Hudson intensifies calls to scrap CITB Levy

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87% of construction professionals want to scrap direct funding of CITB and end the CITB Levy, according to a survey by Hudson Contract

The verdict from 87% of respondents in the construction industry looks set to undermine CITB’s ability to claim industry support for its levy-raising powers.

Hudson Contract Services, which polled its customer base of more than 2,500 construction SMEs, is proposing a radical rethink of training provision in the industry.

If Government wants to maintain a construction specific training levy, HMRC should collect payments in real-time instead of 18 months in arrears under the ‘outdated’ CITB system.

Hudson says this would save hundreds of millions of pounds of spending on running costs and questionable schemes and apply fairly to all firms carrying out construction work.

The Hudson survey, which is being independently verified by a leading global market research firm, reveals the following:

  • 89% pay the training levy to CITB
  • 42% do not claim grants or other funding from CITB
  • 80% arrange and pay for training for which they receive no CITB funding
  • 87% say scrap the CITB levy
  • Only one in five firms are members of CITB-approved consensus federations
  • 92% are happy to be represented by Hudson Contract in levy consultation.

‘No point in CITB’

Ian Anfield, managing director of Hudson, said: “It is strikingly clear from our survey that a vast majority of construction SMEs see no point in CITB and get no value from its levy and grant scheme.

“The fact that most companies deliver their own training activities regardless of CITB underlines the irrelevance of the quango in a modern economy.

“Its heel-dragging response to the coronavirus crisis highlighted its instinct to put self-preservation above any support for the sector.

“We are calling for wide-ranging reform and are proud to provide SMEs with a trusted voice in this important debate about the development of skills in our industry.

“That so few are members of consensus federations shows the unrepresentative nature of many trade bodies. They claim to speak for the sector but in reality are compromised by the millions of pounds in grants and other funding they receive from CITB.”

Alternative levy

Hudson proposes the following five-point action plan:

  1. Scrap the 2020 levy bills now with no collection this year at all. This is a valuable step to help all SMEs in the sector struggling with cash flow.
  2. Scrap all levy not yet collected from previous years. If efforts chasing arrears haven’t been effective to date, what chance now?
  3. Introduce real-time levy collection so it is responsive to economic cycles. Task HMRC with collection as per the apprenticeship levy.
  4. Change the rate of collection to one much lower single rate for all labour and require all construction firms to pay it.
  5. Task the Skills and Education Funding Agency with online grant administration via the GOV.UK website and encourage companies, consortia and CITB to apply for training

This alternative model will reduce costs for industry, cut red tape and put more money into government coffers.

Hudson is consulting on the model with its 2,500-strong client base, HM Treasury, HM Revenue and Customs, MPs and a number of trade federations.

Anfield added: “In our radical rethink, CITB’s hugely expensive and wasteful collection exercise becomes an irrelevance and is replaced with a process that is real-time and responsive to the economic cycle.

“Unlike CITB’s antiquated levy and grant system, it would catch everyone meaning much smaller levy bills, and deliver transparency, fairness and value for money.”

In response, CITB head of policy & external affairs, Mike Hobday said: “Hudson’s action plan gives the game away: they’re not focusing on the needs of SMEs but trying to avoid their own debt of £27.4m.

“If they paid the money owed in levy, more support would be allocated to micro, small and medium-sized employers, including through training funds.”

Ian Anfield added: “If our clients thought the CITB was worth paying for we would just add the levy to our fees, however the simple fact is that they see the CITB as a self-serving quango that needs to be scrapped.”

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