|What can you buy for £10m?|
|You could build a horse ‘monorail’ training track for starters.
Perhaps a mansion in the Cotswolds (or a one-bed flat in central London if you’re feeling optimistic).
Or 16,949,152 pints of milk, according to The Guardian.
£10m is also the amount the Health and Safety Executive has charged construction companies over four years to cover the costs of inspectors looking into H&S breaches, according to FOI documents obtained by law firm Clyde and Co.
More than £9.9m-worth of invoices were sent out to companies in the construction industry between 2012/13 and 2015/16 under the HSE’s Fee For Intervention (FFI) scheme, according to the documents.
Firms will receive an FFI invoice through the letterbox if HSE inspectors see a material breach of the law when paying you a visit.
You’ll be charged a fee on the amount of time an HSE inspector spends on identifying and dealing with that material breach – £129 per hour to be exact.
According to guidance issued by the HSE, these material breaches could be anything from not providing guards or effective safety devices to prevent access to dangerous parts of machinery, to leaving materials containing asbestos in a poor or damaged condition resulting in the potential to release asbestos fibres.
While most parts of the industry are fortunately well above such practices, there is still a great deal to be done. Almost one in two refurbishment sites failed to meet safety standards in targeted inspections last year.
It should be noted that there is a process for querying and disputing FFI invoices, and that the FOI figures do not tell us how much cash the HSE has actually recovered from construction firms through the scheme.
Regardless, fatalities and serious injuries still happen all too regularly on construction sites, and a zero harm policy means paying attention to small details.
The HSE’s £10m of FFI invoices should serve as a further wake-up call: not only are high safety standards a moral and legal imperative first and foremost, there’s also a heavy price to pay for those who fall short.
CITB to slash levy by a third
The industry training board told Construction News its board had approved a deal for the industry that would see the amount of levy paid by qualifying construction firms cut from 0.5 per cent of PAYE bills to 0.35 per cent from 2018.
The decision comes ahead of the CITB seeking a Levy Order from the government to allow it to continue to receive money from construction firms.
As part of the Levy Order process, the CITB is required to receive consensus from the sector that it should continue to collect levy from construction firms.
This process will take place between August and September this year, with a decision expected in February 2018.
Sources have told Construction News that the CITB faces one of its biggest challenges yet in persuading the federations and CITB levy-payers to back its continued existence, amid discontent with the organisation throughout the industry.
The new proposal for a reduced levy for nearly all firms across the construction industry will form a major part of the new deal offered to federations and levy-payers later this year.
Firms with a payroll under £80,000 will continue to be exempt from paying any levy. A rate of 1.25 per cent will remain on payments to Construction Industry Scheme (CIS) subcontractors.
CITB policy director Steve Radley said he hoped the new deal would improve the perception of the body ahead of it seeking consensus later this year.
“I think this helps us in three ways,” Mr Radley said.
“One is that we have listened to what industry has said. Secondly, it would be seen by most people as the fairer option because we are treating everyone the same.
“Thirdly, I think it gives us more space to work out what industry needs and work out what we aim to deliver.”
The organisation did admit that the proposals would lead to a reduction in the funds available to the CITB.
Mr Radley said that while he couldn’t give a definitive figure on the reduction in income, his early estimates were that it would mean a £25m drop in the levy funding available for the CITB. Current levy income is about £200m annually.
The CITB also confirmed that it would be aiming to increase efficiencies over the coming years and that the drop in income would not automatically mean a cut to the CITB’s services.
The organisation also expects some of the loss to be covered by “industrial growth” over the next couple of years, with the CITB expecting levy-payers’ wage bills to grow over the coming years.
The plan to cut the CITB levy is the culmination of months of work by its levy working party, which consulted with industry on the future structure of the levy.
The organisation was initially presented with four options last year, but these were whittled down to two before Christmas.
The other option up for consideration was a two-tiered system in which firms paying the government’s apprenticeship levy would have been given a reduced CITB levy rate.
The government’s economy-wide scheme will see all companies with a PAYE bill above £3m pay 0.5 per cent of anything above £3m into the government apprenticeship levy fund.
The CITB believes the new “reduction for all” approach represents the fairest and simplest option and ensures a clear distinction between the CITB levy and the government apprenticeship tax.
Mr Radley said: “The advantage with this option now is that when we start consulting industry from next month, we are not spending time debating thresholds and changing rates and anything that is complicated.
“The conversation will be, ‘This is the proposed business plan, this is the reformed grant scheme and this is how we would fund it through the levy: does this deliver value for money?’”
Construction News understands that federations and employers will be fully briefed on the changes this week.
