Draft Industrial Training Levy (Construction Industry Training Board) Order 2022

Kirsty Blackman Excerpts

Tuesday 26th April 2022 General Committees

[Alex Burghart]

The hon. Gentleman asks a fair question. He rightly points out that, during covid, we reduced the burden on construction companies to help them get through the pandemic, and the order is a return to normal. However, it is only one part of the interventions we are making to create the next generation of people working in construction. I am pleased to say that apprenticeship construction starts are doing well and are above their pre-pandemic level. We are introducing new T-levels in construction and we see a real appetite for the skills bootcamps that the Government have brought in. Those short, intensive courses, which help people skill up over 12 to 18 weeks, with a guaranteed job interview at the end, are popular with potential employees, employers and, I am pleased to say, the Treasury.

[Kirsty Blackman (Aberdeen North) (SNP)]

On the point the Minister just made, if this order is just bringing us back to pre-pandemic levels, it is not doing anything to fix the immigration situation we have because of Brexit. I know there is a major problem for bricklayers, for example. Will this just get us back to pre-pandemic levels, rather than making up for that shortfall that we see as a result of Brexit and this Government’s immigration policies?

[Alex Burghart]

As the hon. Lady will have heard me say to the hon. Member for Chesterfield, this is just one of the things we are doing. Our bootcamps are a new innovation that offer people of all ages a rapid route into employment. The construction route was very popular. It is important that the hon. Lady sees this in the round. She raises Brexit, but in my seven months in this job I have had the great pleasure of talking to further education colleges around England, and many principals have told me that there is new enthusiasm from employers to look at skills training in their areas, which did not exist before we left the EU. Lots of companies used to advertise internationally for skills as their first port of call, and people came in. They did not have to invest in training in their own areas. I am pleased to say that that is changing for the better for young people in England.

The work of the CITB will support strategic initiatives to help maintain vital skills in the industry and create a pipeline of skilled workers.

--- Later in debate ---

[Mr Perkins]

It is a great pleasure to serve under your chairmanship, Ms Rees.

The Construction Industry Training Board has been instrumental in training the construction industry workforce since it was established in the wake of the Industrial Training Act 1964. The main reason for its creation was to address concerns about UK skills shortages at the time—an issue that seems more pressing than ever.

As Members may well be aware, since the CITB’s creation, the primary focus of the board has been to invest the money that it receives from the CITB levy in training and upskilling both the existing workforce and new entrants into the industry. It is essential, for both the construction industry and the wider UK economy, that Britain is able to attract the best new talent through the promotion of construction as an exciting and rewarding career.

I agree entirely with what the Minister said about the crucial importance of the construction industry; the fact that one of the biggest barriers to growth for the UK economy, and the construction industry in particular, is access to skilled labour; and the creation of an environment where young people feel that construction is a career that they can move into. Anyone who has sought to get any kind of building work done will know how difficult it is to attract a reliable, skilled workforce that is available, even for basic home improvements. That is even more the case within house building and other aspects of the construction sector, so this is a matter of supreme importance.

The CITB has been at the forefront of the implementation of T-levels for the construction sector, and of new frameworks for apprentices in the industry. I had the great privilege to visit both the HomeServe academy in Birmingham and the Steve Willis academy in Burgess Hill to see how apprentices in the sector are progressing and the wide range of opportunities open to those starting out in the industry. While there are a huge number of opportunities in the industry, there are still far too few people being giving opportunities to move into the sector, with HomeServe estimating that as many as 30,000 too few apprentices are coming through every year to keep pace with the growth opportunities and the retirements in what is an ageing workforce.

With the industry facing the twin challenges of an ageing workforce and the decline in migrant labour following Britain’s departure from the European Union, the role of the CITB—to make it easy for levy-paying firms to get funding for innovation and skills development —has never been more important. It has also never been more important for the Government to take a strategic view on supporting an industry that is largely based on subcontracted workers, and to recognise why we continue to have a huge skills shortage within the sector.

The Minister said a few moments ago that he has been speaking to further education colleges that have experienced many new employers getting involved in training, where previously they might have relied on migrant labour. That is great to hear. As he and the Committee will be aware, the Labour party was against the idea of Britain leaving the European Union, but is committed to making Brexit work in the best way that it can. One of the clear opportunities that exist as a result of the reduction in migrant labour—not only an opportunity, but an imperative for the UK economy—is to train up more of our own people to get into such sectors and to ensure that the route into developing a career in construction is as easy as possible. We are 100% behind that opportunity.

I have to say, however, that the Government are not strategic in developing those opportunities. There is much more that they can do. They have absolutely outsourced responsibility for skills policy to employers. Of course employers need to play a key role—they want to take these people on and need to be involved every step of the way on training—but the more the Government have put employers in the driving seat over the past 12 years, the more the skills shortages have grown. In a variety of sectors—the construction industry is no exception—we have seen a massive reduction in the number of people who are able to be trained up.

