Chairman’s Update: What next for the CITB?

Several of our clients have recently asked:  “Why are you taking issue with the CITB?”  To which my answer is:  “Because the CITB take from the many and give to the few.”

Hudson Contract Managing Director Ian Anfield became aware of the shockingly complacent aspects of the 2015 levy, a few months before it went Business, Innovation & Skills Minister Vince Cable for sign-off.

We applied for a judicial review of the levy order because we knew the 2015 Act would have an unfair – and disproportionate – effect on many of our clients, especially SMEs and second or third tier firms in the construction chain.

Our claim was heard before a judge in March 2016 but failed because the Secretary of State has the power to approve any measures proposed by the CITB, provided they are backed by a consensus of a majority of the construction industry by proportion of turnover and ‘manpower’.

Although the case was unsuccessful (and was undoubtedly a costly learning curve), it revealed to us many flaws in the process adopted by the CITB plus many representations disguised or without substance.   Consequently, we have elected to stay ‘in the fight’ and on behalf of all our clients, Hudson Contract continues to contest the actions of the CITB in persisting with their approach to the next levy order.

Yes, the consultation process for the 2018 levy order has been in progress for many months already.

There are many signs that next time round, the CITB are not going to have it all their own way as they have in the past.  Not only are we determined to challenge their complacent ‘consensus-assured’ approach, but several trade bodies are also now wise to the fact that their members do not support the CITB’s grant and levy orders – and that by giving blanket trade association support, they go against the opinion established by the Hudson Contract Client Survey (view a copy here) plus a December 2016 independent YouGov poll.  You can see the results of the YouGov poll here.

At an end-of-year meeting and presentation by the Federation of Master Builders, there was a shocked reaction to the fact that so many respondents to the YouGov poll were against the levy and grant scheme because there was so little by way of training grants available to SMEs.

It is interesting to note that just days after the FMB event, the CEO of the CITB, Adrian Belton, resigned. 

Present at that meeting was an official from the Department for Education, which has commissioned Paul Morrell, the government’s original Chief Construction Adviser, to counsel them on the future of the CITB (and the other two remaining industry training boards) as reformed, unchanged or scrapped.   Our Managing Director Ian Anfield has already met Mr Morrell and his team to make representations and provide fact and opinion on behalf of Hudson Contract clients.

Last week, Ian submitted further evidence, questioning some of the data previously relied upon by the CITB to support the grant and levy scheme, calling into question the effectiveness of the process to alleviate the skills shortage.  And in respect of a question raised by Paul Morrell, that I paraphrase as: “If the grant and levy is scrapped, what should replace the scheme to ensure skills training?” Ian has already responded with a proposal. 

My simple solution

Meanwhile,  I wonder if a simple solution might be considered in paralleling with the Research & Development tax credit laws:  if a firm invests in R&D, and the expenditure is justified and accepted by HMRC, the Revenue permits a 230% tax credit against the firm’s profits.

So why not offer this simple tax incentive for training?  It could be applied to all firms, employees and subbies.  Simple, effective and without the necessity of a Government quango which might be seen as intervening in a manner that is unfair and financially unjustly, to the many.