Construction Industry Training Board: Funding

Stephen Timms Excerpts

Wednesday 4th February 2026 Commons Chamber

[The Minister for Social Security and Disability (Sir Stephen Timms)]

Let me start by congratulating my hon. Friend the Member for Exeter (Steve Race) on securing this debate and welcoming the interest in it. I also welcome the opportunity for the House to consider the reforms that the Construction Industry Training Board is making with the aim of strengthening the skills pipeline for the construction sector. As my hon. Friend rightly said, we need a skilled construction workforce in order to deliver the Government’s plan for change and our industrial strategy. That is the reason the Government are making a big investment in construction skills. We need, at scale over the next few years, a large volume of products from the construction industry. At the same time, as he said, we want to realise the good opportunity that the sector presents to provide many people with great careers, not least young people who are not on track for a rewarding career at the moment. There are a lot of possibilities in this sector.

Last March, the Government announced a £625 million construction support package to address the current acute shortage of skilled workers in UK construction. That package includes: a £100 million expansion in skills bootcamps, offering flexible short-term pathways into the construction sector for new entrants and for those looking to upskill; £90 million in additional funding for construction courses for 16 to 18-year-olds; a further £75 million for courses for those aged over 19 and either not in work or earning less than £25,750 a year; another £38 million for foundation apprenticeships; and £98 million to support industry placements for level 2 and level 3 learners undertaking an eligible construction qualification.

There is, in addition, a £140 million investment funded by the CITB and the National House Building Council, which could make available 8,000 more construction apprenticeship and job starts by 2029. A different £140 million has been committed by the Government to pilot, with mayoral strategic authorities, new approaches to connecting young people aged 16 to 24—particularly those who are not in education, employment or training—to local apprenticeships. That is not specific to construction, but we expect construction to be one of its major beneficiaries.

[Rebecca Smith]

I welcome the funding that the Minister has just outlined. Reference has been made to mayoral strategic authorities, but vast parts of the country do not have one yet and are unlikely to have one for some time. Indeed, my constituency and that of the hon. Member for Exeter (Steve Race) are in one of those regions. I am interested in how the funding will be delivered to where it is really needed in those smaller communities. At the moment, we have 124 training groups doing that, and ultimately they are best placed to know the workforce in their local areas. In those smaller communities that have not yet seen that devolution, how can we ensure that we do not see those skills just drop out of the bottom of the sector?

[Sir Stephen Timms]

I think on this topic there will be less difference across the Dispatch Boxes than was the case with the topic we debated yesterday. The pilots with the mayoral strategic authorities will try out new approaches, and the idea is that the successful approaches can be rolled out wherever appropriate, not just in areas with mayoral strategic authorities. I will come to the point about the training groups in a moment.

Similarly, we expect the construction sector to benefit from the expansion of the youth guarantee, backed by £820 million of investment over the next three years to reach almost 900,000 young people and support them to earn and learn. A great deal of investment is going into this area, and I agree with my hon. Friend the Member for Exeter that it is vital that we make the most of that for creating opportunities in local areas in every part of the country, including the south-west.

The CITB plays a central role in developing construction workforce capability and investing in skills training across England, Scotland and Wales. As we have been reminded, there is a separate arrangement in Northern Ireland. CITB is a registered charity and a non-departmental public body established in statute in 1964—apparently in July. It is sponsored now—following the transfer of responsibility for adult skills policy from the Department for Education—by the Department for Work and Pensions, with the purpose of improving training for people over school age who are working in the construction industry.

The Government set the strategic framework for the board. The board remains accountable to Parliament, but it operates at arm’s length, maintaining operational independence over how it meets industry needs. Its chair is Sir Peter Lauener, a distinguished former civil servant, but its board comprises by statute mainly representatives of construction employers. It is funded not by taxpayers but, as my hon. Friend said, through a levy on registered construction employers based on their payroll size.

[Richard Foord]

I am grateful to the hon. Member for Exeter (Steve Race) for calling the debate. I appreciate that CITB is at arm’s length from Government, but of course, 946,000 young people were registered as NEET last summer. Does the Minister share my view that money is better spent on organisations such as CITB than it is on welfare payments to young people?

[Sir Stephen Timms]

Certainly, it is absolutely right that the construction sector has a lot of promising opportunities for exactly those young people, and we need to ensure that they have the support to take them up. We also need to provide a social security safety net—I do not think it is one or the other—but I agree that the work of the CITB is vital in this area.

The CITB provides a wide range of services and training initiatives. It sets occupational standards, funds strategic industry initiatives to support Government missions, and pays allowances and direct grants to employers, as we have heard, that carry out training to approved standards.

In the five years since 2021, employer demand for CITB services has increased by 36%. Levy rates have deliberately been held steady to support construction businesses, given the very sharp cost increases that we are all familiar with that have arisen from global challenges that the industry has had to grapple with. As a result, the costs of CITB services now exceed levy income. In response, the CITB has announced the changes to keep the funding as tightly focused as possible on the industry’s core priorities, in particular on bringing apprentices and new entrants into the workforce to address skills gaps. There has been no cut in CITB funding, but there has been a reprioritisation to ensure that the available funding is used where it has the greatest impact. The CITB board has understandably identified an urgent need for efficiency improvements, to spend less money on bureaucracy in order to be able to spend more on training.

