Engineering construction companies have backed an increase in the ECITB levy alongside a new skills plan to help steer industry through a critical time.
The Engineering Construction Industry Training Board (ECITB), the Government-sponsored skills body, asked all the companies that pay the industrial training levy to have their say on its new strategy and to endorse an increase in the levy.
The overwhelming majority of levy-payers voted in favour of the proposal. Three-quarters (75%) of levy-paying employers supported the ECITB’s new levy resolution, which includes increasing the offsite levy rate from 0.14% to 0.33%. The ECITB’s proposal will see the offsite levy increase phased in gradually, rising to 0.2% payable in 2021, 0.27% payable in 2022 and 0.33% payable in 2023. The site levy rate will remain unchanged at 1.2%.
The level of support for the proposals indicates engineering construction employers are fully behind the ECITB’s plan to address the critical challenges facing industry over the coming years, including an ageing workforce and the emergence of disruptive technologies such as Artificial Intelligence. These challenges must be met head on if the industry is to support the £600bn worth of infrastructure projects set to be built across the UK in the next decade.
ECITB Chair Lynda Armstrong OBE said: “I am delighted that industry has backed our levy proposals and this result is a significant vote of confidence in the ECITB. Our employers recognise the need to pull together as an industry to address the challenges set out in our new strategy.
“There is huge demand for high-quality training across our industry and an acute need to replace an ageing workforce and ensure we can attract enough skilled workers. With demand for training outstripping available funding, we need to increase the level of funding available if we are to continue to meet training demand from employers and support growth in the industry.
“This new mandate places us in an excellent position to build on our successful track record of driving skills improvements throughout the industry. We are determined to prove to all companies that are in scope that the levy provides real value in helping employers meet their current and future skills needs.”
The vote follows the ECITB’s previous levy consultation in 2016, where Government asked the Industrial Training Board to seek a new mandate from its levy payers in light of the introduction of the Apprenticeship Levy and the challenging operating environment facing many sectors.
The ECITB’s 2016 consultation proposed a temporary reduction in the levy rates for site and offsite workers for the period 2017 – 2019, alongside a commitment to maintain planned grant expenditure for training by drawing on financial reserves. However, growing demand for training in recent years, particularly for offsite workers – who currently make up 53% of the workforce – is now unsustainable. Last year, demand for training for offsite workers was more than double the amount of income raised through the offsite levy.
At the same time, the ECITB has taken significant steps to reduce its overhead and operating costs, which as of 2018 had fallen by £1.3m since 2016, while 99.4% of levy raised in 2018 went directly into supporting training. The ECITB is also improving its levy intelligence and collection methods to ensure that all companies required to pay the levy do and can make training claims as efficiently as possible.
The ECITB’s new three-year strategy, entitled Leading Industry Learning, sets out the training support required to create the workforce industry needs to compete globally – read it here: www.ecitb.org.uk/about-us/leading-industry-learning-strategy-2020-2022/
How levy-payers voted
Employers in the engineering construction industry vote on the industrial training levy every 3 years.
The current levy order will expire at the end of 2020 and employers have now voted on the ECITB’s proposal for the 2020 to 2022 levy periods.
The voting took place between 14th August and 18th October 2019.
- 75% of the levy-paying employers (paying 87% of the levy) supported the proposals
- 10% of the levy-paying employers (paying 6% of the levy) did not support the proposals
- 15% of the levy-paying employers (paying 7% of the levy) did not respond.
The levy resolution was voted on by 234 in-scope companies. All 3 engineering construction employer associations (ECIA, OCA and BCECA) have confirmed that their levy paying members are in favour of the levy proposals. Accordingly, all levy paying members (63 in total) of the employer associations are deemed to be supportive of the proposals. Furthermore, 112 of the 171 unrepresented employers confirmed their support for the proposal. A further 23 employers declined to support the proposals and 36 employers did not respond.