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Public Bill Committee Debates

Draft Industrial Training Levy (Construction Industry Training Board) Order 2007



The Committee consisted of the following Members:

Chairman: John Cummings
Anderson, Mr. David (Blaydon) (Lab)
Cawsey, Mr. Ian (Brigg and Goole) (Lab)
Efford, Clive (Eltham) (Lab)
Hayes, Mr. John (South Holland and The Deepings) (Con)
Heyes, David (Ashton-under-Lyne) (Lab)
Jones, Lynne (Birmingham, Selly Oak) (Lab)
McIsaac, Shona (Cleethorpes) (Lab)
Mallaber, Judy (Amber Valley) (Lab)
Mitchell, Mr. Austin (Great Grimsby) (Lab)
Moon, Mrs. Madeleine (Bridgend) (Lab)
Pelling, Mr. Andrew (Croydon, Central) (Con)
Penning, Mike (Hemel Hempstead) (Con)
Rammell, Bill (Minister for Higher Education and Lifelong Learning)
Redwood, Mr. John (Wokingham) (Con)
Teather, Sarah (Brent, East) (LD)
Watkinson, Angela (Upminster) (Con)
Williams, Stephen (Bristol, West) (LD)
Jenny McCullough, Committee Clerk
† attended the Committee
The following also attended, pursuant to Standing Order No. 118(2):
Bellingham, Mr. Henry (North-West Norfolk) (Con)

Fourth Delegated Legislation Committee

Tuesday 27 February 2007

[John Cummings in the Chair]

Draft Industrial Training Levy (Construction Industry Training Board) Order 2007

4.30 pm
The Minister for Higher Education and Lifelong Learning (Bill Rammell): I beg to move,
That the Committee has considered the draft Industrial Training Levy (Construction Industry Training Board) Order 2007.
The Chairman: With this it will be convenient to consider the draft Industrial Training Levy (Engineering Construction Industry Training Board) Order 2007.
Bill Rammell: In moving the order, I apologise on behalf of the Under-Secretary of State for Education and Skills, my hon. Friend the Member for Corby (Phil Hope), who is, as I am sure that hon. Members want to know, progressing well.
The orders seek authority for the Construction Industry Training Board and the Engineering Construction Industry Training Board to impose a levy in the industries that they cover. Skills have never been higher on the economic, political or social agenda, and when the Chancellor commissioned a report from Sandy Leitch on the UK’s skills needs for 2020, the findings laid out a challenging picture—even with the significant improvements of the past decade, our skills base is, to put it bluntly, still not world class. If we are to succeed in an increasingly competitive global economy, we must increase and improve the levels of training in the workplace.
The Government continue to make major investments in training. This year, the Learning and Skills Council will fund further education and training to the value of £7.8 billion. Although the Government can set the right framework for success, however, employers must be in the driving seat if we are to equip the work force with the skills that employers need.
In his final report, which was published in December, Sandy Leitch made a series of recommendations, with the overarching challenge that the UK should aim to be a world leader in work force skills in the upper quartile of Organisation for Economic Co-operation and Development countries by 2020. He made it clear that if we are to achieve that aim, we cannot afford to neglect training in the workplace. Indeed, most of the 2020 work force has already left school, so we need an adult skills revolution to achieve that ambition. The Government are working with a range of stakeholders in considering how to take the Leitch recommendations forward, and our response and implementation plan will be published later this year.
In 2002, we established the skills for business network of 25 sector skills councils to ensure that employers have a strong, clear voice in influencing the provision of education and training. The network is beginning to deliver real benefits; it did that initially through the development of sector skills agreements, and it is now doing so through the establishment of national skills academies and the development of specialised diplomas. Recognising that, Leitch recommends establishing a new commission for employment and skills to relicense and empower sector skills councils and give them an enhanced role in driving up employer demand and investment, alongside a new adult universal careers service.
Where both sides of industry in a sector agree, we have already promised that we will help to set up a statutory framework for training, which is very much the subject of our debate. The two industrial training boards are models of the successful application of such frameworks. These non-departmental public bodies were set up under the Industrial Training Act 1982, and their role is to ensure that the quantity and quality of training are adequate to meet the needs of the industry that they cover. They provide a wide range of services, including setting occupational standards, developing vocational qualifications, delivering apprenticeships and paying direct grants to employers who carry out training to approved standards.
