This week’s Comprehensive Spending Review has provided further information about plans to introduce an Apprenticeship Levy and charge large employers 0.5% of their wages bill. Construction employers are now looking at the implication the new levy will have on the CITB levy and the services it offers construction businesses.
The Chancellor announced that the new levy, which will take effect in April 2017, would be set at 0.5% of an employer’s wage bill and would be collected monthly through the PAYE system. Each employer will receive an allowance of £15,000 to offset against their levy payment. In practice, this means that the levy will only be paid by businesses whose annual wage bills are in excess of £3 million.
Smaller employers which will not pay the levy and will continue to be able to access Government support for apprenticeships.
The changes could impact on the future role of CITB and the skills training body could see its income reduced as a result of the new apprenticeship levy if large employers pay the new levy and not the CITB levy. A lower income may also affect the services that CITB can offer.
James Wates, Chairman of the Construction Industry Training Board (CITB) says: “The Apprenticeship Levy creates a challenging environment for CITB across Great Britain, we will continue to support industry and work with government to ensure the best possible outcome.
“Our next step is to engage in extensive consultation with employers and work out the most effective way to continue providing the construction industry with the skills and training it needs.”
Trade body Build UK said whilst no announcements have been made, the Government acknowledged that responses to the consultation which had shown that “industries that already contribute to an existing levy system do not wish to contribute to two levies at once” and it will have further discussion with CITB and employers.
Construction Products Association chief executive Diana Montgomery said: “We estimate the levy may affect manufacturers with as few as 100 employees. We appreciate the establishment of a new employer-led body to set apprenticeship standards and ensure quality, not quantity. This body needs to include manufacturers and distribution representatives of the construction supply chain. The critical focus must be on a ‘light-touch’ approach that delivers the right skills.”