[Kirsty Blackman]

An awful lot of what we have talked about is focused on England, but CITB is national, over all these islands. The difference in Scotland is that we are doing some of the things that the hon. Gentleman is suggesting: we have Developing the Young Workforce, which is a partnership between the private sector and education, in an attempt to ensure that the skills that come through are those that are needed by business. DYW is now embedded in Scotland and is a good success story. I urge him and the Minister to look into what is happening with it, and to consider it as a basis for something that could go forward in England.

[Mr Perkins]

The hon. Lady is right that the devolved authorities in Wales and Scotland have innovated in some areas. I am conscious of some of those innovations, and am happy to learn more about them. I thank her for that invitation.

To turn to the draft order, we supported the levy rates being halved temporarily under the previous order to 0.175% on directly employed workers and 0.625% on taxable subcontractors, net of CIS—the construction industry scheme—to support businesses through the pandemic, at a time when workers were being furloughed and many works were being postponed and delayed, and when much less training was happening. It is encouraging that, as we return to some kind of normality, businesses across the sector are able to develop projects and developments, so we support the return to the previous level.

The Minister was right to say that the draft order is not the beginning and end of investment in construction skills, but a lot more needs to be done from a strategic perspective. The Government need to recognise that an industry that is largely focused on subcontracted work will often have everyone saying that training up the next generation is someone else’s responsibility. The idea that the sector will just do that itself if we get out of its way and give it the space to do so is optimistic at best, and arguably naive. That is what we have seen: not enough people are being attracted into the sector.

It is vital to ensure that the CITB is able to support such training needs over the next three years. That is why we support the return to the pre-pandemic levy rates. We need to ensure the right balance in the draft order between supporting businesses and the continued training and development of staff, while ensuring that smaller businesses are encouraged and not penalised, in particular when starting to get back on their feet post pandemic. Overall, the order largely does that, retaining the wage bill exemption threshold for the levy at £120,000. We think that that is sensible, given the challenges faced by business.

We need to ensure that there is a strong conversation between Government and the sector. The idea that it will simply take up the slack is not one that we agree with. It is important that the sector takes responsibility for ensuring that there is a strategic plan to attract the next generation, and that people at all levels and in all geographies are able to access it. My hon. Friend the Member for Wirral West made a powerful point in that regard: we need to make sure that in the smaller towns and areas without a big construction industry—perhaps those that have smaller amounts of new house building going on—people are able to access those opportunities, too.

As the Minister will be aware, there is still some resentment from larger employers that they are required to pay both the CITB and apprenticeship levies. It is therefore crucial that the CITB levy adds value to businesses and the wider construction workforce and, indeed, that it is seen to do so. Having diligently read through the CITB four-year strategic plan for 2021-2025—my speech says “scanned through”, but actually I read it diligently—I know that £66.9 million is allocated for other support.

With the need to ensure that the CITB levy is value for money, and in the interest of transparency, can the Minister tell us a bit more about what “other support” actually encompasses and ensure that the sector is aware of where exactly that money is going? There is also £2 million being spent on research. Can the Minister set out what sort of projects and research will be undertaken and how that will lead to more skilled workers in the future?

I note that although construction was one of the first three T-levels launched in September 2020, T-levels do not actually muster a mention in the four-year strategic plan. Can the Minister outline how T-levels fit into the CITB’s plans for the future of the workforce, particularly in terms of building pipelines for the next generation to enter the construction sector?

Since the introduction of the construction T-level, the Department for Education has added skills bootcamps and flexi-apprenticeships for construction. The Minister spoke about bootcamps a moment ago; I would be interested to hear how many people he anticipates going on those bootcamps over the four-year period and whether he believes that they are delivering on what Government expected.

The skills shortages are profound at the moment. On that basis, I question whether unpaid traineeships, in a sector that is already understaffed, are the most attractive way of attracting new people into the sector. Has the Minister given any thought to expanding the number of apprenticeships, rather than funding traineeship opportunities?

I welcome that the Government appear to have backtracked on their proposals to defund the majority of BTECs. Will the Minister update us on the future of BTEC routes into construction and provide us with a guarantee that businesses and those who want to work in the construction sector will be able to access those qualifications in the coming years?

As Committee members will be aware, the consequences of the fire at Grenfell are still deeply felt. It is important that lessons have been learned across the building industry. However, Grenfell and its aftermath are only briefly acknowledged in the strategic plan, with a reference to post-Hackitt and energy-efficient retrofits. Can the Minister reassure the Committee that future recruits and existing workers will be trained so that a mindset of ensuring safety and building sustainability is paramount in their thoughts?

As I stated earlier, the Opposition are content for the draft order to be passed, and we hope it will yield the results the Minister and the CITB hope for. However, we once again call on the Government to take a more strategic and hands-on role to ensure that there are more people to address the skills shortage. I look forward to hearing the Minister’s responses to my questions.