CITB training levy faces overhaul

The industry training levy run by CITB-ConstructionSkills is facing a major review, with a panel of industry leaders set up to propose reforms to the government by the end of the year.

The push for reform comes after the government announced this week that the industry training body will retain its public sector status and power to raise a levy. But there has been growing pressure on the entity to reform the way it runs the industry training budget. This pressure includes, it has emerged this week, the threat of legal action
by a main contractor over charges levied.

The review group will consist of members “representative of levy payers” put forward by the FMB, CECA, UKCG, NSCC and SBF, and will be chaired by a member of the CITB board. The first meeting will take place on 28 March.

The main focus of the review will be how to mitigate potential loss of funds from self-employed workers, as a result of HMRC’s proposed drive to move up to 300,000 self-employed workers on to contractors’ books. The CITB currently charges more levy per self-employed worker than per PAYE worker, which means the industry training body could stand to lose hundreds of thousands in income if the change goes ahead.

The group will also look at the growing problem of levy avoidance by contractors. Douglas Matthew, head of levies and grants for the CITB, said: “There have been instances of companies legitimately taking parts of their business out of the scope of the CITB. [But] is that in the spirit of the levy?”

The group will also consider charges levied on demolition work. At present, main contractors pick up the training bill for their demolition subcontractors on the grounds that this is labour-intensive work. But the CITB confirmed that an unnamed main contractor is now threatening legal action and that this policy is also up for review.

The CITB will look to pre-empt government demands for reform ahead of the Levy Order renewal date in early 2012.