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Balfour Beatty set to vote against CITB levy

Balfour Beatty’s chief executive has said his firm is likely to vote against the continuation of the CITB as construction decides the organisation’s future in the coming weeks.

In a stinging attack on the industry’s training board, Leo Quinn said the UK’s biggest contractor could not justify the continued existence of the CITB and would likely vote against its continued operation past April next year.

Mr Quinn, whose company is the CITB’s biggest levy-payer, said construction’s current skills shortage proved that the CITB was not delivering on its remit to create the skills the industry needed.

Mr Quinn said: “To justify its continued existence alongside the wider apprenticeship levy, the CITB levy must deliver what its levy-payers – let alone the UK as a whole – critically need: the newly skilled workers to upgrade our infrastructure.

“Based on the information released by the CITB to date, we have little basis for confidence and strongly believe this is too important to leave to chance.”

Every three years the CITB undergoes a consensus vote, in which construction companies decide on whether to continue to pay a training levy to fund the CITB.

In June the CITB launched a consultation with stakeholders over plans to cut the levy from 0.5 per cent to 0.35 per cent from 2018.

After receiving approval from the board and the levy working party, the proposals were sent onto the formal consensus process in July.

The consensus voting process is due to end on 29 September. A result is expected in mid-November and a vote against the levy could see the CITB wound up after more than 50 years in existence.

Mr Quinn, who served on the Construction Leadership Council as head of the skills workstream, said companies were currently “voting in the dark” for an organisation whose success or failure would have a major bearing on future economic growth.

He said the lack of detail provided to date on the CITB’s future shape was concerning, given that the CITB received £200m a year via the levy – similar to the turnover of some levy-paying companies.

He added that the industry could be “sleepwalking over the skills cliff”.

Mr Quinn also called for the implementation of a new mechanism which would provide an effective check on the CITB’s delivery and clear sanctions in the case of failure.

Earlier this year, the CITB set out reforms that included an overhaul of the grant process for smaller firms, in addition to the reduction in the levy.

A review of the CITB led by former chief construction adviser Paul Morell is also ongoing, with a publication date of October.

Last month ministers came out ahead of the report’s publication urging contractors to vote in favour of keeping the CITB.

While he welcomed the reforms and the launch of the review, Mr Quinn said there was still a need for more information on what the body would look like following the reforms.

He said: “While we welcome the CITB’s statement that it recognises its failings and has begun a reform process, we its stakeholders (in every sense – investors, customers, underwriters) need much more information on what the reformed body will look like and what it will deliver.”

Mr Quinn also claimed that the fact that the CITB’s liabilities, such as pension buy-outs, would fall on the industry if it were scrapped meant firms were less likely to vote against the levy.

He said: “Were the industry to vote ‘no’ at consensus and cause the CITB to be wound up, any and all liabilities run up (eg pension buy-out) would fall to the industry to settle – a severe inducement for levy-payers not to exercise that prerogative.

“Combining the general lack of transparency on strategy, controls and fiscal approach, this is a level of accountability which would be deemed unacceptable in virtually any other public arena in the UK.”

Last year, Balfour Beatty’s grant of £2.18m from the CITB was the fifth highest of all contractors, behind Carillion (£6.95m), Kier (£5.2m), Laing O’Rourke (£3.05m) and Bam (£2.28m).

Mr Quinn told Construction News earlier this year that the construction industry needed to get to a stage where it was paying only one levy, saying the addition of the apprenticeship levy meant the industry was paying too many.

Responding to Mr Quinn’s comments, CITB chief executive Sarah Beale said: “We welcome Leo Quinn’s interest in the CITB’s governance and performance.

“We agree that the CITB needs to see through its reforms, and that the industry needs to be able to hold the CITB more strongly to account.

“Reform of the CITB has already started and full details of our complete reform plan will be shared in November, ensuring full alignment to the ITB review recommendations.

“Our biggest ever industry consultation held this spring suggests that a majority of firms, including the smaller employers that dominate our industry, broadly welcome the CITB’s reforms.

“These include streamlining what we do to provide better value for levy payers, embracing the modernisation agenda to help all construction firms become more productive, and ensuring that standards, training, support for careers and our reformed grants scheme are in place to meet industry’s key skill needs.

“We have also made it clear that we will work closely with our industry, with employers of all sizes and across Britain, to agree our objectives and to ensure that we are held to account in delivering them.

“We are confident that a reformed CITB, with active support and challenge from industry, will be well-placed to meet construction’s challenges ahead.”

Readers' comments (1)

  • Regretfully I agree with the abolition of CITB. Mr Quinn states a number of points familiar to many companies in U.K.

    Vocational Training Centres equal to current university status are now necessary. Degree status has equally failed over the past years. We need a practical Vocational common sence approach and good training.

    Regards,
    CM

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