Two levies to stay for construction firms

Construction businesses will continue to pay both the construction levy and the apprenticeship levy, minister Anne Milton confirms

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The construction industry will have to continue to pay both the apprenticeship levy and the sector's construction levy, the minister for apprenticeships and skills has said.

In a letter to the chair of the Construction Industry Training Board (CITB) published today, Anne Milton acknowledges the industry’s concerns at having to pay to levies, as well as the “issue of affordability”.

However, she writes: “The purpose of the apprenticeship levy is quite different from the industry training levy: it is specifically to support and incentivise investment in apprenticeships. The CITB may wish to consider whether there is more you can do to help the industry to get the most from the apprenticeship levy, and we will of course continue to discuss with you any particular issues you find as the new apprenticeship arrangements bed down.”

While the construction levy has been in place for decades, the apprenticeship levy was introduced earlier this year to help fund the growth of the apprenticeship programme to the government’s target of 3 million starts by 2020. It has to be paid by all large businesses across the UK, and the money raised can then be used by these businesses to fund apprenticeship training. Construction industry representatives will vote later this summer on whether to accept the CITB levy proposals. If they vote in favour, the two levy system will continue for the sector. If they reject it, that could mean the closure of the CITB. 

Value for money

Ms Milton writes: “I hope we can agree that the real test for both levies, though, is whether they provide value for money in delivering the skills the industry and its customers need.” There were concerns across the industry, she explains, about the effectiveness, efficiency and responsiveness of the CITB.

“I know you and your colleagues at CITB have now started to implement a major reform programme to reduce the size of the organisation and make it more focused on those aspects of the skills agenda where there is clear market failure, or where a collective approach to training can deliver real benefits to employers, including small businesses."

The government was supportive of the direction of those reforms, she adds. “We encourage you to continue to develop and refine them in discussion with the industry and government. Our continued support for the CITB depends on your reform programme being seen through. Our final review report in the autumn will set out more details of the arrangements we will put in place to make sure that CITB is more clearly accountable to the industry it serves, and the specific expectations we have of it.”

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