CITB cash crisis divides employers

by John d'Arcy



Contractors are split down the middle over rescue plans designed to avert a looming financial crisis at the Construction Industry Training Board which threatens to see the Board's income slashed by up to £14 million.

A CITB board meeting last week agreed that there are two viable options for heading off the crisis. But a vote among the employers present produced six in favour of one solution and six for the other.

A meeting of the Construction Conferation council this week is now expected to prove decisive.

The training board's broad plan is to move from the present two-tier levy of 0.29 per cent on PAYE payroll and 2.28 per cent on labour-only subcontract payments to a unitary rate of 0.87 per cent. The alternative options for achieving this are:

l Calculating an individual single rate for each employer this year and gradually moving these to a common single rate by 2002;

l Gradually reducing the differential between the two current rates and again producing a single rate from 2002.

CITB chairman Hugh Try is arguing strongly in favour of the second option. This would increase the PAYE rate to 0.38 per cent of payroll next year with the labour-only rate remaining unchanged in 1999.

The financial problems have arisen because of the size and speed of the industry's switch back to direct employment.

The board had become heavily dependent on the labour-only levy for the major proportion of its income. Without action its levy income would have been cut by about a quarter.

Final levy proposals will be submitted to the Government in mid-October. Whatever action is taken, Try has emphasised that there are bound to be both winners and losers.