FMB chief executive Brian Berry said: “The ‘reduction for all’ option will be welcomed by the vast majority of SME levy-payers who fall below the pay bill threshold for the government’s apprenticeship levy.
“However, it’s still not clear exactly which products and services the CITB will cut to allow for the reduced funding – we need to know that critical services will remain.
“Also, the CITB needs to do more than make the case for this levy option – the CITB needs to make clear its vision for meeting the skills needs of the construction sector and how the organisation intends to reform itself so it’s able to lead us there.”
|Will your construction firm be left facing huge bills as changes made to legislation 2 years ago start come into effect?|
|HMRC believes that if just 1 in 10 self-employed workers could be converted to PAYE they would receive an extra £1.5bn and have recruited 1000 new case workers to investigate employment status in the industry.
RIFT Legal Services has developed a free White Paper to take you through the motive and means for the government crackdown, the potential consequences for the construction industry and the steps you need to take to protect your company.
A damning independent survey claims the CITB has “little or no impact on its primary mission of encouraging the provision of training” among smaller construction companies.
Research conducted by YouGov on behalf of Hudson Contract showed only 9% of SMEs said they receive CITB funding for training employees.
And of that 9%, only half receive the full cost of training.
Hudson said SMEs pay twice as much levy as larger firms yet have less power to influence the CITB.
The survey also found that 60% of levy payers provide training without CITB grant funding.
Ian Anfield, Managing Director of Hudson Contract said: “Despite spending millions on websites, roadshows and PR, the CITB’s influence on training provision is negligible.
“In reality, the CITB is a hapless bystander while SMEs get on with the day job.
“More and more stakeholders are questioning whether there is a need for a levy and grant system at all. This needs an answer.”
Further results from the research show that:
- More than half of the firms interviewed have either no knowledge or no opinion of the CITB levy’s effectiveness in ensuring training and skills development.
- 71% say the possibility of a CITB grant to cover training does not influence decisions to send workers on a training course; and a mere 2% say a CITB grant is the main reason for training.
- 38% of firms would continue training even without the possibility of a levy grant.
Anfield said analysis of the CITB’s own accounts show that large businesses receive a 92% return on their levy payment, whereas small and micro sized businesses receive 61% and 52% respectively.
Of those who say that they find it difficult to claim back grants, 55% say that the reason for this is that they do not have an administrator to support them, while 50% say the process is too complicated.
Anfield added: “Training is absolutely vital if the construction industry is to thrive and deliver our country’s much needed infrastructure and house building programmes.
“As the backbone of the industry, SMEs play a crucial role in this.
“Yet not only is the CITB offering scant support to SMEs, it is actually putting obstacles in their way by collecting a levy and passing most of it on to major contractors.
“Those with the narrowest shoulders bear the toughest burden. That is bad for business and bad for the industry.”
Tony Willson, Managing Director of training adviser Helmsman Services, said: “Any company that moans about not getting Grant only has itself to blame.
“It is not that large companies are getting proportionately more Grant than smaller ones, it is that they do a lot of training and have processes to ensure that claims are maximised.
“Although the Grant Scheme is complex, if a company wishes to ensure that it is receiving the maximum Grant for the training that it does, there are many ways of obtaining assistance to achieve this from CITB itself, Training Groups or companies such as ours.
“But in many cases, the companies can’t be bothered.”
YouGov independently questioned more than 500 construction companies during the research.
Please also read the New Construction Advisor post as well.
The CITB and the construction industry have been given a final chance to prove why the industry levy – and the organisation – must be retained.
The government has commissioned Paul Morrell to carry out a review of the organisation.
Mr Morrell is an excellent choice for the role, and though I do feel the industry spends too much time reviewing and reporting and not enough time actually being heard, this particular research is needed andcould ensure long-lasting change in the industry.
On the back of the Farmer Review, and with a new levy order due in 2018, the CITB’s status must now be determined once and for all.
The skills debate is too important and the clamour for change is now reaching a crescendo.
If the CITB is the right organisation to work with industry on rectifying its skills issues, great. If not, let’s figure out what works better.
The CITB is an organisation that divides opinion. It is doing much to reform internally, and certainly publicising that fact, but doesn’t appear to be winning hearts and minds on the ground.
When we publish the CITB’s view of how it can improve and contribute in a more productive manner to the skills debate, I inevitably get emails criticising our decision to publish them.
Shortly after publishing a piece on the government’s decision to task Paul Morrell with a review of the organisation, this arrived in my inbox: “It would be interesting to know what real reform the CITB can think of; they are currently presenting ideas for tweaking around the edges at employer forums, which are not well received or even understood by audiences – but CITB being CITB they put out PR pieces such as ‘choose change’ but seem to be plodding on regardless.”
