Changes on the Way for the Construction Industry Training Board

Changes on the Way for the Construction Industry Training Board

23rd January 2017

In October of last year we brought you some news on the changes that were on the way to how the Construction Industry Training Board (CITB) funds training here in the UK.  Charged with the power to collect annual levy payments and use the funds to provide training grants and services that support the UK construction industry, the CITB is a non-departmental public body of the Department of Business, Innovation and Skills (BIS).  The government held consultations with employers, industry bodies and training organisations on how to pay the levy and the best way of giving employers control of apprenticeships.  However, when the government committed to create three million new apprenticeships in the coming five years, initiatives were introduced to enable this with the addition of a new government apprenticeship levy, leaving construction companies expected to pay two levies! 

This has resulted in a plan to vote later this year as to whether the industry wants to CITB to continue raising the levy and the building engineering services body, BESA, is now questioning the relevance of the CITB and whether there should be a levy at all.

It seems that the CITB has been unable to spend all the money raised via the levy and is now facing a wave of criticism within the industry.  In response, the CITB has proposed to reduce the training levy next year in a bid to survive these challenging times.  With an offer to reduce its bill from 0.5% to 0.35% of an employer’s payroll, the CITB is hoping to avoid closure.  Many of the employers expected to pay the levy are SMEs that find it difficult to obtain grants from a system that they just don’t understand.  In recent years, the CITB has scrambled to address this situation, staging expensive roadshows in an attempt to engage these SMEs and prove its worth to the construction industry here in the UK.

Furthermore, the CITB levy system has been improved with some changes due to take effect from spring 2017 as a response to feedback received from construction employers.  While most employers are unlikely to see a huge difference in the payments due, 28% of companies are likely to pay less, while a mere 16% may need to pay more in future.  The CITB has set a levy rate that it believes will be affordable fo4r employers while ensuring that it has sufficient income to continue to provide grants to support training. 

The new system should also eliminate any ambiguity around whether subcontractors worked as labour-only (LOSC) or as labour and materials (supply and fix).  The new system enables subcontractors to be categorised by whether they are paid after deducting CIS tax (paid net) or before the tax is deducted (paid gross).

However, with the future survival of the CITB in the balance, these changes may just prove irrelevant and the British construction industry may soon see the demise of the body which has underpinned construction training here in the UK for the past fifty years.