Construction Industry Training Board: Funding

Motion made, and Question proposed, That this House do now adjourn.—(Gregor Poynton.)

Since its establishment in 1964, the Construction Industry Training Board has been the industry-led and industry-funded training board for the UK construction industry. At present, it is an arm’s length body of the Department for Work and Pensions, so I thank the Minister for being here to respond.

The CITB was tasked, in its words, with ensuring a safe, professional, and fully qualified construction industry, and with addressing critical skills shortages. As Members will no doubt agree, some things do not change; indeed, we are grappling today with the very same challenges, as we commit to delivering new infrastructure and regeneration of our public realm, and as we face the need to build much-needed new homes right across the country.

The CITB has always been funded by the sector; legislation grants it the power to collect a levy from private construction firms. In return for this levy, the CITB’s role is to redistribute to sector firms the grants, funds and subsidies for training. This sector-wide approach has meant that skills are transferable, and that the cost of training is equitably shared between smaller and larger construction firms.

That is one of the ways in which the whole sector benefits. As all Members will know from having donned hard hats and visited construction sites, every project involves a huge range of large and small firms, including those that do bricklaying and carpentry, as well as electricians, plumbers and so on. Rarely, if ever, is any project completed solely by one large firm.

Just last Friday, I visited the St Michael’s Meadow housing development in my Exeter constituency to congratulate the site manager, Roy, and his trainee site manager, Sam, who have been awarded the seal of excellence in the NHBC Pride in the Job awards. While there, I also met Dylan and Reece, two carpentry apprentices, both of whom are reaching the end of their apprenticeship training with Barratt Redrow. One is heading directly into the specialist carpentry firm that Barratt Redrow works with on its projects. That is the way that the industry works, and the CITB has long reflected this in its engagement and, in particular, through its stewardship and funding for CITB local training groups.

I commend the hon. Gentleman for securing this debate. He is absolutely right on this. He has been an assiduous, committed and very industrious MP for his constituency, and I thank him for that. CITBNI is very similar to the organisation on the mainland to which he refers. It provides key support for some 6,500 apprentices over three years, and a 50% grant for net zero training. It is an absolute lifesaver for small contractors who can no longer afford the cost of apprenticeships, given that the cost of insurance alone for the apprentice is almost as much as their wage.

I thank the hon. Member for his intervention, and I hope the Minister will cover these points at the end. We are grappling with rising costs for construction firms, and we need to support them, as I hope we will, with CITB, in the future.

Does the hon. Member agree that losing the skills and expertise of local training groups, such as the Plymouth Construction Training Group, which was formed in 1977 and has been funded by the CITB, and instead having centralised delivery from CITB in London, would be a retrograde step that risks us losing local construction skills?

I thank the Member for her intervention. I fear that she might be right, and I will come on to some of those issues and the feedback that I have received from local training groups across the country, and from small firms.

Local training groups have been vital in supporting micro and small employers to form local networks, and helping them to forge closer ties. They provide those businesses with local, low-cost training options, and with a paid officer who holds a wealth of local knowledge and experience.

However, the national CITB has chosen to de-fund all 55 training groups across the country, close the network down and re-allocate funding elsewhere. This was brought to my attention by Mr Peter Lucas, a constituent who runs a carpentry business, and who has been the chair of the national training group chairs committee. He impressed upon me the importance of the good localised work that training boards have been doing. He told me that training groups connect employers with a really broad spectrum of training for the sector—everything from training on how to use a dust mask properly to master’s degrees.

Training groups work with schools and colleges to promote construction, offer talks and information about the sector, and signpost people to the appropriate apprenticeships programmes. They also save the CITB vast amounts of money on training courses, as training groups source them more cheaply than is done at national level. They meet up and exchange ideas and best practice across the whole of Britain, with everyone gaining more knowledge. Each training group has, until this year, been given £35,000 from CITB to fund their group training officer—money that comes from the levy that members of the training group have paid to the CITB. Without the grant, the training groups will likely close, and with the loss of the groups, vital local networks and local knowledge will be lost. Certainly, the local training group for Devon has been a success and is well-liked. Indeed, I applied for this debate not just because of the compelling case put to me by Mr Lucas, but also because of the outcry from local firms when I posted about my meeting on social media.

I thank my hon. Friend for giving way, and I congratulate him on securing this important debate. I wish to draw the House’s attention to my chairship of the GMB parliamentary group and my membership of UNITE the Union, both of which organise workers in the construction sector. Quality of employment is extremely important. Historically, the two construction engineering training boards had union representation, but over the years that representation has been squeezed away. Does he agree that employee and employer representation is very important on these boards?