The positive in this review is that Paul Morrell not only has the respect of Whitehall mandarins, but has led his own review leading to significant change before: the Innovation and Growth Team’s 2010 Low Carbon Construction report, not to mention the first government construction strategy.
His recommendation that the government mandate BIM led to a step-change in the way the public sector procured projects.
The motive at the time (given that BIM wasn’t ‘new’) was that it should help to drive down costs and improve collaboration, something Mr Morrell may feel has been lost slightly in the ensuing BIMwash.
But the report got the ear of government and led to an acknowledgement they could demand more of the industry. Businesses then started to change their attitudes pretty quickly (I say ‘start’, as the process is by no means complete).
The Farmer Review has led to criticism in parts, particularly from developers. But today the skills minister referenced it when he announced Mr Morrell’s appointment.
This could be a watershed moment for the 54-year-old CITB and, in turn, the future of the construction industry.
The former construction advisor for the UK Government, Paul Morrell, has been selected to help undertaken a review of the industry’s training boards.
The recent publication of Mark Farmer’s ‘Modernise or Die’ study called into question the effectiveness and future role of the Construction Industry Training Board (CITB).
In his review, Mr Farmer stated the CITB was in need of wholesale reform along with its levy system, including a new mandate to properly fund and drive forward both appropriate skills development and innovation to suit a ‘modern progressive industry.’
With the new apprenticeship levy being introduced in April 2017, the new charge will impact larger construction companies currently in scope of the levies operated by the CITB and the Engineering Construction Industry Training Boards (ECITB). The report also asked whether market failures in construction still require a separate levy and grant system and if so, how this can operate alongside the apprenticeship levy
In addition, the ability of the UK construction sector to maintain and expand capacity was also questioned.
As an English chartered quantity surveyor and the former senior partner of Davis Langdon, Mr Morrell will use his expertise to help map out the future of industrial training boards.
Previously, from November 2009 to November 2012 he acted as the UK government’s first Chief Construction Adviser and helped produce the ‘Low Carbon Construction’ report in 2011.
Robert Halfon, Minister of State for Apprenticeships and Skills, said: “I am delighted Paul has agreed to lend his experience and advice to this important review. Paul is a highly respected figure both in the industry and in government and is known as a strong force for change and modernisation.
“The government’s ambitious infrastructure and housing plans require a step up in capability and capacity in the construction sector. Training boards can help deliver the skills we desperately need and I look forward to seeing some real recommendations from this review.”
Steve Radley, Director of Policy at CITB, said: “The Farmer report and this review raise a number of important questions about how to transform the performance and productivity of construction, and how CITB needs to reform to support this. It’s excellent news that Paul Morrell has been appointed to advise, as he knows the industry inside and out.
“We are working closely with government to ensure the review produces the right outcomes for industry, so that together we can help our sector modernise and grow.”
1. SAFER SITES TARGETED INSPECTIONS
Coming to a street near you
HSE construction inspectors will be carrying out unannounced visits to sites where refurbishment projects or repair works are underway.
This year the Initiative is being undertaken as a series of two week inspections across the country, beginning 3 October 2016 ending 4 November 2016.
During this period inspectors will ensure high-risk activities, particularly those affecting the health of workers, are being properly managed.
- risks to health from exposure to dust such as silica are being controlled
- workers are aware of where they may find asbestos, and what to do if they find it
- other health risks, such as exposure to noise and vibration, manual handling and hazardous substances are being properly managed
- jobs that involve working at height have been identified and properly planned to ensure that appropriate precautions, such as proper support of structures, are in place
- equipment is correctly installed / assembled, inspected and maintained and used properly
- sites are well organised, to avoid trips and falls, walkways and stairs are free from obstructions and welfare facilities are adequate
Where serious breaches of legislation are found then immediate enforcement action will be taken, but inspectors will also be taking steps to secure a positive change in behaviour to ensure on-going compliance.
Health and safety breaches with clients and designers will also be followed up to reinforce their duties under CDM 2015 and to ensure that all dutyholders with on site health and safety responsibilities understand and fulfil these.
Follow the SaferSites Facebook page to see what inspectors find on site and keep updated throughout the initiative.
Levy will slash apprenticeship funds, warns CITB
Government’s new levy could hit funding for apprentices by up to 30%
The government’s new apprenticeship levy could cut funding for construction apprenticeships by up to 30%, the CITB has warned.
