Double Bubble for Construction Industry Training?

Double Bubble for Construction Industry Training?

05th October 2015

Businesses in the construction industry have been paying into the Construction Industry Training Board (CITB) for the past 50 years or so. The CITB is the industry training organisation for the construction industry, it's a non-departmental public body of the Department for Business, Innovation and Skills (BIS).

At present there are big changes on the way on how the CITB funds training - traditionally the CITB have been given powers to collect annual levy payments and use the money to provide training grants and other services that support the UK construction industry. Construction industry businesses and employers can register with CITB and gain access to funding and support services for skills and training.

However, the current government has been consulting on a proposed apprenticeship levy since August of this year and has encouraged training organisations, industry bodies and employers to come forward and share their views on how to pay the levy, how it could work for nationwide employers and the best way to give employers control of apprenticeships. If you missed the opportunity to have your say, then don't blame yourself - news on this subject has been sketchy to say the least.

The government has committed to create three million new apprenticeships over the coming five years and has introduced initiatives to help with this, including the abolition of employer National Insurance (NI) contributions for apprentices under the age of 25. The new proposals are likely to result in the addition of the apprenticeship levy which means that construction firms will be expected to pay two levies in the future - the original CITB training levy and the apprenticeship levy.

However, in many ways, the construction sector is quite different from other industries here in the UK. Nearly half of the sector's apprenticeships are delivered by firms employing nine people or fewer. The government has not yet made it clear as to how it defines a large employer (usually 250 employees or more).

Only a minority of construction firms have expressed an opinion on whether or not they are prepared to pay two levies at full rate. The two levies differ quite radically. The government's levy will fund the costs of training apprentices in large firms while CITB covers all other costs of an apprenticeship and supports companies of all sizes and the full range of training that the industry carries out.

With both levies relating to apprenticeships, many companies will not be happy to pay two levies that provide virtually the same thing. Once the larger companies realise that under the new system they will need to meet the full cost of training an apprentice take up figures are likely to drop significantly.

Employers will also need to be confident that they can see that what they pay out will be ring-fenced to support the necessary training. This will involve a level of transparency that is not expected from government bodies. After all, any money paid into the apprenticeship levy (as with the CITB levy) is money that belongs to the industry and the industry should have a say in deciding how the funds are spent.

Interesting times ahead for the construction industry, we think. We'll keep you posted on any further developments to this story.