Does the CITB levy and grant system make training more expensive – and reduce the number of trainees the industry needs?

This time last year, two surveys produced by YouGov and Hudson Contract concluded that the Construction Industry Training Board’s funding-by-levy and awarding of grants procedure was supported by less than 20% of SMEs in the industry.

Now, with just a matter of days still to go for the CITB to demonstrate it has achieved industry support for a further three years of the levy that keeps it alive, the view persists that training is driven by contract demands, staff retention and health and safety standards – and that smaller firms would actually be able to spend more on training if the CITB were to be scrapped.

And the situation could get even worse . . .

New system to deliver worse value for money?

Under the CITB’s latest plans for awarding grants for training delivered, firms will be compelled to use a CITB-approved training provider.   That’s something we discussed during a recent meeting with officials at the Department for Education.   One of our clients who attended pointed out:   “If the approved training provider knows we’re levy and grant registered, the price goes up, typically by around 40%.” 

Meanwhile, the industry’s crucial vote is taking place with levy payers denied sight of the long-awaited Morrell Report – commissioned to help determine the future shape of the CITB – or any real knowledge of the new grant process.

As for scrutiny of the consensus process itself, that is viewed by many as self-serving.   Or as someone put it to me: “Why should we trust a quango whose bureaucrats are seen by many SME’s as there simply to perpetuate their own existence?”    

The current process begs questions

First and foremost, is there a conflict of interest in the current levy consensus?  Are those advocating more of the same guilty of putting self-interest ahead of the needs of the industry and the economy?

I’ve been reviewing the CITB’s press releases, and come to see how adept they are at creating soundbites.

Statements in the past 12 months have included:

• Hopes that the new deal of a reduced employee levy rate (not to mention £40 million worth of one-off ‘supplementary payments) would ‘improve perception ahead of seeking consensus.’
• The mantra:  “We have listened to what the industry has said”.

Crucially in one press release, the CITB asked:  “Does this – the reformed CITB levy and grant – deliver value for money?  It’s a pity they weren’t brave enough to ask that straightforward question as a clear and unequivocal consensus question.

Effectively consulting the levy payers?

Another press release revealed an independent survey company would be talking to 6,000 individual contractors and went on to promise:  “We will be scrutinising the trade federations over how they will consult with their members.”

It remains to be seen how effective these two actions will prove to be.  All I will say for now is that it is Hudson Contract’s intention – acting on behalf of the 1,138 SMEs who gave us a remit to lobby against the levy-and-grant system – to force the CITB to properly account for these two exercises it has pledged to undertake as part of the consensus procedure.

On the subject of accountability, I read about Leo Quinn, CEO of Balfour Beatty, calling into question the CITB’s accountability to the industry it exists to serve. (Further details here) 

Having already commissioned Deloitte to analyse the CITB’s 2015 & 2016 accounts, we have made their findings – which highlight questionable reporting practices and a lack of clarity – available to the Balfour chief.

Clearly, Mr Quinn is scrutinising the effectiveness of the CITB in increasing the numbers of properly trained construction workers.  As a founder member of The 5% Club, whereby firms commit to ensuring at least five per cent of their employees are trainees, his actions demonstrate a direction I believe more would follow were it not for the imposition of a “training tax” that routes funds through a costly – and unaccountable – quango.

And will a further three years of levy-and-grant deliver a bigger and better trained construction workforce?  Eighty-two per cent of the SMEs that took part in our surveys about the CITB and its future think not . . .