CITB has raised more than £1.75bn in levies from the construction industry over the last decade yet still we are told there is a skills crisis. It begs the question: is this hard-earned money being spent wisely? Our analysis highlights questionable spending at the industry quango and shows the levy and grant scheme consistently works against the interests of small and medium-sized enterprises and favours the major contractors.
CITB is seeking industry consent again to continue with this unfair system. We believe the quango, which dates back to 1964, is well past its sell-by date and needs major reform. That’s why we launched the biggest-ever independent survey of business views on CITB’s levy and grant scheme. We asked our customer base of 2,500 construction SMEs about their experience of the scheme and its effectiveness.
We are democratising the ‘consensus' process and giving a voice to the dynamic owner-managed businesses, the lifeblood of our sector. These are the companies that are subjected to the levy and are expected to stand in line, bowl in hand, in the hope of being handed a grant. Their verdict doesn’t make pretty reading for CITB or the major contractors which do very nicely out of the grant scheme. You can view the findings here
Construction companies overwhelmingly (87 per cent) want to scrap direct funding of CITB, according to our survey. In addition, 80 per cent of companies arrange and pay for training for which they receive no CITB funding, demonstrating the industry delivers skills development without quango support. But 89 per cent are forced to pay the training levy regardless of whether they receive any benefit. No wonder 87 per cent say it’s time to scrap the levy. Further, only one in five firms are members of CITB-approved consensus federations. Which suggests why 92 per cent are happy to be represented by Hudson in levy consultation. Our findings are being independently verified by a leading international market research firm.
Hudson is proposing an alternative model to reduce costs for industry, cut red tape and put more money into government coffers. It will result in a better trained and continually upgrading workforce - employed or self-employed - and improved health and safety. Most importantly, it will help plug the skills gap in the construction industry. Hudson is consulting on the model with its 2,500-strong client base, HM Treasury, HM Revenue and Customs, MPs and a number of trade federations.
- Scrap the 2020 levy bills now with no collection this year at all. This a valuable step to help all SMEs in the sector struggling with cash flow.
- Scrap all levy not yet collected from previous years. If efforts chasing arrears haven’t been effective to date, what chance now?
- Introduce real-time levy collection so it is responsive to economic cycles. Task HMRC with collection as per the apprenticeship levy.
- Change the rate of collection to one much lower single rate for all labour and require all construction firms to pay it.
- Task the Skills and Education Funding Agency with online grant administration via the GOV.UK website and encourage companies, consortia and CITB to apply for training funding.
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