The Construction Industry Training Board (CITB) board has decided, following an preliminary industry consultation in March, to keep levy rates the same for 2022-25 as they were for 2018-20. The one-off 50% discount for 2021, introduced as a concession to Covid-19 difficulties, comes to an end.
The final proposals are that the levy is assessed at the pre-pandemic rates of:
- PAYE at 0.35%
- Net paid (taxable) CIS subcontractors at 1.25%.
Approximately 40,000 employers with a wage bill below £120,000 will continue to be exempt, with 14,000 seeing a 50% reduction due to having a wage bill of between £120,000 and £400,000. It is anticipated that due to the pandemic, and lower wage bills, more construction businesses could qualify for exemptions and levy reductions.
The wider construction industry now gets its say on the proposals, with the official consensus consultation taking place from 14th June to 15th August.
The question to be answered is simply: Do you agree that the levy proposals are necessary to encourage adequate training in the construction industry?
Under the legislation that gives the CITB power to collect a levy from all companies that are in scope, it has to demonstrate industry support once every three years. This is known as the consensus process. Without industry consensus, CITB has now power to raise the levy, which it then redistributes across the construction industry on training programmes for the greater good. That’s the theory, and while the CITB has always been a lightning rod of controversy, it has always retained broad industry support. (Bit like the BBC really…) In 2017, the last time the consensus process was undertaken, there was agreement to the levy proposals from 76.9% of construction industry respondents, according to CITB’s methodology.
CITB director of strategy and policy Steve Radley said: “To support employers, levy bills were cut by half for 2021, with the consensus process delayed by a year to focus on supporting immediate skills needs.”
The consensus process was initially due to take place in 2020 but it was postponed due to the logistical constraints presented by the Covid-19 pandemic.
“We have since had clear feedback from industry, including the 14 prescribed organisations, that CITB should proceed with consensus this year,” Steve Radley said. “We now expect significant growth in construction output and its skill needs over the next three years. We have recently agreed a plan to help meet these needs and we are now asking industry whether it supports the levy proposals to finance it.”
Of 33,000 levy-paying employers, around 7,000 have declared they are represented by prescribed organisations (the major trade associations), so their views will be gathered through their organisation. Of the remaining 26,000 employers, a representative sample of 4,000 will be surveyed by telephone by IFF research, an independent research company.
The results of the 2021 summer consultation will be published in the autumn.