The CITB, in partnership with the Construction Industry Training Board (Northern Ireland) and the Construction Industry Council, operates as ConstructionSkills, the sector skills council for the construction industry. It developed one of the first sector skills agreements, which now underpins every facet of the CITB’s operations. During the past year, the CITB has maintained its position at the forefront of developments by developing and launching one of the first three national skills academies.
The Engineering Construction Industry Training Board does not meet the minimum size criteria for becoming an SSC in its own right. I am pleased to say, however, that it has received funding from the Sector Skills Development Agency to scope out its future role in the skills for business network, and discussions on the nature of its future relationship with the network are, crucially, continuing. The board’s status as a valuable sector body was further recognised in 2005, when it won an award from the Sector Skills Alliance Scotland as the most effective sector skills council or sector skills body in Scotland, which is an excellent example of what can be achieved by a levy-funded body.
The Industrial Training Act 1982 provides for a levy on employers to finance an ITB’s activities and to share the cost of training more evenly between companies in an industry. It is for the employer members of a board to make proposals for the rate of levy on the industry that it covers, and for the Secretary of State to make an order giving effect to the proposals. That is very much the purpose of the orders before us this afternoon, which give effect to proposals submitted to us for a levy to be collected by the CITB in 2007 and the ECITB in 2008. Both involve the imposition of a levy in excess of 1 per cent. of payroll on some classes of employer, and the Industrial Training Act 1982 requires such orders to be approved by an affirmative resolution in both Houses.
In each case, the levies are based on employer payrolls and their use of subcontract labour. For both boards, the proposals involve levy rates in excess of 0.2 per cent. with no exemption other than for small firms. In such cases, a levy order can be made only if the proposals are necessary to encourage adequate training in the industry and that one of three conditions is satisfied.
The first condition is that the proposals have the support of organisations representing more than half the employers who, together, are likely to pay the majority of the levy. The proposals from the CITB meet that condition. The ECITB proposals are supported by the industry’s employer organisations; however, those organisations currently represent slightly fewer than half the employers, although together those employers are likely to pay the vast majority of the levy. The first condition has, therefore, not been fully met for the ECITB. In that case, an order can only be made if one of the other two conditions is satisfied.
The second condition is that the order is made less than two years after the making of a former levy order giving effect to proposals in which the first condition was satisfied. An order was made in 2006 that had the support of the employer associations when they represented more than half the employers. Those employers also paid the majority of the levy. So, for the current proposals, the second criterion is, indeed, satisfied.
The 1982 Act requires ITBs to exclude small firms from the levy but does not set a minimum size threshold. Each proposal sets a level that the industry considers to be appropriate. Employers who fall below the threshold are not, however, precluded from benefiting from grant and other support from the boards, and many of them do so.
In the order before the Committee, the CITB proposes that both its levy rates should stay the same as those approved by the House last year. Therefore, the rates will be 0.5 per cent. of payroll for direct employees and 1.5 per cent of net expenditure on subcontract labour. Employers whose combined payroll and net expenditure on subcontract labour is less than £73,000 will not have to pay the levy. This is an increase from last year’s threshold of £69,000 accurately to represent wage inflation. The level equates to an employer who employs three people full time throughout the year, and on that basis 43 per cent. of employers come into this category. A further 22 per cent. of employers will not be assessed for or will not pay the levy for other reasons—for example, they are in their first year of registration with the CITB or they have ceased trading. This means that around 65 per cent. of employers will not actually be required to pay the levy.
The higher levy rate on subcontract labour is because, according to the industry, the vast majority of training is carried out by those employers with a directly employed labour force. Employers who opt to use subcontract labour tend to have a transitory arrangement with their subcontractors and are not normally involved in their training. It is encouraging to see the large contractors, who use significant amounts of subcontract labour, recognising their responsibility to contribute more than just cash to tackle the skill shortages in the industry. Through the CITB-ConstructionSkills programme-led pathways initiative, large contractors have initiated action to encourage firms in their supply chains to recruit and train apprentices, which is very welcome.
