Let’s ditch the training levy

‘Tear down the barriers to training.” So said David Willetts, the shadow secretary of state for skills. If you put that to the folk at ConstructionSkills, they would yell hurrah! And if you put that to building contractors they would shout hurrah! And if you put that to my cleaning lady, she would say: “What barriers?” Well, I’ll tell you – it’s a piece of awful law. It’s called the Industrial Training Act 1982 and it’s time for it to go.

The awful thing is the piece of law in the act that drags a mandatory annual tax from almost every contractor. The dreaded “levy” … no, the despised and detested levy that makes contractors turn against ConstructionSkills, their main training body. The levy is a great big stick. It is supposed to persuade contractors to take on apprentices so as to get the tax paid back in labour. If it worked, you would not have 50,000 youngsters seeking apprenticeships and companies saying, “no, thanks” to 40,000 of them.

Come and stand with me in front of a room of plastering, roofing or ceiling boys. Now watch their eyes when I mention the levy. Then listen. A lot reject the law that makes it a criminal offence, (yes, you could go to prison – it’s called fraud) for filling in false information on the levy form. This law is designed to catch firms that say their turnover is lower than it is so they don’t have to pay. The levy, year in year out, persuades folk to walk away from the training body.

And I bet if I spent a quiet hour over a decent claret with my friends at ConstructionSkills, they would admit that dragging a levy out of contractors damages their relationship with them and that collecting it costs them millions of pounds that ought to go into training.

So, you are a putter-upperer. Profits, if any, are mighty thin. Then the law pokes its nose in to require you to fill in a ConstructionSkills form. You have to count the number of chippies you have, and brickies, and groundworkers, and labourers … even the number of cleaning ladies. You also have to tot up all the money paid to the self-employed folk. Then you get an invoice for the levy.

If you don’t pay the levy, ConstructionSkills sues. It matters not one jot that this year your firm is making a loss – its hand still comes out for a whopping big cheque.

And if you don’t pay, ConstructionSkills sues. It matters not one jot that all you need this year is one apprentice, nor that this year your firm is making a loss, nor that ConstructionSkills has no training for your specialist partitioners or concrete repair outfits: the levy is still payable and ConstructionSkills’ hand comes out for a whopping big cheque. So you have a piece of law that is the worst thing for industrial relations you could have invented. Barrier? No, mountain. So now please, dear parliament, please consider this next bit.

Put the levy on the materials instead. Stop counting every bricklayer in the land and put the levy on bricks instead. Stop hunting down and counting every plasterer in the land for a levy per head; put the levy on plaster instead. Stop playing “find the roof tiler and all his mates”, then lumping a tax on each of them; just put the levy on the tiles instead. Can you work out how much money is spent each year counting heads for the levy?

ConstructionSkills sends out its levy form (five pages) to everyone in the land it thinks is in its scope. Yes, all builders, civil engineers, demolition contractors, dryliners, felt roofers, floorers, ashphalters, shopfitters, even steeplejacks and oodles more besides. Refuse to join the club or cheat on the data and you commit a crime. The levy department is the hunter-gatherer. It has the best collection of yellow pages in the land – to find you. It has levy inspectors on the road – a fleet of ConstructionSkills bikers can be found in your town and village.

Oh, come on. Let’s keep ConstructionSkills. Simply move the training income to a different part of the supply chain. Forget finding and counting and taxing every bricklayer. Just put a tiny percentage on the prime cost of bricks at source. It will be no skin off the nose of materials suppliers to collect the levy via their invoice and pay it to ConstructionSkills. All that is needed is, say, a 1% “training levy” at source. Then anyone who buys building materials pays levy when it buys them.

And (here is the trick) anyone who then trains or re-trains a lad or lass gets money as a reward. Easy? Well no, of course it’s not easy. The hard bit is getting that very kind David Willetts and his fellow MPs to actually do it. Come to think of it, parliament could do it by the end of next week and have a queue of construction firms welcoming ConstructionSkills and a string of apprentices at the door. We might even organise training so that we can immediately start training for the huge labour demands for the Olympics and to take the place of our eastern European friends who are now all on their way home.