ConstructionSkills levy threshold rise will give more small firms access to training funds

More small construction companies should be able to offer free training to staff next year if Parliament agrees to raise the training levy paid by building firms.

A Bill to raise the threshold at which construction firms pay a training levy will go before Parliament in February. If enacted it means that small building companies with an annual wage bill of less than £76,000 won’t have to pay the levy.

This year the levy was payable by firms whose annual wage bill was up to £73,000.

Sector skills council ConstructionSkills – formerly the Construction Industry Training Board – collects the levy annually from eligible firms and uses it to fund grants to small companies who train staff. The council said small firms tended to train most new entrants to the construction industry and this benefited larger companies when they hired them.

The levy is calculated at 0.5% of the direct labour force wage bill and 1.5% of the value of payments for labour made to subcontractors. Some £152.3m was raised in 2006, £16.3m up on 2005, and helped fund training for 10,800 new entrants to the construction industry workforce who worked for firms who did not pay the levy.

According to ConstructionSkills the Bill to raise the levy usually goes through “on the nod” – unopposed and unamended – as long as it provides Parliament with evidence that the industry supports the charge. “We do this,” said a spokeswoman, “by asking the 11 construction employers’ federations if they support the levy. But in recent years membership of these bodies has fallen so we also consult employers who aren’t federation members.”

This research is carried out independently and it is said to have enough support this year to be passed unopposed.

ConstructionSkills said 75% of construction sector employers supported the levy and 63% believed training in the industry would worsen without it.

Currently, two-thirds of 48,000 construction employers registered as companies are exempt from paying the levy.

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