For many years, CITB training groups have supported businesses by securing cost-effective training through collective bargaining, and by helping firms with grant applications, facilitating workforce planning and sharing best practice along the lines set out by my hon. Friend. I put on record the Government’s thanks to all group training chairs and officers—not least my hon. Friend’s constituent, Peter Lucas, the chair of the Devon construction training group and, since 2023, the national chair of training groups. He and his counterparts have undertaken a great deal of important and dedicated work to meet employers’ skills needs. There are currently 80 training groups across England, Wales and Scotland—there was one other but it closed last year. I think perhaps the figure my hon. Friend gave was just for England.

[Steve Race]

indicated assent.

[Sir Stephen Timms]

The CITB has concluded that the training group model has significant limitations. It is quite expensive to run; each group receives an annual £35,000 support grant, as my hon. Friend said. Groups often operate on a closed-membership basis, and many groups charge employers annual fees. Groups do not have direct access to skills funding—employers must apply for grants. That limits scalability, diverts levy funding away from actual training into administration, and burdens employers, especially SMEs. My hon. Friend raised that important point.

The CITB has confirmed that funding for training groups will end on 31 March this year, so those £35,000 support grants will not be paid in the coming financial year. However, as my hon. Friend said, the CITB is replacing training groups with a newer model, with employer networks, which are designed to offer a more responsive, efficient and employer-led system. There are now 33 employer networks, which, between them, cover the whole of the UK—25 in England, five in Scotland and three in Wales. The decision to move in that direction has been made by the board of CITB, with its majority construction industry membership, following its consideration of how best to meet evolving industry needs and deliver best value for employers in return for their levy payments. It is not a decision for Government; it is a matter for the CITB board. It seems to me that the CITB has thought about this quite carefully, and I will set out the arguments that it makes.

The employer networks model was piloted in 2022, and the CITB board has concluded that it is effective. It argues that the model gives employers a simpler route to identify training needs and secure funding, avoiding the navigation of complex grant processes or funding applications. Networks are open to all levy-registered employers at no additional cost. They provide direct support from CITB advisers, significant funding contributions toward training and a dedicated training booking team. Instead of lengthy grant applications, employers work with a CITB adviser who helps to identify skill needs, arranges training and secures funding up front to cover a portion of the training costs. It is argued that that reduces the administration burden and makes training more accessible to employers. The idea is for networks to be designed around local need. Employers in each area collectively identify their priority skills needs—be they in traditional trades, digital skills, net zero capabilities or broader workforce development—and funding is directed accordingly.

The decision to replace training groups with employer networks is an operational decision for the CITB, which points out that its pilot has provided evidence that the employer network model is better. In 2025-26, networks have already supported 56,000 learners and 4,400 employers —up from 51,000 learners in the previous year. Training groups, by contrast, supported around 1,800 employers per year—less than half the number supported by networks—and growth was very limited. The average network supports 122 employers, while only five training groups supported more than 50 employers in 2024-25. Training groups cost £2.87 million in 2024-25, which is twice as much as the cost of networks, even though networks seem to support far more employers.

[Steve Race]

The figures quoted relate to networks and local training groups operating at the same time. Does the Minister accept there might be a risk that the people and organisations supported by the local groups are a different group from those supported by employer networks?

[Sir Stephen Timms]

My hon. Friend makes a fair point, but CITB’s view is that most employers that are members of training groups now access support through employer networks. He raised an important point about SME participation, which CITB reports is improving under the network model, reflecting the easier access and more direct influence that businesses have over local training priorities. CITB thinks that helps to reduce regional disparities, and provides more agile support for smaller firms. Indeed, it recently surveyed employers that had accessed support via employer networks, 87% of which were micro, small, or medium-sized organisations. Of those, 81% said that they were satisfied, and 54% said that they were likely to do more training in future because of employer network support.

My hon. Friend will readily acknowledge that meeting the current and future skills needs of construction employers is extremely important for delivering the Government’s aims, and important for opening up opportunities for the large number of young people, and others, left economically inactive over the past few years. The CITB’s view is that the employer network model is simpler, faster, more cost effective, and more flexible. In its view, it better supports SMEs—those employers that need the most support—and it allows the industry to respond quickly to emerging skills challenges, including digital and net zero construction skills.

Again, I am grateful to my hon. Friend for drawing this important matter to the attention of the House, and for his interest in it, and that of other Members. I understand that the chief executive of CITB, Tim Balcon, has written to my hon. Friend and invited him to make contact if he would like to discuss the matter further. I do not know whether he has taken up that opportunity yet, but if he does take up that offer and has further reflections in the wake of the subsequent discussions, I would be pleased to hear from him about that.

Question put and agreed to.