CC chairman predicts end for training levy

Strategic Forum and Construction Confederation chairman James Wates is forecasting that construction’s long-standing statutory training levy could be scrapped altogether.

He said: “I believe CITB will transform from a government quango into ConstructionSkills, responding slickly to the industry’s commercial needs and so well supported by the industry that it is self-funded and we can contemplate abolishing the levy.”

James Wates is deputy chairman of Wates and a member of the CITB board. His prediction comes as Lord Leitch is due to report to the government on the future delivery of all industrial training, including its funding. It supports suspicions in some quarters that the CITB is already planning for an alternative to the levy.

Originally, the levy was virtually the training board’s sole source of funding. It now accounts for just two-thirds of the total income, with the rest coming through government finance and commercial activities. At the same time, fewer and fewer employers are paying the levy as the board struggles to meet current legislative requirements.

CITB chief executive Peter Lobban said: “James’s vision, of an industry that would not need a levy, would indeed be an excellent one to achieve and a good challenge to set ourselves. As the Sector Skills Council for the industry, we intend to play our part.

“Our aim as ConstructionSkills is to move as quickly as possible to finance all our own activities – such as promoting careers in construction, managing apprentices, training specialists, and providing qualifications and certification services – without needing support from the levy. Our target is to pay out 100% of the levy in grants to employers.

“However, James’s vision is a much greater challenge to the industry itself. Currently, only 25% of employers invest in training. The levy-grant system allows those companies that are effectively training on behalf of the whole industry to receive the grants they need to continue to do so. It is in that context that the industry has supported the continuation of the levy for the past 40 years. Such a mechanism for sharing training investment costs would not be needed if 100% of the industry started training its workforce.

“At ConstructionSkills we are pleased to be supporting an increase in the percentage investing in training, but we are still far from forecasting 100%. Until then, it would appear that the industry will continue to need the levy,” said Lobban.

[Contract Journal, 1 November 2006, p 4]