27th January 2017 Journal Column

By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

Last year the Construction Industry Training Board (CITB) and the Department for Business, Innovation and Skills announced that firms with a payroll over £3m would need to pay both the CITB levy and the government’s new all-industry apprenticeship levy, which will come into effect from April. It’s fair to say the news did not go down well with the 900 large firms it’s set to impact.

But it seems our complaints have already been heard, as the CITB have just unveiled plans to cut its levy by almost a third. The training body is proposing cutting the levy paid by employers from 0.5per cent of total wage bills to 0.35 per cent and reforming the way it delivers training grants to provide better value for money.

It’s no surprise that the CITB are trying to get the larger firms back on their side, with the organisation set to face a fight for survival later in the year. The statutory levy is up for renewal in autumn, and firms, both big and small will be voting on whether to continue it. So, for them, the more firms on their side, the better. But with the double levy coming into effect this April, and the cut in the levy not starting until 2018, chances are most firms still won’t be their biggest supporters come autumn.

There are a lot of things up in the air this year, the majority being an impact of the Brexit result. The government is considering imposing a £1,000-a-year levy (yes, another levy!) on each skilled European Union worker hired by British companies. The decision would have a huge impact on the industry, an industry already so strained by a skills shortage. It’s estimated that nearly 12 per cent of the UK’s 2.1 million construction workers come from abroad, the majority of those coming from the EU. In an industry that is already struggling for workers and dealing with two apprenticeship levies, it makes no sense to add another skills levy on top, especially one that will impact so many workers and companies!

The housing minister said the levy on EU workers will help the British economy and British workers who feel they are overlooked when applying for new jobs, but what about the workers that we already have, those that have committed years of their lives to our industry? A cost of £1,000 per worker, per year is a massive hit to companies that employ a high percentage of EU workers, it puts jobs and companies at risk and the last thing we need is more companies going bust.

But nothing is set in stone yet, so I guess for now we sit back and wait for the levies to come into place. The government and the CITB seem confident it’s the right move for the industry but only time will tell.

CENE are holding an event on Apprenticeships, new Degree Apprenticeships, levies and how to gain funds towards a training grant at Northumbria University on 14 February. For more information or to register your interest, please contact Leanne on 0191 500 7880 or leanne@cene.org.uk.