CITB caught with its pants down over proposed increase of levy

Sir,

I write concerning the recent article concerning Construction Industry Training Board levy.

I have recently received a letter from Peter Lobban, chief executive of the CITB, which sets out the proposed increases in CITB levy through to 2001. The CITB proposes to achieve a unitary PAYE and LOSC (labour-only subcontractor) rate of 0.86 per cent by the year 2001. This in part is to account for the considerable shift from LOSC status to employed status within the industry in recent times.

The fact is that the CITB has been caught with its pants down by not anticipating the decrease in its income that this shift would cause.

I suspect if the finance directors of most construction companies actually sat down and calculated the net affect on their businesses they would receive a very rude shock indeed! Most CITB registered firms pass on the LOSC levy to these subcontractors.

The net cost to them is therefore the PAYE element of the levy. The PAYE levy is set to triple over the next four years by steady year-on-year increase of over 30 per cent. You don't have to be a mathematical genius to work out the cost to a group such as John Mowlem with a total salary and wages bill of over £200 million.

The CITB claims that it has had "extensive consultation with the federations and associations, and many individual employers."

It would be very interesting if you asked them exactly how extensive this was.

Perhaps a subject for a follow-up article?

D M McDermott

Training Manager

E Thomas Construction

Exeter