The ECITB likewise proposes to make no changes to last year’s rates. The rates for sites will therefore be 1.5 per cent. of total payroll and net expenditure on subcontract labour. Contractors whose combined payroll and net expenditure on subcontract labour is £275,000 or less will not have to pay the levy. The level is unchanged from last year and equates to an employer who employs 15 to 20 persons full time throughout the year. On that basis, it is expected that 40 per cent. of sites will be exempted.
Head offices whose combined payroll and net expenditure on subcontract labour is £1 million or less will not have to pay the levy. That level is also unchanged from last year and equates to an employer who employs around 40 persons full time throughout the year. It is expected that on that basis, 76 per cent. of head offices will be exempted.
Those proposals together are expected to raise between £160 million to £165 million for the CITB and £12 million to £13 million for the ECITB, which covers a smaller industry. It is worth pointing out that the CITB currently returns £1.88 in direct and indirect training support for every £1 of levy received—for the ECITB, the figure is £2.19—which is very good value for money.
The Committee will know from our annual debates that the CITB and the ECITB exist because of the support that they receive from employers and employer interest groups within their sectors. There is a firm belief that without them there would be a serious deterioration in the quantity and quality of training in those industries, leading to a deficiency in skill levels. That was confirmed by the reviews of both boards carried out by my Department in 2003, which found that the principle of the levy is still strongly supported in each industry. The boards’ own annual employer surveys also demonstrate continued strong support for the principle of a levy system.
At this juncture, I would like to pay tribute to the leadership of the CITB by Sir Michael Latham and Peter Lobban, and of the ECITB by Terry Lazenby and David Edwards. During the past year, they have continued to drive forward a very challenging agenda, and I wish to place on record my appreciation of their hard work and commitment. The draft orders will enable the two boards to carry out their vital training responsibilities in 2007, and I believe that it is right that the Committee should approve them.
4.42 pm
Mr. John Hayes (South Holland and The Deepings) (Con): It is an immense pleasure to serve under your chairmanship, Mr. Cummings, to speak for the Opposition on these matters and to have the opportunity to throw a bit of light on the fascinating subject before us. Before I do so, may I mention the Under-Secretary of State for Education and Skills, the hon. Member for Corby and send him the Opposition’s very best wishes, as we did last week? We are delighted to hear that he is making progress. We look forward to seeing him fully fit and back in the House and to clashing swords with him in an appropriate way.
The silver lining, however, is that the Minister has the opportunity to speak about this important statutory instrument. I agree with him that the best place to start in the consideration of the order is by briefly saying a word about Lord Leitch, who has reported on the matter. We have had the chance to read Lord Leitch’s report since we last debated these issues, which, as the Minister has said, confirms that skills matter. Skills matter for our national productivity and therefore our competitiveness, and they matter for the well-being of millions of citizens.
As Lord Leitch has argued, we have a skills gap compared with some of our principal economic competitors, and we need to invest in training to a much greater degree than we do now if we are going to meet that gap. In particular, Lord Leitch has argued that we will need to upskill and reskill the existing work force. As the Minister has said, so much of the 2020 work force is already over the age of 16. To reskill the work force, we need to look at the issue of investment, which brings us to the matter of levies.
In my judgment, one of the gaps in Lord Leitch’s report is that he did not explore some of the other options around levies. I make no definitive judgment about those things—I certainly do not have a dogmatic view or a policy—but one would have expected him to say a little more about the levies that we are considering today, such as whether they can be extended, whether a voluntary levy system can be put in place and whether there is anything that we can learn from them. I would have liked a greater exploration of those issues as well as an assessment of what fiscal measures might be put in place to encourage investment on the part of employers and of whether we might look at a voluntary licence to practise. Those are the kind of things that we need to debate as a House and as a country, and I hope that there will be an opportunity to do that in the not-too-distant future.
You know, Mr. Cummings, that the Industrial Training Act 1982 established industrial training bodies to ensure that the quantity and the quality of training was adequate to meet the needs of the industries that they established. The 1982 Act also contained provision for a levy on employers to finance industrial training activities and to share the cost of training more evenly between companies in the industry. It is for employer members of a board to propose a rate for that levy. The Secretary of State will make an order giving effect to those proposals, which is why we are all here on this annual occasion to consider the order.
