Training levy to be cut

Exclusive by John d'Arcy



The Construction Industry Training Board is planning a reduction in levy rates over the next couple of years.

Current levy rates are 0.5% on PAYE payroll and 2.28% on labour-only subcontracting payments. It is proposed that these should be 0.5% and 1.5% respectively next year.

The CITB's forward planning originally envisaged a PAYE rate of 0.65% next year and a labour-only rate of 1.95%. It was intended to move towards a unitary rate of 0.87% by 2003. It now looks as if the unitary rate will be 0.75%.

The proposed levy cuts are subject to talks with the industry. These are scheduled to commence in June.

It is understood that the training board is able to propose the reduced levy rates largely because of its improved financial position. More efficient levy collection is said to have brought in an extra £8m. Non-levy income has brought in an additional £4m and the board has saved £2.5m in administrative costs.

Director of training at the Construction Confederation Keith Aldis said the confederation's training committee was set to approve the revised rates at its meeting this month. He said: "We welcome the fact that the CITB has been able to turn itself around and become a strong and efficient organisation."

The board published its latest medium-term business plan in February. At that time, chief executive Peter Lobban reported that a projected £6.4m deficit for 1999 was forecast to be reversed with the CITB actually showing a surplus of £6m.

Lobban commented: "We are pleased about this better-than-expected financial performance. But it will have to be balanced against the potentially large demands for grants for qualifying the workforce. That balance will be a critical factor in this year's levy consultations."

Lobban warned that the industry faced some "big imponderables" as far as the future of training was concerned. These centred largely on the extent of demands for a fully qualified workforce and the extent to which they were driven by the progress of the clients' charter and cowboy working group initiatives.