CBI’s ‘double whammy’ levies warning

CBI’s ‘double whammy’ levies warning

Employers must not be “hit by a double whammy” of charges after the government’s planned apprenticeship levy is introduced, the Confederation of British Industry (CBI) has warned.

The government launched a consultation on its plans for a new apprenticeship levy for larger employers on August 21, which the CBI criticised for failing to give any indication of the size of workforce this would entail.

Now Neil Carberry (pictured), CBI director for employment and skills, has spoken out on the issue of how it would work alongside existing levies.

The Construction Industry Training Board (CITB) is part-funded by a levy on employers in that sector.

It allows the CITB to develop qualifications and standards and give out £150m a year in grants, paid for through the levy, to employers to help pay for training — which could, for example, be spent on apprentices’ wages or to pay for a mentor.

The separate Engineering Construction Industry Training Board (ECITB) also charges a levy, which supports a wide variety of training for employees and contractors involved with the build, repair and maintenance of the UK’s energy and process industries.

Mr Carberry said: “The CBI is currently looking at how the new [apprenticeship] levy system should operate to be most effective, including in construction where the industry recognises the value of investing in the CITB, but it’s important that employers are not hit by a double-whammy [with the other levies].”

Stephen Radley, director of policy and strategic planning at CITB, said that decision over whether the existing CITB levy should continues, and in what form, “really depends on whether the industry wants to continue paying it”.

“We are working with the government and employers to look at different options — which could include a lower existing levy to run alongside the apprenticeship levy.”

He conceded that there is “a concern” that some employers would “consider it unreasonable to have to pay both [levies].”

Mr Radley also said that though the new apprenticeship levy could cover the costs of investing in apprenticeships for larger firms, CITB would still need to support smaller employers who deliver the majority of apprenticeships in construction but would apparently not pay the new charge.

“If the government sticks with the usual definition for large businesses for the new levy, which is typically 250 in government legislation, it would draw in 220 construction industry employers in contrast to 25,000 levy payers across the industry,” he said.

“It’s because, in our industry 96 per cent of companies have nine employees or less and the vast majority are small or medium-sized. And unlike other industries they deliver most of the apprenticeships.”

Chris Claydon, chief executive of ECITB, welcomed “steps to increase the skills and productivity in the workforce and meet the challenging government target of 3m new apprenticeships over the next five years”.

But he said: “Without more detail on the [apprenticeship levy] proposal, it is difficult to see how it could be implemented.

The ECITB is, however, still “keen to work closely with the government on the apprenticeship levy and will consider how it could interact with existing sector levy boards,” Mr Claydon said.

He added that over the 25 years that ECITB has been in operation, it has an “enviable record in successful delivery of apprenticeships. As an industry we deliver 36 apprenticeships per 1,000 workers against a national average of 12 per 1,000”.

Mr Claydon said that it was also important to note that the two levies “are raised differently and for different purposes”.

“The apprenticeship levy will pay for training and assessment of apprentices for large

employers,” he added.

“The industrial training levy in contrast raises a skills investment fund which supports all types of training across the whole industry.”