On Sunday 20th August, Leo Quinn, CEO of the UK’s largest contractor Balfour Beatty, launched a blistering attack on the Construction Industry Training Board.
Mr Quinn told The Sunday Telegraph: “The skills shortage shows the CITB hasn’t been doing its job for some time.” Mr Quinn has put the CITB on notice that Balfour Beatty is likely to withdraw its support for the CITB to continue collecting the £200 million a year government-approved levy that construction companies must pay.
Until now, ongoing support for the CITB by construction’s major players has been taken as given, and Mr Quinn’s decision to break ranks may turn out to be a watershed moment for the future of training in the construction industry. He is now saying much of what Hudson Contract’s clients have been telling us for many years:
Mr Quinn declares: “Currently the CITB occupies a pivotal role in providing all of us in the sector with the skilled workers we need. Bluntly, the present skills shortage shows it hasn’t been doing this for some time.”
He also highlights the fact that CITB has ‘a fundamental governance weakness’ plus a ‘general lack of transparency of strategy, controls and fiscal approach’. “This is a level of accountability which would be deemed unacceptable in virtually any other public arena in the UK,” he adds.
Predictably, the CITB’s instant response to The Sunday Telegraph was to claim it is ‘working hard’ to tackle the skills shortage.
However, the official line from Sarah Beale, CITB CEO, will raise eyebrows – and blood pressure – across the industry. In a statement to Construction Enquirer, Ms Beale claims: “Our biggest ever industry consultation held this spring suggests that a majority of firms, including the smaller employers that dominate our industry, broadly welcome CITB’s reforms.”
But Ms Beale says full details of these ‘reforms’ are due to be announced in November . . . AFTER the consensus vote from levy-payers – that the CITB must win in order to survive – takes place.
So as far as we are aware, the CITB has promised yet more changes in the grant rules. This could make it even more complicated for small firms, who mostly regard the levy as a tax, rather than an aid to training, to make claims. The CITB has also spoken about a proposed PAYE discount of 0.15% which would save small firms virtually nothing.
We have been representing the views of our clients, many hundreds of whom pay the CITB levy, for some time. With very few exceptions, our SME clients believe the levy offers little or nothing in terms of meeting their training needs, and want the CITB to be scrapped.
In the past, Hudson Contract has called for radical reforms, such as bringing the levy into real time collection, spreading the burden of payment more evenly across the industry, and designing a levy that takes only from those who can afford to pay.
But as the Consensus Process enters its final weeks and days, we now agree with Balfour Beatty and many others that the only sensible option is to scrap the CITB and its levy altogether, allowing the industry to respond with something new that will prove far more beneficial to the industry and its training needs.
Having said that, a note of caution.
In July this year, Brian Berry, Chief Executive of The Federation of Master Builders, said the CITB was ‘not fit for purpose.’ He then performed a rapid U-turn to signal his organisation would probably vote for another three years of levy . . . even if his members don’t agree.
To understand the FMB’s mixed message, you perhaps need to look no further than the fact that while the Consensus Federations – which historically block vote in favour of the levy – have been promised almost £9m in funding this year, less than £100k has been earmarked for the FMB. Is it possible Mr Berry’s scathing criticism and shot across the bows has earned him a bigger share of the funding pot?
Turning now to the major contractors, they have been promised an extra £3m on top of their usual grants.
We can only wonder how happy Balfour Beatty are that the £2m they receive from the CITB lags well behind Carillion’s £7m and Kier’s £5m. Could a better return encourage them back into line? Only time will tell.
Regardless of what the Consensus Federations do with their block votes, and what the major contractors do with their muscle, we believe that the ultimate decision should rest with the smaller businesses that shoulder the largest levy burden, and receive the poorest return in terms of grant support.
It is universally accepted it’s the small firms that employ trade apprentices and pass down trade skills, so it should surely be for them to decide the CITB levy’s fate?
We continue to deplore the CITB’s decision to avoid a simple vote of ALL levy payers. Quite simply, it is shamefully undemocratic.
Managing Director, Hudson ContractMore from this expert
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