management employers to address the issue by bundling candidates from different employers and brokering the learning to selected providers. This will help to mitigate some of the difficulties caused by small numbers of staff in remote locations but will still not create equality of opportunity between different groups of employers.

5. Employers understand that all pre-assessment activity, including candidate diagnostic work, may no longer be offset against the funding for the programme. These activities are often very time-consuming yet essential to ensure the candidate has the potential to achieve the qualification and that the selected programme is right for the candidate.

Appendix 2 – an excerpt of a letter between Asset Skills and John Hayes MP, Minister of State for BIS

Case study 1

A facilities management company provides services to a national organisation with 250 branches across England. The contract requires the company to provide two employees to each branch and, inevitably, many of the locations are remote in terms of access to training providers. The cost of delivering an NVQ or apprenticeship in these circumstances is significantly increased due to the expense and time of travel for either the provider or the employee, and the lack of opportunity to gain the economies of scale that can be achieved by employers with large numbers in a fixed location such as a supermarket. Time off for learning becomes a greater issue when half of the team on any one site is involved, particularly when sickness or other logistical issues are taken into account.

Case study 2

This case study illustrates the commitment of employers in the facilities management and business services sector to employ and train apprentices. It also illustrates the challenges of trying to attract candidates to an apprenticeship programme where the industry has a mature age profile and the nature of many jobs restricts recruitment of young people. Despite the difficulties, the employers involved and Asset Skills remain committed to the project and efforts to recruit continue.

Jarvis Training Management is the training arm of a major business services employer that has gone into administration. Jarvis Training Management is, however, a profitable organisation that continues to trade and earlier this year it approached Asset Skills for support with a project to deliver Apprenticeships in Cleaning and Support Services at Level 2 in collaboration with other sector employers. The aim of the programme was to deliver large numbers of apprentices aged 16-18 years, in groups of 50, to raise the profile of the new apprenticeship and attract young entrants to a sector that traditionally has a mature workforce. The project received support from the north west regional NES.

The provider, through Asset Skills, invited other employers from the business services sector to take up places on the programme. Responses from employers were positive with eight national companies indicating they would offer places. Jarvis would also take up a number of places within each group. The model of delivery included a 28 week training programme, with Jarvis covering employment and training costs for 16 hours per week. Participating employers would offer apprentices a post equivalent to a minimum of 16 hours per week but with the option of the host employer paying for additional hours if the post allowed. Employers would cover all equipment and supervision costs. Pay rates for candidates were set in line with apprenticeship guidelines and Jarvis also made provision for a completion bonus for each candidate. Employers agreed to offer completing candidates a permanent position on site contract terms on successful completion of the apprenticeship.

Recruitment of candidates began in April and vacancies were posted with local Connexions services and the National Apprenticeship Service. Vacancy locations are national including London, Birmingham, Oldham, Sheffield, Liverpool and Sunderland. Sites are a mixture of private and public sector contracts. Some locations have specific recruitment requirements, such as a need for security clearance and others, particularly some hospital sites looking for people aged 18 and above because of requirements for all posts to operate cleaning equipment. All the potential employers are high quality service providers with the ability to offer permanent positions with good quality benefits and opportunities for career progression. However, to date, the recruitment activity to this project has proved largely unsuccessful and only four candidates have been successfully recruited to the programme.

Neither Connexions nor the National Apprenticeship Service have been able to attract candidates to these apprenticeships despite the prospect that these roles offer genuine job security and career opportunities. Connexions has cited significant challenges in marketing a cleaning apprenticeship to young people. The employers are disappointed in the response but aware that cleaning as a sector does not have an attractive image.

Appendix 3 - Excerpt of the Voices Of British Industry Report

RECOMMENDATIONS

Engagement and Consultation

To formalise an arrangement of regular two-way engagement and consultation between Government bodies and Trade Associations about policy issues, to bring about continuous improvement in building better working relationships and improving policy development, implementation and wider ownership (among businesses) of policy outcomes and mechanisms. To underpin this, both parties to develop an annual agenda that incorporates effective stakeholder engagement and communication through a series of regular joint meetings, working groups and conferences that are regularly reviewed to ensure that practices, outcomes, engagement, and dialogue about emerging issues are well-targeted and focused.

Understanding and Leadership

Government bodies and Trade Associations to forge an effective partnership, using imaginative approaches and tools to bridge mutual gaps in understanding (e.g. poor understanding of sectors by Government bodies; poor understanding of how Government works), with Trade Associations leading on sector thinking, standard setting, building proactive policies (alongside their reactive work), and developing a long-term strategic outlook that incorporates practical solutions and greater transparency. Government bodies and Trade Associations should jointly lead the development of sector and/or issue-based road maps (including shared visions) for the future, including delivery. Government bodies to develop strategy involving sourcing suitably qualified staff, broader use of secondments and fact-finding visits to businesses.

Networking

Government bodies and Trade Associations should work closely together to sponsor the creation of additional 'networks', 'forums', 'alliances' or 'federations' which provide a focus for collaborative work with Government bodies on policy and delivery, and influence EU legislation (particularly that focused on only one sector). Trade Associations in the same sector to work together to provide a consolidated industry view, develop skills, and policy development and delivery, while Government bodies should maintain good liaison with international Trade Associations which represent sectors active in the UK, to complement contact between UK Trade Associations and their EU counterparts to help ensure better outcomes for UK plc.

Joint Projects

Government should as needed maintain working-level contacts with European and international associations, with a view to identifying synergies and opportunities for closer working, and to better understanding policy positions adopted by other countries or groups of countries, while acknowledging too that in some sectors there may be cross-currents between national and multi-national priorities.

23 September 2010