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When the new coalition government came to power, two of its major pledges were to set business free and reduce the number of unseen quangos that rule our lives. Never shy, FPDC is pleased to nominate a quango that is worthy of some serious government attention; the Construction Industry Training Board with its accompanying levy.
Cleverly rebranded, CITB now operates as part of ConstructionSkills (CSkills), but should you question the operation of CITB, the good people of CSkills are very quick to point out that it is ‘nothing to do with them’. They’re right because, although intriguingly it appears to be run by the same people, it’s a separate entity; that is owned or disowned at political convenience.
The two parts merit further explanation. CSkills is a Sector Skills Council (SSC), one of 24 “employerdriven organisations that together articulate the voice of the employers of around 90 per cent of the UK’s workforce on skills issues” but then you knew that because, they regularly consult with you, don’t they. No?
Every trade or profession has a government code to allocate it to the ‘footprint’ of one of the SSCs. Our sector falls within CSkills but plumbers and electricians, for example, are under SummitSkills. SSCs each undertake the same tasks for their sector, including developing the necessary qualifications and forecasting their sector’s training demand. As with the other SSCs, CSkills receives a modest government grant to carry out these statutory functions.
CITB is quite different; it is one of only two remaining statutory training boards. Created in 1964, its wellmeaning purpose was to ensure proper training investment by giving grants from a money pot collected by a construction levy - “A levy on the employers in their industries to finance their training activities, including grant schemes, and to fund the operating costs of the boards”; so says a government order paper. That paper also states: “They exist because of wide support from employers and employer interest groups in these sectors who believe that without them there would be a serious deterioration of training.”
At this point things stop adding up. If the levy prevents ‘a serious deterioration in training’ then logically those that don’t pay levy must have terrible training? So how come only the construction industry pays levy? Moreover only certain parts of the construction industry pay levy? Our M and E colleagues managed to withdraw from the scope of the construction levy years ago and now pay nothing. Is their training in shreds? Given that almost every M and E operative is qualified and certificated, the argument could be made that their training is much better than ours; it certainly isn’t worse.
If the levy is so essential to good training, how can SummitSkills and other SSCs manage to fulfil their duties without the many millions of levy that CSkills reaps? If SummitSkills can fulfil its duties so well on its small statutory grant, why does CSkills absorb around £50m, yes, that’s £50m of your levy payments, each year in operating costs?
FPDC used the Freedom of Information Act to question CSkills. We found the interiors sector paid £14.5m in levy in 2009 but only £6.2m (that’s 43 per cent) was returned in grants and support (i.e. some of their staff costs). That’s £8.3m of your levy out the window with no explanation in just one year.
Put politely, CSkills is in a bit of a financial pickle. If you have the heart to read its announcements you will know that they recently ‘futureproofed’ the grants scheme, which means they have axed or slashed pretty much everything.
In recent correspondence the new minister overseeing CSkills challenged our description of them as ‘practically bankrupt’ saying: “However, it is true that CITB expenditure exceeded income in both 2008 and 2009 and, as a result, CITB’s working capital fell below agreed levels,” so not practically bankrupt ….yeah, right. So for the foreseeable future grants will be pared back into the bone whilst CSkills keeps your levy to regain its liquidity.
SBF carries a small article from CSkills urging us to learn the lesson of the last recession and keep training despite hard times. They’re absolutely right; the trouble is you’ve paid your levy to support training but the grants are now virtually worthless. So to keep training you’ll have to pay…..again!
Maybe that is why the M and E ‘no levy/no grant’ model works better; they only pay once for their training, but we pay twice and that is hardly an incentive. Is this why the other Industry Training Boards were scrapped years ago having proved ineffective in their roles?
Putting this argument to the minister, we got the reply at the head of this article: “They exist because of wide support from employers and employer interest groups,” and “the majority of employers supported their [CITB levy] proposals.” Maybe we’re wrong but we suspect that any employer consulted (and we haven’t yet found one) was asked a question akin to “which would you prefer – a poke in the eye or a kick in the nuts?” FPDC believes the state controlled levy system is inefficient and a disincentive to training. It won’t be easy but we intend to find out how much real support the levy has and, if correct, we will launch a construction wide campaign to get the levy scrapped. Whether you’re for or against, send your comments to citblevy@fpdc.org
This article previously appeared in Specialist Building Finishes magazine. Copyright belongs to http://www.fpdc.org
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