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Call to switch training levy
00:00 09 Sep 1998
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by John d'Arcy
Specialist building and civil engineering contractors are pressing for the construction training levy to be switched to one based on the use of materials rather than on payroll.
"I know a levy on materials could be regarded as a form of tax," said Grenville Weltch, director of the National Specialist Contractors Council. "And it is not related directly to training. But our members feel very strongly that it would be much fairer. It would mean that everybody would pay. Everyone would contribute to training. You would certainly catch the cowboys."
Members of the council of the NSCC will be meeting Peter Lobban, chief executive of the Construction Industry Training Board (CITB), this month to discuss the future shape and size of the training levy.
A CITB working party has been reviewing alternative forms of levy. These include a levy on materials, one based on contract price, and a return to the per capita differential levy for various trades. The working party is set to submit a final report by the end of this year.
In the meantime, however, Lobban has already warned that a substantial short-term increase in the current levy rates is inevitable if investment in training is to be maintained.
Training board members have been told, at the present levy rates, the CITB faces a £14 million shortfall in its levy income in 1999. This is attributed to the move back to direct employment. The swing to PAYE is put at 32 per cent this year, rising to 42 per cent in 1999.
Lobban advised the board's July meeting that there were three main options to meet the anticipated levy shortfall.
The most likely option is to more than double the current PAYE rate from 0.29 per cent of payroll to 0.63 per cent, with the labour-only rate remaining the same.
In renewing the CITB's statutory remit, the Government has expressed a preference for a levy related to employment. It has equally said it does not wish to see any increase in the labour-only levy rate.
Grenville Weltch conceded that the Government's view meant that the specialist firms faced an uphill battle to secure a fundamental change in the levy system. He added that any change was likely to take some three years to complete.
Specialist building and civil engineering contractors are pressing for the construction training levy to be switched to one based on the use of materials rather than on payroll.
"I know a levy on materials could be regarded as a form of tax," said Grenville Weltch, director of the National Specialist Contractors Council. "And it is not related directly to training. But our members feel very strongly that it would be much fairer. It would mean that everybody would pay. Everyone would contribute to training. You would certainly catch the cowboys."
Members of the council of the NSCC will be meeting Peter Lobban, chief executive of the Construction Industry Training Board (CITB), this month to discuss the future shape and size of the training levy.
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A CITB working party has been reviewing alternative forms of levy. These include a levy on materials, one based on contract price, and a return to the per capita differential levy for various trades. The working party is set to submit a final report by the end of this year.
In the meantime, however, Lobban has already warned that a substantial short-term increase in the current levy rates is inevitable if investment in training is to be maintained.
Training board members have been told, at the present levy rates, the CITB faces a £14 million shortfall in its levy income in 1999. This is attributed to the move back to direct employment. The swing to PAYE is put at 32 per cent this year, rising to 42 per cent in 1999.
Lobban advised the board's July meeting that there were three main options to meet the anticipated levy shortfall.
The most likely option is to more than double the current PAYE rate from 0.29 per cent of payroll to 0.63 per cent, with the labour-only rate remaining the same.
In renewing the CITB's statutory remit, the Government has expressed a preference for a levy related to employment. It has equally said it does not wish to see any increase in the labour-only levy rate.
Grenville Weltch conceded that the Government's view meant that the specialist firms faced an uphill battle to secure a fundamental change in the levy system. He added that any change was likely to take some three years to complete.
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