A proposed major shake-up in government training funding could bring increased transparency to construction apprentice funding – but raise questions over the role of the CITB and the £145m levy and grants system, sources have told CM.
The Department for Business, Innovation and Skills last month launched a consultation into three options that would allow government cash for training apprentices to be managed directly by employers. See our previous story here.
The government has already adopted the principle of employer-managed funding, a recommendation of last year’s Richard Review on apprenticeships, meaning that the consultation is essentially only looking at the mechanism to be adopted.
The CITB as a managing agent last year recruited 3,600 construction apprentices, although this is only a minority of overall construction apprentice starts. Colleges and consortia of training providers can also act as managing agents.
“When an employer gets an apprentice through CITB, they think they’re getting their levy money back, but that’s not the case – there’s a lot of government support as well.”
Industry insider
As managing agents, the CITB and others currently accesses government funds and distribute them to a network of training providers that receive around £3000 to £4000 per apprentice per year. In future, this money could be paid directly to construction employers, who would then have to “buy” training from local FE colleges or training providers.
In addition, a construction employer taking on an apprentice via CITB will also receive money from the levy system, helping to cover the cost of the trainee being away from the workplace at college. Staged grant payments total £6000 to £10 250 over the lifetime of the apprenticeship. But this funding is in addition to the central government training cash.
An industry insider told CM: “The system would highlight how much government puts into construction training in comparison to the levy. It would also mean employers having to deal with a government system, as well as the levy system.
“When an employer gets an apprentice through CITB, they think they’re getting their levy money back, but that’s not the case – there’s a lot of government support as well.”
The BIS consultation, and the greater awareness of non-levy apprentice training cash it could bring, comes at a sensitive time for the CITB.
This week, the Cabinet office and BIS also launched their Triennial Review of the CITB, with a report setting out the outcome expected to be published next spring.
In a statement, the CITB said: “The Review team want to make sure that the industry has every opportunity to contribute to the Review. Some companies will be approached directly and there will be an online survey which will give any organisation or individual the opportunity to express their view.”
It’s unclear whether triennial review will include the likely switch to employer-managed funding.
Also this week, chairman James Wates PPCIOB told Construction News that the CITB board has held talks aimed at reforming the CITB’s governance structure to make the body more responsive to the industry’s needs. At the moment, its 20 members meet four times a year, with deputy chairman Judy Lowe the only woman on the board.
Wates said: “In being fit for the future, the organisation will be best served by a smaller, more diverse and better-skilled board that will set the strategic framework to address the industry’s skills and training needs.”
Another source said that parts of the industry are questioning whether the existence of the levy system provides any net benefit to the industry.
“When the Industrial Strategy for Construction was being prepared, there was research looking at the levels of training in construction and other industries, and no evidence that construction invests more than other industries,” he commented.
But the CITB has always pointed to strong support from the industry. The latest stakeholder consensus survey showed that 62% of employers support the continuation of the levy and grant system and 55% of indutry employers believe that levels of training within the industry would worsen if the CITB did not exist.
