Latest CITB levy hike ignites industry backlash

CITB is gearing up for renewed levy-raising powers with plans to go for consensus next year, when it will no doubt claim it has industry support for its proposals.

The training quango plans to introduce a new one per cent levy on labour providers, potentially resulting in huge six-figure levy increases for many medium-sized firms, hundreds of small and micro firms being brought into the levy for the first time, and even million pound-plus bills for some of our larger clients.

This levy would apply to firms which use ‘labour providers’ such as Hudson Contract and other payroll companies, agencies, commercial contractors and potentially labour-only contractors. 

The move comes despite CITB’s latest annual report and accounts showing the board was sitting on a surplus cash pile of more than £100 million, which it has blamed on employers being too busy to prioritise training, resulting in a lack of grant claims.

Ian Anfield, managing director of Hudson Contract, said: “At a time when CITB is already collecting more than it can give away, we don’t think the board has any justification to increase levy. In fact, we think CITB should be scrapped following 60 years of failure.

“CITB has ignored the reality that its schemes are too bureaucratic for most firms to navigate, and that its reputation is so poor that most firms simply will not engage. Instead, it is thinking about how to hit levy-payers harder.

“Alongside the increased levy, the board’s latest business plan sets out how CITB intends to return even less in grants over the next few years and spend less on apprenticeships whilst increasing spend on itself, in some areas by 50 per cent. It also plans to throw millions at reversing the closure of Bircham Newton, which cost millions to do when CITB moved down the road to Peterborough a few years ago.

“To make sure our clients have a voice in this, we are working with leading market research company Survation to ask half-a-dozen straightforward questions of our clients. Their responses will inform our stance on CITB and if we have grounds to challenge the proposed levy on labour providers and the board’s levy-raising powers in general.”

FE Week, a respected further education news website, recently reported how CITB’s shared apprenticeship scheme has repeatedly missed recruitment targets. According to FE Week, CITB has spent £8.5m on the scheme since 2017, attracting just 1,270 apprentices, which is equivalent to £6,700 per start. You can read the full story here. 

Mr Anfield added: “It’s astonishing that hard-working construction firms have to chip in for this. Like other CITB initiatives, the scheme is failing and should be scrapped because it does not provide value for money.”

Survation will be polling firms over the coming weeks.