The Construction Industry Training Board (CITB) has proposed a cut in the levy rate for 2018-2020.
The proposal is to cut the rate from its present 0.5% to 0.35% PAYE, with the subcontractor NET CIS rate staying the same at 1.25%, following CITB’s biggest ever consultation with industry.
After receiving approval from the CITB board and the Levy Working Party – which is made up of firms of all sizes and from across England, Scotland and Wales – the proposal will now go onto the formal consensus process, from early July to the end of September.
Consensus Federations will seek the views of their members about this proposal and have all demonstrated to CITB that they have a transparent and robust approach. In addition, an independent survey will seek the views on the proposal from 6,000 employers, who are not members of Consensus Federations. This is a significant increase on the previous survey.
Following the formal consensus period, the result will be ratified by government.
The proposed cut comes as 900 levy payers face an extra payment for the apprenticeship levy.
Sarah Beale, CITB chief executive, said: “We are pleased that this levy rate has been approved by the CITB board and the industry-led Levy Working Party. We firmly believe this offers value to employers and will deliver great impact for our industry in generating the construction skills it requires.
“It was critical that we extensively consulted employers across England, Scotland and Wales on this and our future plans.
“We now move onto the next stage of the process – formally seeking the views of employers through the Consensus Federations and through a large independent survey of employers who are not in their membership. I look forward to sharing the results later in the year. Ahead of this, we will be sharing more details of how CITB will use funds raised by the levy to support construction to meet its skill needs.”
During consultation, CITB held 38 employer events and 80 regional membership events – meeting more than 2,000 construction employers for feedback on the levy proposal and its future plans.
Employers then rated the proposal with:
- 50% rating it as good or excellent;
- 24% rating it as average;
- 27% rating it as poor or very poor.
The consultation also revealed that employers in Scotland and Wales responded more positively overall than those in England. Smaller firms were also more favourable to the proposals than larger companies.
The consultation revealed that geographically:
- 42% of employers in England rated it as good or excellent; 31% poor or very poor;
- 66% of employers in Scotland rated it as good or excellent; 15% poor or very poor;
- 70% of employers in Wales rated it as good or excellent; 15% poor or very poor.
By employer size:
- 49% of micro firms (0-9 employees) rated it good or excellent; 35% poor or very poor;
- 58% of small firms (10-49 employees) rated it good or excellent; 15% poor or very poor;
- 41% of medium firms (50-200 employees) rated it good or excellent; 26% poor or very poor;
- 42% of large firms (200 + employees) rated it good or excellent; 30% poor or very poor.
