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Apprenticeship levy could co-exist with CITB, says Build UK

The government’s proposed apprenticeship levy could run alongside the existing CITB system, according to contractor trade body Build UK.

In its response to a Department for Business, Innovation and Skills consultation on the introduction of a levy to fund apprenticeships across all sectors, Build UK has called for a “hybrid system” for construction.

The group, which launched last month after a merger of the UK Contractors Group and the National Specialist Contractors’ Council, said its members’ preference was for a system “that does not significantly increase costs for large employers”, while ensuring small businesses that do not currently pay the CITB levy are not hit by additional charges.

Under the Build UK proposal:

  • Large employers in construction would pay the government’s apprenticeship levy, anticipated to be set at 0.5 per cent of their PAYE spending - equivalent to the current CITB levy rates;
  • Levy contributions from those employees should be “channelled back to the CITB” and ringfenced for apprenticeships;
  • Large employers would also continue to pay the remainder of their CITB levy contributions, including 1.5 per cent on total labour only subcontractor (LOSC) payments;
  • Other employers currently “in scope” to the CITB would continue to pay the training board’s levy.

However, Build UK, which represents 27 major contractors and 40 trade associations, also recognised the need for “radical reform” of the CITB levy and grant system.

Speaking to Construction News, Build UK chief executive Suzannah Nichol said: “We support the ambition of creating a fully skilled workforce. The current system does not achieve that but just imposing this levy does not achieve that either.

“It requires a re-engineering of the system that serves us all better.”

The consultation closed last week, with an announcement on a new levy system expected as part of November’s Comprehensive Spending Review.

The proposed levy is part of a government drive to create three million apprenticeships by 2020.

However, in its response, the CBI said it did not support the model, adding that it was concerned about a focus on “numerical targets” rather than on “the main point of an apprenticeship – delivering high levels of skills that workers and businesses need”.

Business group London First meanwhile expressed concern about the “additional cost burden” on businesses if the two levies existed side-by-side. It added that it wanted any system to “allocate a proportion of the levy to training by smaller firms”.

The CITB received £161m of funding through its levy during 2014, with £131m returned to members in grants.

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