As the Minister has said, the levy must have the support of organisations representing more than half the employers, and the order must be made less than two years after the making of a former levy order. The 1982 Act requires ITBs to exclude small firms from the levy, but it does not set a minimum threshold. The Minister is right to say that very small companies, including those in their first year of operation and those that no longer trade, represent a significant number of companies in each of the sectors. It is right that they should be excluded, but I will not tire the Committee by going into the reasons for that.
As the Minister has said, there are currently two ITBs covering the construction and engineering sectors, both of which offer a wide range of services and training initiatives, including setting occupational standards, developing vocational qualifications, delivering apprenticeships and paying direct grants to employers who carry out training to approved standards. In approving, or at least considering, the order, we have to look at whether the system is working, and it is right for us to consider that. My judgment is that for the most part, the system is working, but there are still big gaps to fill.
Kate Barker’s report on housing drew particular attention to the track record of the construction industry in areas such as consumer satisfaction, skills innovation and local acceptance:
“The industry needs to address its weak record of innovation and remove barriers to the take-up of modern methods of construction and off-site manufacturing.”
She went on to say that investment in skills needs to increase to produce higher levels of output in the future. That quote illustrates the fact that, notwithstanding the levy system, there are still significant problems within the construction industry with both the extent and quality of training and skills.
A report from the adult learning inspectorate, which was published last May, found that the construction industry’s own research indicates that there is an acute shortage of skilled craftspeople—there are 300,000 fewer skilled craftspeople than the industry needs for the contracts that are already planned. I think that the levies are working, but we need to do more. In particular, we need to look at how we can improve and extend the nature of training and the skills produced by training.
In preparing for this short debate, I note that the CITB itself has reminded us that 75 per cent. of employers support the continuation of the levy grant system and that 61 per cent. of employers believe that levels of training would worsen in the absence of that system. Therefore, there is still very wide support for the levies. We need to monitor the take-up of the payment of levies and the commitment to them, which is part of our responsibility and duty under the law. For the Opposition’s part, we will not be seeking to divide the Committee on the matter.
I know that the Committee would like me to go on, but I think that we have explored the matter in some detail. However, I have a brief comment about the changes to the system that will form part of the Further Education and Training Bill, so perhaps the Minister will say a word about that. Further to my remarks about the 1982 Act and the requirement for ITBs to demonstrate that the levy proposals are supported by organisations representing more than half the employers who are likely to be liable for levy payments—those organisations have traditionally taken the form of employer federations and trade unions—I wonder whether the Minister will say something about the increasing proportion of employers who are no longer members of such organisations and the difficulty that that creates in demonstrating consensus. I guess that is why the Further Education and Training Bill will allow support for levy proposals to be demonstrated by consulting more widely with the employers, whether or not they are members of representative organisations.
The simple question is that if the measures go ahead, will we weaken those representative organisations that play a role in organising training in the workplace and setting up apprenticeships? Will we implicitly weaken, therefore, the levy system that is promoted by those representative organisations? Would it not be better to encourage more organisations to join the representative organisations? And in responding to the change, are we going to exacerbate the problem? That question needs to be answered, and this seems to be an appropriate place to do it.
I also note that the current practice for ITBs is to make proposals for levy orders annually, as I mentioned earlier. However, the Further Education and Training Bill will make levy orders stand for a three-year period, and the Minister could take the opportunity to explain why that is the case. With those few remarks, I am delighted to reaffirm that I do not expect us to divide the Committee.
4.51 pm
Stephen Williams (Bristol, West) (LD): I apologise for the absence of my hon. Friend the Member for Brent, East, who is detained on education business elsewhere in the House. I also echo the comments made by the hon. Member for South Holland and The Deepings and the Minister about the Under-Secretary of State for Education and Skills, the hon. Member for Corby. When we debated world-class skills in Westminster Hall, a few references were made to the Under-Secretary’s absence. I am afraid that I was unaware at that point that he was ill, which is why I made no reference to it myself. I am happy to say that we wish him well. I understand that the illness is very similar to that suffered by my right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell), who has made a full recovery and has gone on to greater things, so there is definitely a hope for the Under-Secretary there.
