The government has launched a full consultation on the introduction and implementation of a new proposed apprenticeship levy to be paid by “every big company” in England, with a specific section on the future of the existing construction and engineering levies.
The consultation proposal foresees the possibility that the existing CITB industry levy could run alongside the new apprenticeship levy, but says that “if this were to happen, we would expect companies in the industry to fund their apprenticeships using the [new] apprenticeship levy”.
It then adds: “Another option is to potentially remove the statutory industry levy arrangements completely, so that employers only pay the apprenticeship levy. This would represent a significant change to training arrangements in the construction and engineering industries and we would need to understand what effects this would have on the skills and capabilities of the UK construction industry.”
The consultation document adds that the CITB and Engineering Construction Indsutry Training Board “will consult with employers before the introduction of the apprenticeship levy on whether they should continue to pay the industry levy”.
The apprenticeship levy, set to be implemented from 2017, is designed to increase investment in training and forms part of the government’s pledge to support 3 million apprenticeships by 2020.
The consultation will determine the scope of the levy, including what size of company will be impacted by it.
Under the government’s proposed approach, employers required to put funds into the apprenticeship levy will have direct control over how the funds are spent.
"The recently announced levy on business… gives the industry an ideal opportunity to review the continued effectiveness of the CITB levy and whether it is delivering both in terms of apprentice numbers and value for money."
Eddie Tuttle, CIOB
The announcement of the government levy, by chancellor George Osborne in this year’s summer Budget, has led to speculation within the industry over the future of the CITB levy.
Eddie Tuttle, CIOB senior policy and public affairs manager, told Construction Manager: “The recently announced levy on business … gives the industry an ideal opportunity to review the continued effectiveness of the CITB levy and whether it is delivering both in terms of apprentice numbers and value for money. Indeed, evidence and comparators with other sectors would suggest that the industry is still struggling to meet the skills needed now and for the future.
“The onus of recent announcements on the future of the Construction Leadership Council and the [demise of the] chief construction adviser role challenge the industry and its main contractors to lead and develop solutions that future proof the industry. Skills are a key aspect of ensuring we have the right workforce not least as innovations driven by digital built Britain come to the fore.
“Whether the CITB levy remains the right vehicle to meet the industry and the country’s requirements is a fair question at this juncture that needs to be answered. This question needs to be part of the solution that government is asking the industry to drive and CIOB is keen to play its part as the work develops.”
At the same time, the Department for Business, Innovation and Skills (BIS) has also announced a new requirement to take a company’s apprenticeship offer into account when awarding government contracts over £10m in value.
Along with the levy consultation, BIS also announced measures to encourage apprenticeships including a requirement to take a company’s apprenticeship offer into account when awarding large government contracts.
From 1 September 2015, companies bidding for government contracts worth more than £10m – awarded by central government departments, their executive agencies and non-departmental public bodies – will be expected to demonstrate that they have a “reasonable proportion” of their workforce in an apprenticeship or formal training programme.
Successful bidders will then have agreed apprenticeship numbers written into a contract schedule.
Nick Boles, skills minister, said: “Skilled people are the lifeblood of a strong economy but for too long UK businesses have invested too little in developing their employees’ skills to meet the demands of a competitive, global market. The apprenticeship levy will ensure that businesses invest in skills and training, and will act as a much needed shot in the arm for the country’s productivity.”