CITB pleads for help to save training levy

Sir Michael Latham, chairman of the Construction Industry Training Board (CITB), has told the government to take “urgent” action to preserve the statutory training levy.

The CITB is hovering on the brink of failing to meet the legal requirement that its levy must be shown to carry the support of more than 50% of those liable to pay.

Under the current system of measuring that support, the levy has the backing of just 50.16% of potential payers. And Latham said that, without action, even this marginal level of support is likely to wither within the next one or two years.

The levy accounts for two-thirds of the board’s total income. It helps fund an annual spend of £100m in training grants.

Board member Maurice Denyer, a leader of the National Federation of Builders, has gone on record as seeing the possible loss of the levy as the “greatest single threat to the future of the organisation”.

The levy’s payroll exclusion level has already been index-linked in a bid to maintain the 50%-plus legal requirement. In theory, the smallest firms are thought to be the least likely to back a levy. But even this index-linking is not expected to maintain the required degree of backing.

Latham told CJ: “The government is taking this seriously.  CITB chief executive Peter Lobban and I met Phil Hope, the minister for training and skills, last week.

“He is calling a meeting involving his department, the CITB, the Engineering Construction Industry Training Board, and
film industry training interests – also looking at a levy – to find an answer.

“There is a threat to the levy. We have met it so far by raising the payroll cut-off level. And it is now index-linked. We are prepared to go on raising it. But this brings difficulties with smaller firms in the federations. We are looking for a long-term
solution. I have suggested that there might be a Parliamentary regulatory reform order rather than amending legislation, which would take time.”

Latham said the wording of current legislation dictates that support for the levy should be measured through the trade
federations. But the structure of the industry has changed since that legislation was introduced in 1982. Many of the smallest
firms are now less likely to join federations.

One proposal has been to drastically increase the exclusion level to exclude firms with a payroll of less than £150,000 per annum. This is unlikely to be accepted by the many smaller contractors already arguing that every firm should pay the levy, as  excluding the smallest creates unfair competition.

The CITB case is aided by a broad survey of 1,500 employers – both employer federation members and non-members – which indicated nearly 75% in favour of retaining the levy.

Alan Ritchie, UCATT general secretary, commented: “The CITB and the levy are very important to the industry. We need that central funding. What is the alternative to a levy? This has opened up a debate with the government.”