CITB clobbers SMEs; large companies get off lightly

21st January 2020 | Hudson Contract

CITB’s own figures show its levy and grant system consistently works against the financial interests of micro, small and medium sized construction companies (SMEs).

In the year ending December 2016, SMEs paid a total of £138.7m in levies. In return, they received £87.8m in grants and other support payments.

If this was a business investment, it would represent a negative return of 37 per cent, a loss that few SME business owners could stomach.

Large companies had a much better deal, paying £59.4m in levies and receiving £52.7m in grants and other support payments.

The following year, things got even better for the major contractors.

Large companies lapped up grants and other support payments totalling £72.6m after paying levies of £63.4m in the 15 months ending March 31 2018.

This represents a very healthy 15 per cent return on investment, a performance to cheer shareholders in the City.

It was a very different tale for the SMEs, which were forced to pay out £147.9m in levies and received just £106.5m in grants and other support payments, representing a loss of 28 per cent.

Those losses deepened last year as SMEs experienced a negative return of 53 per cent. Micro, small and medium companies paid £135m in levies and received grants and other support payments of just £63.7m in the 12 months to March 2019.

The major contractors got off lightly again, paying just £53.5m in levies. Their grants and other support payments fell to £26.9m, a loss which will have offered little consolation for hard-working SMEs because they know CITB will be working hard to compensate the large firms with a more generous return this year.

To illustrate the inequities of this flawed system, look at the overall balance of levies versus grants between 2016 and 2019.

Large companies paid £176.3m in levies and received £152.2m in grants and other support payments, representing a loss of 14 per cent.
SMEs meanwhile paid an eye-watering £421.6m in levies and received grants and support payments of just £258m, representing an eye-watering loss of 39 per cent - a return nearly three times worse than the large companies.