How to fund a revolution

One of Gordon Brown’s bad decisions as chancellor was to interfere in the valuation and taxation of occupational pensions. He has turned what was the best system in the world in 1997 into the unmitigated disaster we have now. His worst decision by far though was, through retrospective legislation, to divert all the blame and remedial costs for that failure onto employers. By doing so, he has virtually killed off defined benefit pensions and voluntary employer-led schemes in general.

Brown’s perceived success at pulling off this audacious blame transfer is encouraging other departments to try the same trick. The Department for Education and Skills wants employers to accept responsibility for remedial literacy and numeracy training because the schools have failed in their basic task. Employers aren’t going to be caught again. At a regional Learning and Skills Council presentation last month, the clear message to the government from the employers present was “put your own house in order rather than trying to con employers into doing it for you”. Schools must ensure that 16-18 year olds are literate and numerate and fit for purpose when they reach work or university.

There is no sign that the government has the will or ability to repair the damage itself. The only response we get is more misleading spin. Last October, I wrote that the construction industry should sponsor its own construction city academies as the only way to resurrect standards of basic education. Nothing has changed since then. The construction industry has workplaces throughout the UK and is the only industry with an established and successful national training regime. We have a unique opportunity.

CITB-ConstructionSkills has made a fine start by opening its first ConstructionSkills academy at Bovis Lend Lease’s Bishopsgate project in London. The intention over the next five years is to open 30 such temporary training centres attached to large projects. These will create 10,000 local apprenticeships by 2010 and facilitate the awarding of 100,000 NVQs to experienced workers.

But this won’t help raise the educational standards of those under 16. How much better it would be for everyone if, instead of being temporary, these skills academies were constructed alongside and formed part of new permanent city academies, well governed by the construction industry.

A small addition to the VAT charged on all construction services and supplies would be easier to collect than a training levy

Such a radical change of approach would cost us serious money and require a complete review of the scope and assessment of the training levy. The current payroll levy on those who employ direct labour or engage labour-only subcontractors has hardly changed since the CITB began.

The scope should now be extended to spread the load more equitably and engage everyone who makes a living from the industry or its products. That will include all designers, QSs, project managers, engineers, construction managers, building surveyors plus all those consultants on the fringe involved in training, safety, regulations and so on. We must also include those who make the most profit from our industry: the housebuilders, property developers and the material manufacturers and suppliers.

The levy assessment method, to reflect the diversity of businesses, should be based on overall turnover or fee income. Even better, to share the burden more evenly across all those who benefit from construction and the DIY market, a small addition to the VAT charged on construction services and supplies would be much easier to collect.

Either way we could increase the total levy necessary to fund, manage and expand purpose-designed education and training through our own construction skills academies (CSAs). Then it doesn’t matter if it’s Gordon Brown, David Cameron or even Menzies Campbell who is in charge of government spin. Through our own network of CSAs we can ensure that we educate and train young people to the highest standards, without destructive political interference.