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Wed September 22 2021

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Construction votes YES for CITB levy renewal

8 Sep Construction employers have backed the Construction Industry Training Board’s levy proposals for another three years.

CITB's new chief executive Tim Balcon can breathe a sigh of relief
CITB's new chief executive Tim Balcon can breathe a sigh of relief

Industry support for the mandatory training levy has fallen from 77% of employers four years ago to 66% today.

The provisional result has been handed to the government, which will make the final decision on the issue of a new three-year levy order to support construction training across England, Scotland and Wales. If approved (and it is assumed that it will be), it will be issued for April 2022 until March 2025

This will see the levy continue at 0.35% for PAYE and 1.25% for net paid (taxable) CIS subcontractors.  

Overall, 66% of levy-paying employers agreed to the proposals – or 63% if measured by the total amount of levy they pay. The consensus process – the official consultation that CITB is required by law to undertake every three years – received submissions from the 14 prescribed organisations (trade bodies representing employers across the industry) and an independent survey of 4,000 employers who were not members of any of these organisations. Eleven of the 14 prescribed organisations supported the levy proposals; three dissented.

The organisations opposed to continuation of the mandatory levy were the Finishes & Interiors Sector (FIS), Hire Association Europe (HAE) and the Home Builders Federation (HBF).

It was supported by: Build UK, British Woodworking Federation (BWF), Civil Engineering Contractors Association (CECA), Construction Plant-hire Association (CPA), Federation of Master Builders (FMB), National Association of Shopfitters and Interior Contractors (NAS), National Federation of Builders (NFB), National Federation of Demolition Contractors (NFDC), Scottish Building Federation (SBF)

Scottish Decorators Federation (SDF) and the Scottish Plant Owners Association (SPOA).

Level of support for the levy was lower than last time the industry was asked, in 2017. That time, 76.9% of employers across Great Britain supported the levy, representing 69.7% of the total value of levy paid in.

In 2017 more than two thirds of Scottish Building Federation members voted against CITB’s proposition and 89% of Scottish Decorators’ Federation members rejected it. This time, both organisations voted in favour.

In contrast, Hire Association Europe was in favour last time but has now moved against the levy.

The triennial consensus process was supposed to have taken place in 2020 but was deferred a year due the Covid-19 pandemic.

Apprenticeships minister Gillian Keegan said: "My thanks go out to both the staff at the CITB for facilitating a complex process and to the employers, other members and reps for your active participation. This last 18 months have been unusually challenging for the construction sector and that is why the CITB decided to delay the consensus process from 2020 to 2021. I recognise that Covid-19, one of the key factors for the postponement, has not gone away. Therefore the sector’s willingness to engage with the CITB is even more valuable. 

Apprenticeships minister Gillian Keegan will make the final decision
Apprenticeships minister Gillian Keegan will make the final decision

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“The next step in the process to progress the levy proposals towards a levy order now rests with me, before doing so I will be considering the proposals in detail."

CITB chair Peter Lauener said: “Construction has been through a tremendously difficult couple of years. CITB moved quickly to support employers by freezing levy collection last year, cutting bills by half this year, and putting the right support in place.

“We will carry on with delivering our current plans and get started with shaping our future ones. I want to thank everyone who participated in the consensus process this year – your input is invaluable and will help shape CITB’s support for you in future.”

Chief executive Sarah Beale, who leaves the organisation this month, said: “At an extremely tough time, construction employers have demonstrated that they still believe that the Levy and grant system is critical in addressing the industry’s skill needs and their support for the levy proposals. In developing our future plans, we will listen hard to what employers told us in how we can ensure that the levy works for them and provides support that is relevant, easy to understand and accessible.” 

Tim Balcon, the new CITB chief executive, said: “It’s good that so much of what employers are asking for is already in the business plan, so we need to make support easier to access and understand and to keep the sector better informed. CITB is committed to maximising the value of the Levy for employers, providing practical and financial support for everyday training needs as well as tackling long-term skills needs.” 

Although the Federation of Master Builders supported the levy renewal, its remains critical of aspects of the CITB’s performance. FMB chief executive Brian Berry said: “The FMB is passionate about supporting its members to attract new people into the industry, from all backgrounds, and train existing workers in the skills they will need for the future. It recognises the role of the CITB as a co-ordinating body to help the industry deliver on its skills needs, and while I welcome the consensus outcome, my members expect better results from their training body.

“It is concerning that the perception of CITB’s performance and value of the levy is poorest amongst the smallest firms. I welcome the CITB’s commitment to work with the FMB to address, our fundamental worries about the way CITB communicates; making access to CITB support easier and more transparent for micro firms; bringing greater benefits to small employers; and ensuring fairness of process so that everyone who should pay the levy does so.”

Build UK made similar comments last month, when it revealed its support for levy renewal. "The level of support during this consensus process was significantly lower than in previous years, and there remains widespread frustration with the performance of CITB,” it said. “Build UK is clear that construction needs an industry training board that is fit for purpose, responsive and effective at delivering the services and support required to meet the industry’s skills needs, and that members are not prepared to wait another three years to see fundamental changes in CITB’s delivery in order to fulfil this role.”

The National Federation of Builders is also pressing for change.

NFB chief executive Richard Beresford said: “Our members voted by 56% to support the levy proposals and as such indicated their support for a cross-industry approach to skills and training delivery. What they did not do is give CITB a blank cheque to continue on the path that they have been following since the last consensus result. By CITB’s own KPIs [key performance indicators], employers’ confidence in CITB has diminished year-on-year, available talent and labour supply has worsened and the access to training continued to deteriorate. On the key measures, CITB is failing our industry.

“CITB repeatedly said that the consensus process was not a vote on CITB’s future, and they were right, this does not constitute a vote of confidence. The construction industry has reaffirmed its commitment to a collective approach to tackling these issues, but now we must focus on how that happens – not whether it happens. We’ll be coming forward with proposals on this in the near future but in the meantime we must all continue to hold CITB to account, we cannot have another three years like the last.”

NFB represents 1,400 building companies across England and Wales with turnover ranging from below £500,000 to £1.1bn. Collectively, its member companies have 21,000 employees and turned over £6.6bn last year.

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