Research shows the CITB is increasingly irrelevant to an industry striving for growth

Hudson Contract today released independent polling data demonstrating the minimal impact of the CITB despite its collecting almost £200m in levy from the sector. [1]

Hudson, with support from the Association of Independent Professionals and the Self Employed (IPSE), and the Federation of Master Builders (FMB), commissioned YouGov, a leading expert on opinion research, to study the views of SMEs in the sector.  SMEs pay twice as much levy as larger firms in the sector yet have less power to influence the CITB.

The research shows that the CITB has little or no impact on its primary mission of encouraging the provision of training, since the overwhelming majority of SMEs are funding and providing training themselves with little or no CITB grant funding. Topline results from the research show:

• Most levy payers (60%) provide training without CITB grant funding.
• Only 9% of respondents say they receive CITB funding for training employees, and of that 9%, only half receive the full cost of training.
• Only 35% knew that the CITB collects the levy and distributes grants. Even among levy payers specifically, only two thirds were aware of this.

The CITB was one of about 30 boards created in 1962 to correct a perceived market failure in training.  Only three such boards survive today.  The CITB now justifies its continued role by convincing Government that it is needed to tackle the perceived skills shortage in construction. The CITB has projected the range and scale of the skills shortage under the banner of 'Construction Skills Network', although records show that its forecasts are inaccurate and unreliable.Given the large number of businesses that fund training on their own account, the results underscore questions about the CITB’s ability to show that it provides any incentives to train beyond what the market drives.

Further results from the research show that:

• More than half of the firms interviewed have either no knowledge or no opinion of the CITB levy’s effectiveness in ensuring training and skills development.  
• 71% say the possibility of a CITB grant to cover training does not influence decisions to send workers on a training course; and a mere 2% say a CITB grant is the main reason for training.
• 38% of firms would continue training even without the possibility of a levy grant.

Ian Anfield, Managing Director of Hudson Contract said:

“Despite spending millions on websites, roadshows and PR, the CITB’s influence on training provision is negligible. In reality, the CITB is a hapless bystander while SMEs get on with the day job. More and more stakeholders are questioning whether there is a need for a levy and grant system at all.  This needs an answer.”  

In 2015, the then-Secretary of State for Business, Sajid Javid, granted a three year extension to the CITB’s levy raising powers on the basis that he was satisfied that the new order had industry support.  This purported indication of support was derived from a consensus process through which the CITB consulted specifically designated trade bodies, known as Consensus Federations, who then offer their support on behalf of their members.  Yet of the approximately 70,000 registered levy payers, only an estimated 14-17% are members of a consensus federation, based on the CITB’s own figures.  Asked whether they were aware for the consent process, 10% of respondents said that they were aware; 75% said they were not and 16% who did not know.  When asked specifically if they supported the CITB’s levy-raising powers, only 17% of respondents said yes.

The CITB’s own accounts show that large businesses receive a 92% return on their levy payment, whereas small and micro sized businesses receive 61% and 52% respectively.  Of those who say that they find it difficult to claim back grants, 55% say that the reason for this is that they do not have an administrator to support them, while 50% say the process is too complicated.  Anecdotally, many of Hudson’s SME clients have identified the bureaucracy associated with the CITB grants as a barrier to accessing grants, whereas large firms are able to employ administrators whose sole role is to wade through the red tape.

Anfield added, “Training is absolutely vital if the construction industry is to thrive and deliver our country’s much needed infrastructure and house building programmes.  As the backbone of the industry, SMEs play a crucial role in this.  Yet not only is the CITB offering scant support to SMEs, it is actually putting obstacles in their way by collecting a levy and passing most of it on to major contractors. Those with the narrowest shoulders bear the toughest burden. That is bad for business and bad for the industry.” 

A full copy of the research can be found here

A copy of the original Hudson Contract research can be found here

[1] CITB ANNUAL REPORT AND ACCOUNTS 2015, P73