UK: With the CITB proposing to reduce its training levy, contractors’ group BESA has challenged the need for a levy and demanded to know what employers receive for their investment.
On Monday, the beleaguered Construction Industry Training Board (CITB) announced proposals to cut its employer’s payroll levy from 0.5% to 0.35% from April 2018.
The existence of the training provider has been under threat since the government announced its plans for a new levy under its Trailblazer apprenticeship scheme. At the end of last year the CITB announced that it was withdrawing a wide range of training and certification schemes, including its F-gas categories J11 to J14.
Describing the CITB levy reduction as the “best option”, CITB CEO Sarah Beale said that it would ensure that all employers were treated equally.
“It will provide the funding required to deliver the support that industry needs, is simple to administer, and is straightforward for levy payers,” she said.
The Building Engineering Services Association (BESA) has questioned the need for this levy and admitted that while the reduction in charges would be welcomed by firms, some of these same companies would now be paying twice.
“The big question for employers is whether there should be a CITB levy at all,” said BESA training director Tony Howard. “The CITB has not been able to spend all the money it raises through the levy for years and cannot get funding to more than 9% of SME’s.
“Every so often it needs to reduce the embarrassing amount of money it has sitting in the bank, so it builds websites and does roadshows trying to engage SME’s in obtaining grants from a system they don’t understand,” he claimed.
Mr Howard also claimed that the one third cut was a “gimme” as the organisation could afford to reduce its income by that amount without any impact on its current level of activities.
“Many employers would say it is not necessarily the amount of levy that is being raised from them that is the problem, but the effectiveness of the support derived from it,” he said. “I think the time is right for the CITB to explain how it will give employers a real tangible return on their investment through the levy that is innovative, clear, concise and easy to access.”
He added that the principle of a training levy remained sound as it levelled the playing field for all employers and ensured that vital training did take place – pointing out that many training levies in different parts of the world were very successful. However, the pressing need for targeted funding for apprenticeships in key industry sectors gave the apprenticeship levy a clear mandate.
“The future relevance of the CITB is less clear,” said Howard. “Later this year, all employers will get the chance to exercise their democratic right and vote on the future of the CITB Levy,” he said. “As we now have an Apprenticeship Levy, the obvious question is whether there should be two funding streams.”
To renew its Levy Order from the government, the CITB must demonstrate there is industry consensus for it to continue. Employers will, therefore, be asked to vote on the issue between August and September, with a Government decision expected by February 2018 and the new (Apprenticeship) Levy coming into effect in April.
The CITB has also set up an employer-led levy working party to look at how the CITB levy could work alongside the government’s apprenticeship levy from 2018.
“However, companies with a payroll over £3m and who are in scope of the CITB will have to pay both levies for a year,” says BESA.
Under the body’s temporary ‘Transition Package’ these firms will be able to claim CITB funding “at an enhanced rate, capped at their level of apprenticeship levy contribution”, according to the training body’s website.