That’s the way the money goes

What does the statutory levy for training, raised annually by CITB-ConstructionSkills, actually produce for the industry?

The compulsory levy was set up to share the cost of training among employers. With a highly mobile workforce, firms are often reluctant to train, fearing they may lose the trainee to a competitor. The supply chain is also highly fragmented, with an increasing tendency towards subcontracting and self-employment.

There is a case for a compulsory levy, and a case against (though not one I support). There is no case for a voluntary levy – nobody would volunteer.

In 2005, the levy raised £136m. But training grants, college fees and other cash disbursements for the direct benefit of employers and trainees amounted to £140m – up 12% on 2004. Small and micro firms, which account for most of the industry, contributed 43% of levy income but received 52% of grant and support. There were 72,159 registered firms, of which 70,101 were small or micro, but only 25,966 paid the levy. The rest were either too small, had only just registered, or had closed.

Fixty-six per cent of grants was spent on new-entrant training, via apprenticeships or other such schemes, and 44% went towards further training for existing industry workers in areas such as health and safety.

In the form of money, help and advice, the industry received £1.88 last year for each £1 raised in levy. That is a good return.

How is that money used? In many ways, but all of it to the industry’s own agenda, as advised by the federations and trade unions.

There are still far too many firms in England – though fewer in Scotland, with its strong training culture – which leave training to someone else

CITB-ConstructionSkills manages 9,000 apprentices a year. The achievement of its framework apprenticeships – that is, all the component parts of an apprenticeship, making them fully qualified – has greatly improved. The framework completion rate was only 31% in 2004 but was 55% in 2005, and could reach 65% this year.

In 2005/6, a new pilot scheme to provide site experience got off the ground, leading to NVQs for the thousands of full-time further-education students who could not otherwise complete apprenticeships. There will be a much larger programme in 2006/7, backed by the Major Contractors Group and the Major Home Builders Group.

A big push with schools, and a media campaign over a number of years has resulted in many more high-quality applicants seeking to join the industry. There is also a substantial diversity programme, attracting women and people from black and ethnic minority groups to construction, although there is still a long way to go to make the industry truly representative of modern Britain.

In assessing or upskilling the existing workforce, 279,000 people took the health and safety test last year, of whom 220,000 passed. This year should see the millionth passed test. The On-Site Assessment and Training Programme (OSAT) helped almost 30,000 people obtain a VQ in 2005. Around 200,000 CSCS and affiliated cards were issued.

It is important to increase the number of firms that invest in training. Currently, only about 27% of employers do so. There are still far too many firms in England – although fewer in Scotland, with its strong training culture – which hand the responsibility for training to someone else. More than 19,500 construction employers were involved in training last year and 9,500 small firms were visited by CITB-ConstructionSkills’ company development advisers, representing 64% of their total visits.

By no means all of CITB-ConstructionSkills income is raised from the levy. Last year, more than 41% came from other sources such as industry training courses, sales of publications, and specific grants for projects from the government or public authorities. However, although it is both a statutory body and a charity, CITB-ConstructionSkills does not receive a penny from the government for its normal running costs, nor does it expect to.

Next time, I will look at the Sector Skills Council ConstructionSkills. It has a wider agenda that is likely to expand further in 2007.