I must admit that when the Whips office told me that I would be dealing with the Industrial Training Levy (Construction Industry Training Board) Order 2007, the words “thank you” did not immediately spring to mind. Of course, construction and skills are vital to our economy. Travelling into my constituency either down the M32 motorway or into Bristol Temple Meads, a plethora of cranes can be seen all over the city centre. They are reconstructing the Broadmead shopping centre, and rebuilding offices and homes around Temple Meads itself and in the Harbourside area around the city centre. About £1 billion of investment is going into construction in my constituency.
The hon. Member for South Holland and The Deepings has already referred to the Leitch report. The Minister knows that one of the weaknesses identified in the report is the voluntary nature of skills provision in many areas. However, the order is an example of planned employer statutory provision, and I wonder whether that model could be used elsewhere. Despite what the Minister has said, I assume that the order has the general support of the sector itself. I ask that because just as I was leaving my office at about 4.10 pm, a schedule from the British Chambers of Commerce was being opened—I am sure that we all get a wonderful selection of charts and pictures sent to us every week—containing a regulatory impact assessment listing 77 regulations, which I assume that it considers to be unnecessary. Lo and behold, item 28 is the Industrial Training Levy (Construction Industry Training Board) Order 2007. It seems that the British Chambers of Commerce thinks that the order is unnecessary.
The Chairman: Order. You ought not to use special aids.
Stephen Williams: Sorry, Mr. Cummings. I was referring to something that was received in my office. Item 28 on the chart specifies the very order that we are discussing today, and it is referred to as a “regulatory burden”. I assume that this is a regulatory burden that the industry is willing to bear. Indeed, paragraph 10 of the regulatory impact assessment states:
“The industry argues that without collectively-funded training, paid for by a statutory levy on all employers and administered by the ITB, there is a serious risk that insufficient training will be carried out to meet the industry’s skill needs. This could result in skill shortages, wage inflation and a less competitive construction industry.”
Clearly, different areas of this industry need to talk to each other, perhaps about the representations that are made on their behalf.
Like the hon. Member for South Holland and The Deepings—I must say that this is unusual in his case—I do not wish to detain the Committee for long. There is a building boom going on all around the country not only in my constituency, but in London. As part of their planning agreements, local authorities are often able to persuade or require people who obtain planning permission to undertake local labour schemes and training. I hope that the Government’s proposed reforms will not jeopardise that elsewhere, either in planning, with regard to the Barker report to which the hon. Member for South Holland and The Deepings has referred, or on other funding that comes from planning permissions.
My hon. Friend the Member for North Southwark and Bermondsey (Simon Hughes), who obviously spots which statutory instruments are being discussed by his colleagues, e-mailed me a short while ago to point out that Southwark, a borough under our party’s leadership, is also trying some innovative schemes to get local employers in the construction industry to engage in training their work force in order to meet our current skills gap.
I do not wish to detain the Committee, so, as long as the Minister assures us that the twin orders have the support of the industry, we are willing to support the orders, too.
4.56 pm
Mr. Henry Bellingham (North-West Norfolk) (Con): It is a pleasure to serve under your chairmanship, Mr. Cummings. I endorse what my hon. Friend the Member for South Holland and The Deepings, who speaks for the Opposition on this subject, has said about the Under-Secretary of State for Education and Skills, the hon. Member for Corby. I wish the Under-Secretary a speedy recovery and would obviously like to be associated with those remarks.
I should declare an interest, because the CITB has its headquarters at Bircham Newton in my constituency, where, as the Minister knows, the national construction college is based. I also want to put on record my tribute to and appreciation of Sir Michael Latham, who is a former Member of this House, the chairman of the CITB, Peter Lobban, who is a former Member of this House and the CITB’s chief executive, and all the senior staff, including Andy Walder and David Boyden, for their work and, indeed, for the work of all CITB staff in my constituency. They have had an unsettling time recently, but they have nevertheless stuck to their task in trying to deliver the skills agenda, which they do in such a dedicated fashion.
I support the principle behind the orders, which provide the power to raise the levy, but I take on board my hon. Friend’s point that they are conditional on the support of the industry. If that support from industry dries up or diminishes in any way, then obviously they would not carry the necessary credibility within the industry. There is widespread support for the levies at the moment, because the industries understand and realise the contribution that they make to promote the skills agenda.
