A “twin-track” levy system combining the CITB levy and the new government apprenticeship levy would be favoured by the majority of major employers in the industry, according to a telephone survey of 212 large employers carried out by the CITB.
The survey formed part of its submission to the consultation on a new all-industry apprenticeship levy submitted last week to the Department for Business, Innovation and Skills.
The CITB surveyed all the firms “in scope” to the CITB with more than 250 staff – likely to be the BIS size threshold for paying the new apprenticeship levy – and around 100 responded.
The model, backed by 59%, would involve large employers paying a levy on their PAYE payroll directly into the BIS fund, while a levy on their labour-only subcontractors would continue to be paid to the CITB in return for a “modified levels of CITB service”.
According to the survey, only 13% would prefer to pay only the BIS apprenticeship levy and receive no CITB services.
“The majority say they want reform [of the CITB] but they value what the CITB does and they’d like to find a viable solution. So for us, it puts an emphasis on reforming the system and engaging with employers.”
Steve Radley, CITB
Under the hybrid system, which the CITB says is already being discussed with BIS officials, the CITB would also continue to collect the levy from firms under the 250 staff threshold.
Steve Radley, director of policy and strategic planning at CITB, explained: “Very few were willing to pay both levies at the full rate, which is quite understandable in an industry where margins are very tight. The majority say they want reform [of the CITB] but they value what the CITB does and they’d like to find a viable solution. So for us, it puts an emphasis on reforming the system and engaging with employers.”
Alasdair Reisner, chief executive of the Civil Engineering Contractors Association, said that its submission to the BIS consultation proposed a two-levy system.
The submission from the Confederation of British Industry also raised a number of issues with the government’s plans, including the need to ring-fence the money raised, and giving employers meaningful control of how the levy is spent.
But there is still considerable uncertainty around the BIS proposals, including the rate at which the levy would be set, and the threshold size for companies paying into the new levy.
In addition, following the Richard Review reforms, it had been proposed that employers would in future pay two thirds of the cost of apprentice training for anyone over 19, with the government paying one-third. Training for the 16-19-year-old age bracket would remain fully funded.
However, there is now speculation that the government will expect employers to bear most, if not all, of the cost of training over 19s, a move that the industry fears would inevitably reduce the number of apprentices in training.
More details on the government’s apprenticeship plans could be announced at the Comprehensive Spending Review.
But the possibility that employers will be asked to pay the full costs of apprenticeship training for certain groups has raised fears that this could depress the number of apprentices trained. Reisner commented: “If financially it is no longer viable to do apprenticeships, people won’t do them. So the government will have to decide on the level of support in the strategic interests of the UK.”