The training body said the levy’s proposed funding bands would see funding for construction apprenticeships cut by 20-30%, and could put training providers off offering construction training.
Contractors could also be dissuaded from taking on apprentices if they have to make up any gap in funding, the CITB warned in a statement.
As part of the levy plans, new standards will be introduced for apprenticeship types with funding capped across sectors.
But while standards for some sectors have been approved by employer-led groups, no construction standards have been approved – a process the CITB said could take up to 18 months, meaning providers will have to use the existing framework, which is due to have its funding cut in April next year.
Firms will have to begin paying the levy from 6 April next year and will be able to start claiming funding from the following month.
In a statement, the CITB’s head of apprenticeships, Steve Hearty, warned the proposed funding bands “raise real concerns for the construction industry.”
He said: “We support the new, employer-designed standards, because we think they will improve the quality of apprenticeships, and it is encouraging to note that Government state these will be funded at a higher rate than those recently published.
“However, no standards for construction have yet been approved and we are still working under the existing frameworks system and may well continue beyond 2017.
“Even with the sector beneficial STEM increases to funding the Government’s proposed funding bands will cut funding for construction apprenticeships by between 20% and 30%.
“We are concerned that training providers could stop training or they could ask employers to make up the shortfall in cost, which might deter firms from taking apprentices on.
“We have shared our concerns with [the Department for Education] and will be doing formally through the formal consultation process that closes on 5 September. Employers can do the same.”
What does the apprenticeship levy mean for you?
Here’s what you need to know about the government’s new apprenticeship levy, the details of which have been revealed today.
All apprenticeship starting before 1 May 2017 will be funded through existing rules.
The new system has 15 funding bands. Each type of apprenticeship will be placed in a specific band, the caps for which range between £1,500 and £27,000 depending on the apprenticeship type.
The government will simplify the funding system for apprenticeship frameworks, which will no longer allocate funding based on the age or location of the apprentice.
Employers who will not pay the levy, or do not have sufficient funds to cover monthly training costs, will be required to co-invest 10 per cent of the cost, while the government will pay the remaining 90 per cent.
How co-investing will work
Employer chooses apprenticeship in band 9 with a maximum price of £9,000 Employer negotiates a price of £8,500 with their provider Government co-invests 90 per cent = £7,650 Employer co-invests remaining 10 per cent = £850 Employer and provider agree to spread this over 10 instalments of £85
Small employers (those with 50 staff or less) will not be required to contribute towards the cost of training apprentices, with the government covering the cost for care leavers or those in Local Authority Education, Health and Care plan aged 19-24.
Employers with apprentices aged 16-18, as well as those detailed below who have been in care, will receive an additional £1,000 and a further £1,000 to cover any additional training costs.
Employers should be able to use their funds in a digital account and benefit from government co-investment support to pay for training apprentices whose main place of work is in England.
Training providers will receive up to £150 a month from the government to support apprentices with learning difficulties or disabilities.
They will also receive £471 from the government for English and maths qualifications gained by apprentices.
Employers will need to show that individuals will gain “substantive new skills” in order to secure government co-investment in training.
Contractors will be able to transfer up to 10 per cent of their annual funds to subcontractors or other employers from 2018.
|Apprenticeship pathway||Level||Provisional max funding band value|
|Accessing and Rigging||2||£6,000|
|Applied Waterproof Membranes||2||£6,000|
|Built Environment and Design||3||£6,000|
|Civil Engineering for Technicians||3||£9,000|
|Construction and Building Services Management and Supervision (Sustainability)||4||£12,000|
|Construction Contracting Operations||3||£9,000|
|Construction Site Management||6||£12,000|
|Construction Site Supervision||4||£12,000|
|Decorative Finishing and Industrial Painting||2||£6,000|
|Foundation Degree in Architecture||5||£12,000|
|Foundation Degree in Built Environment||5||£12,000|
|Foundation Degree in Civil Engineering||5||£12,000|
|Foundation Degree Professional Practice in Construction Operations Management||5||£12,000|
|Geomatics Data Analysis||3||£9,000|
|Insulation and Building Treatments||2||£3,500|
|Management Quantity Surveying and Commercial Management||6||£12,000|
|Occupational Work Supervision||3||£5,000|
|Property Maintenance Operative||2||£9,000|
|Science Industry Maintenance Technician||3||£27,000|
|Specialist Concrete Occupations||2||£5,000|
|Steelfixing Occupations Major Projects||2||£9,000|
|Town Planning Technical Support||3||£9,000|
|Transport Planning Technician||3||£12,000|
|Wall and Floor Tiling||3||£9,000|
|Wall and Floor Tiling||2||£5,000|