The impact of the CITB and the National Construction college on west Norfolk is huge. Indeed, those organisations employ nearly 700 people in total, and the impact of that in such a remote rural area, where agriculture is obviously in decline, is enormous. There are roughly 500 people in the headquarters, who deal with administration, accounts, IT and, obviously, the levy. There are just over 150 people in the national construction college, including highly skilled lecturers, training personnel and other staff.
The Minister has rightly mentioned the skills agenda and the Leitch report, but the UK is truly able to boast of a world-class construction and civil engineering sector. It is a world leader that, at any time in the next year, will be working in pretty well every major country in the world employing British construction workers, personnel, senior staff and engineers. That is a huge tribute to what construction in this country has been able to achieve by building up that truly world-class sector.
As the Minister has said, 2012 is approaching, and given the significant amount of development that will entail it is even more important that we get the skills agenda right. Obviously, the Construction Industry Training Board and the NCC have an important role to play. I am pleased that the NCC has recently been made a national skills academy for construction, which means that it has further education college status in the eyes of the Learning and Skills Council. I will come to that in a moment, because it is relevant to one of the points that I shall make.
As for new developments at Bircham Newton, the Minister will be aware that it is a former RAF base. The student accommodation is made up of a number of accommodation blocks, some of which were built in 1927 and are now totally inadequate for the modern student. They do not pass muster in terms of health and safety and many other regulations. The facilities need upgrading—the swimming pool is very old, and the gymnasium is roughly 50 years old. The facilities at Bircham Newton require refurbishment and rebuilding, which is obviously very important in terms of this order.
The CITB put forward proposals for a large refurbishment and rebuild project, which was dependent on getting planning permission on the south-east side of the site for roughly 250 houses. That would have brought in about £15 million, which would have allowed significant refurbishment to take place, but the proposal was turned down. The board met recently and examined a number of options. The first two options would have resulted in the NCC being closed completely. The headquarters and other functions such as the levy operation would have remained at Bircham Newton, but if the NCC were closed, the administration and back-up jobs would probably lose critical mass. In that case, my grave concern would be that the jobs involved with IT, the levy and accountancy, which are fairly footloose, would move somewhere else, perhaps nearer to wherever the training was taking place.
The third option was to keep heavy training—non-transferable training involving heavy plant, cranes, steeple jacking and so on—at Bircham Newton. That would probably lead to a reduction by one third or a half in the number of jobs at the NCC and would still require quite a lot of extra funding. The fourth option, in the light of the planning refusal, would be to carry on with the full-scale redevelopment, but to try to raise the money from elsewhere. That option is the obviously the preferred option for my constituents, the local community and the local councils, and I would like to hear the Minister’s comments on it.
It might be possible for the CITB to get some more money out of the industry by way of the levy, but one must bear in mind that the levy is already placing quite a strain on a lot of small and medium-sized businesses. I know that there is small firms exemption and that the medium-sized businesses realise that the levy is vital for training, but if such firms were asked to pay substantial extra amounts, they might be unhappy about doing so.
Mr. Hayes: The Minister has rightly pointed out that the size of small companies that are exempted has been raised this year—there was a 10-year period when it did not increase. There is an argument about some of the small to medium-sized companies that are still paying the levy, and the Minister might want to pick that up when he sums up.
Mr. Bellingham rose—
The Chairman: Order. We ought to get back to the main subject.
Mr. Bellingham: Of course, Mr. Cummings, I hope that the indulgence that you have given me so far will be extended, so that I can make one or two further remarks. My hon. Friend has made the important point that the small firms exemption affects the levy, and I hope that the Minister will pick up on that in a moment.
I shall return to how the extra funding might be found. Obviously, the levy is one option, but what is much more likely is the possibility of getting money from the Learning and Skills Council. As I have said, the NCC now has the new status of a national skills academy for construction, and I hope that the LSC can make additional funding available as it now qualifies as a further education college.