I absolutely agree. It is only by trade unions, employers and workers working closely together that we can meet many of the challenges across the country. My hon. Friend reminds me that I should also declare my interest as a member of the GMB trade union.

Mr Cousins told me that the company has consistently relied on the training grant, which has historically been paid up front. Under the changes, the pre-payment has been withdrawn, and construction industry scaffolders record scheme courses can no longer be booked through the new employer networks. Apex remains committed to investing in its employees and supporting career progression, but a CISRS course typically costs at least £1,500 up front. There is also the wages paid to employees for the two weeks that they are attending training, and the impact of downtime on the company’s operations. The up-front training grant has always played a critical role in supporting cash flow for smaller businesses during the training process.

In part 2 and advanced training, employees must complete a portfolio and a two-day skills assessment before finishing the qualification. If companies are now unable to claim any funding until the completion of these stages, it will significantly reduce the number of individuals that companies like Apex are able to train.

I congratulate my hon. Friend on bringing this very important topic to the Floor of the House. Does he agree that anything that can be done to support businesses and employers in training young people must be done? When I visited my local college, Rugby college, I was informed that it is increasingly difficult to encourage employers to provide work experience time, particularly for T-level students, who need 315 hours. I wonder whether the Minister might reflect on any additional support that the Government can give to employers to incentivise them to do that.

I agree; we need to do everything that we can to make our commitment to getting two thirds of young people into education, training, apprenticeships or work a reality. We all need to work together on that.

Combined with the broader pressures that businesses are facing, these changes will seriously detrimentally affect Apex’s training capacity as a company. Apex and other companies that are committed to developing skilled, competent staff in their industries hope that the CITB will reconsider, given the impact that the adjustments may have on employers, and will explore ways to ensure that training remains accessible and sustainable.

A member of the Somerset Construction Training Group got in touch with me to say that these groups provide invaluable practical support to construction businesses and apprentices alike. In their words, removing CITB funding risks not only the future of the groups but the loss of highly experienced people whose knowledge of training, funding and compliance in the construction sector is difficult to replace. Ultimately, they feel that this could reduce access to apprenticeships, increase pressure on employers and negatively impact jobs in the industry. The group finished by saying that it hopes that CITB will reconsider and recognise the long-term value that training groups deliver.

Another Somerset business owner said to me that they have been fortunate to be part of the Somerset Construction Training Group for over 16 years. They have been provided with an excellent service, including quality training and last-minute training if required, and they have built a solid working relationship over the last 16 years with their training group officer, who understands their company and their training needs. The group enables networking between group members, and supports many aspects of their business. In their opinion, training groups were the best thing that CITB supported, and they are sad to say that their relationship with CITB is nowhere near as solid.

It is my understanding that, in addition to employer networks, the CITB is also seeking to redirect funding to the new entrant support team. I declare an interest: my father worked as a new entrant training officer. Does the hon. Gentleman accept that the new entrant support team is good value, and is perhaps a good place for this investment to be directed towards?

There is absolutely a case to be made here, but as I shall go on to say, the way in which this has come about is less than ideal, and it leaves lots of local training groups and local SMEs feeling pretty much left out to dry by the CITB.

Construction skills are critical to the success of Exeter’s economy and to our ambition to build the right homes in the right places for people to live in. I am proud that Exeter college is an outstanding tertiary college that offers a wide range of apprenticeships and vocational courses, and the University of Exeter offers a range of degree apprenticeships in partnership with business. As we work to meet this Government’s vital target of having two thirds of young people in university, college or an apprenticeship, we will need every organisation, business, sector and network pulling together.

I would be interested to hear the Minister’s view of the changes that the CITB has brought in, and whether he and the Department believe that those changes are aligned with our goals of increasing access to and take-up of apprenticeships and closing the skills gap across the country. Further, has he or the Department had conversations with the CITB on the changes, and has there been an impact assessment, particularly on the ability of SMEs to properly participate in the work of the CITB in this space? Finally, does the Minister agree that the CITB could perhaps have worked with the training groups over a longer period to improve the outcomes of the training groups, should it have felt that necessary, or to provide a platform to help them to transition to new models of funding, rather than a decision being taken to simply pull the funding with a mere four months’ notice? I thank colleagues across the House for their interventions, and look forward to hearing the Minister’s thoughts on this issue.

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.

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?

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.