Meeting the demand - interview with CITB chairman James Wates

For the last 50 years the Construction Industry Training Board (CITB) has been helping the industry to boost skills across the industry. Antony Oliver speaks to chairman, James Wates, about how the organisation is preparing for the future.

Antony Oliver
11 March 2015

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Since the 1964 Industrial Act came into force, employers in construction have been legally required to pay a levy to the Construction Industry Training Board to boost skills across the sector.

The CITB’s mission is straightforward as it works to “promote and facilitate the training of sufficient people, in the skills needed for a world-class construction industry”.  The levy on each individual person working in the industry funds this objective.

But times and industry practices change and for the CITB the key challenge is to stay relevant and useful to the needs of the modern industry. Hence the recent changes in the CITB’s organisation structure and in the way it will collect the levy in future.

“The industry has a very long tail of smaller firms who do a lot of training but it is not always front and centre on their agenda. The CITB gives the facility to invest in training." James Wates.

“Every three years we are subject to a consensus over whether or not the industry wants to continue with the levy and the last one [in July 2014] came back with around 80% in favour, which is good news,” explains James Wates, Chairman of the CITB.

“It is a levy for training and so you could say that the CITB is even more relevant today than when it was set up,” he adds. “But when it was set up it told the industry what training it needed and  what it was going to get. That is not the modern world – the industry is a customer so the CITB has to listen and respond to what it needs.”

So under Wates’ leadership the CITB is modernising. A new Chief Executive, Adrian Belton, has been brought in with a new executive team and a slimmed down board to work alongside an industry advisory council which provides input from the workforce.

The organisation is now also being rationalised under the single consistent CITB brand, removing the ambiguity of sector skills councils and other secondary brands to become a body that the industry can understand and work with in its “war for talent”, as Wates describes it.

This article first appeared in KPMG's latest Focus digital app for infrastructure building and construction which is now available and tackles the pressing issue of skill shortages in the industry. To download the app click here.

Most controversially the CITB is also changing the way it calculates the levy in an attempt to make it simpler and fairer. Under this new regime, which comes into force in 2017, the CITB estimates that 56% of employers will continue to pay the same amount, 28% will see a reduction with just 16% potentially seeing an increase in levy.

“The reason we have gone through the refresh of the levy is because we realise that something that is admin heavy is not good for small firms,” he explains. “It is not good for big firms either, but they at least have the capability to absorb it. And it’s tough because some people are going to be paying more but the vast majority will be paying the same or less.”

Wates emphasises that the grant system, whereby firms who train employees can claim back part of the cost of training, means that if firms train their staff they could in fact claim back more than they pay. “There will always be a vocal minority who doesn’t like paying the levy. All you can do is try to please most of the people most of the time and in the main the CITB does pretty well,” explains Wates.

“The industry has a very long tail of smaller firms who do a lot of training but it is not always front and centre on their agenda. The CITB gives the facility to invest in training and if you train staff then you get money back. If you don’t train then you will not,” he adds.

Currently the levy rate is 0.5% of payments on directly employed personnel (PAYE) and 1.5% of payments on labour-only sub-contractors.

The CITB Board approved the levy changes in July 2014 and, subject to Parliamentary approval in early 2015, the changes will be phased in by 2017, giving the industry “time to prepare” says Wates. And while he is, of course, braced for some push back over these changes, Wates remains focussed on tackling the bigger issue which is the very real lack of skills and resources available in the industry to meet the demands of an economy emerging from recession.  

“You can start on the tools or in the field and get right to the top. It is an industry that recognises and rewards talent." James Wates.

“At the CITB the challenge we faced going into the recession was persuading people of the need to continue investing in training and development,” he explains. “People were still paying the levy but were not reclaiming the grant - if people can’t see the workload ahead or the opportunity for an apprentice to complete their training, then they are not going to take them on. So pipeline is a very important thing and why we have been pressing government to complete its pipeline.”

The government’s recent commitment to a national infrastructure plan in the Autumn Statement is therefore very important he says. And although public sector spending accounts for just 40% of the total, this public sector pipeline has an underpinning role.

“You have to support apprentices through training over three years so the biggest barrier is for people to see that there is work ahead for them to do,” he says. “If not they will be paid off half trained and more than likely end up in the black economy.”

Yet even with this pipeline and the commitment to public and private spending across infrastructure and the built environment, Wates points out that the return to growth means it is still hard for firms to find time to focus on training.

“Everybody knows they should be training but actually they need skills now, so getting people to think about and plan for what they need in 18 months is hard. Breaking out of that cycle is a challenge. Particularly for smaller firms who are focused on doing the job now.”

Of course the industry’s challenge is not just about training existing staff but is also about attracting new recruits to replace the 400,000 lost during the recession and the 400,000 expected to retire over the next five-ten years. Critical, he says, is getting the message across that construction offers fulfilling careers to people from all walks of life, gender and ethnicity, and that means vocational opportunities as well as professional careers. And more, he says has to be done to clearly set out these career paths.

“You can start on the tools or in the field and get right to the top,” he says. “It is an industry that recognises and rewards talent – we need to get the message across that whether you are from the back of the class or from the front of the class, you can come into the industry and succeed.”

This article first appeared in KPMG's latest Focus digital app for infrastructure building and construction which is now available and tackles the pressing issue of skill shortages in the industry. To download the app click here.