I understand that Mr. Peter Lobben will be meeting Jane Clark and Phil Head from the LSC on Thursday. I hope that that meeting goes well and that the Minister will support the approach by the CITB to the LSC. The skills agenda is very important, and without the levy we will not get it. It is vital to protecting this world-class industry. If Bircham Newton construction college is downgraded, I have no doubt that the skills agenda in this country will suffer. Obviously, other routes are available for finding additional finance, and I hope that the Minister—
The Chairman: Order. I would like the hon. Gentleman to return to the subject.
Mr. Bellingham: I certainly shall, Mr. Cummings. I shall draw my remarks to a conclusion. You have been very indulgent, but you understand, Mr. Cummings—
The Chairman: I do.
Mr. Bellingham: I am sure that you understand that when a Member has 700 jobs at risk in their constituency, they will obviously feel passionately about it.
The Chairman: I am sure the hon. Gentleman will find other avenues in the House through which to address his concerns.
Mr. Bellingham: I shall not argue with you, Mr. Cummings; I shall bring my remarks to a conclusion.
The levy is vital to the future of the CITB. However, even with the levy helping the skills agenda, if the NCC closes or is downgraded significantly—either way, it will be undermined or closed—far more damage will be done to the skills agenda. I hope that the Minister will work with the CITB to ensure that a way forward can be found not only to protect my constituents’ jobs, but to ensure that training is maximised and flourishes in the future.
5.7 pm
Mike Penning (Hemel Hempstead) (Con): I am sure that the Committee will be pleased to hear that I shall not delay it for very long, because many of my points have been raised by my hon. Friend the Member for South Holland and The Deepings.
In his summing-up remarks, will the Minister provide some clarification on the skills gap, which is very large? My constituency has suffered enormously in recent months. Since the Buncefield explosion, there has been a skills gap for demolition workers in my constituency as we have tried to redress the damage done by the explosion.
One of the first meetings that I had when I became an MP was with a mother who brought her young son to see me. She said that she was ever so proud of the young fellow, who had not done particularly well at school, but who had passed the modern apprenticeship entrance examination. However, he could not find an apprenticeship scheme. I was hoping to hear from the Minister about how we can address that gap.
I can only speak on behalf of Hertfordshire, but between 1995 and 1996, when I investigated the figures for the area, 17,000 young people went through the skills examination in order to get on to an apprenticeship scheme, but just more than 3,000 young people actually qualified, which is very worrying considering the huge skills gap. If such a huge number of young people want to be trained, to undertake apprenticeship schemes and to dedicate much of their young lives to filling the skills gaps, which we desperately need to do, why did such a small number actually find apprenticeship schemes, especially given the size of the levy and the money coming through?
Are we sure that the levy is getting through to the front line? If there is a deterrent to businesses taking on young people in modern apprenticeship schemes, will the Minister enlighten the Committee about what the Government are doing about it? The situation seems very wrong. In my constituency, if one extrapolates out unemployment caused by the Buncefield explosion, unemployment is higher than it was in 1997, which is worrying—if the Minister does not believe me, he can look at the Government’s figures. The point is that there are young people who want to fill the skills gap and get on to apprenticeship schemes. Is the levy getting through to the front line? It is morally wrong if young people are not being given the training that they so desperately want.
5.9 pm
Bill Rammell: I shall not detain the Committee for long, because we have had a constructive debate and there is a strong consensus for supporting the continuation of the levies.
I shall start with the hon. Member for South Holland and The Deepings, who leads for the Opposition. He raised the point about the Leitch report and its views on voluntary levies. The report made it clear that in some sectors, collective measures such as levies and licences to practice can be effective. We have already promised that when both sides of a sector agree, we will help to set up a statutory framework for training. The film industry is undertaking that very process, which I strongly support.
The hon. Gentleman also made a point about the Barker review of housing. Again, we should be clear that the CITB has secured the commitment of the Home Builders Federation and the major home builders group to a major new initiative. Those programme-led pathways should contribute significantly to the continuing improvement in apprenticeship completion rates by providing college-based people with the opportunity to acquire on-site experience and thereby complete their apprenticeship framework. The establishment of a construction skills academy will also address the very concerns that the Barker review put forward.
The hon. Gentleman acknowledged that in terms of the way in which the industry has developed, the 1982 Act is, bluntly, outdated. Employers do not join representative organisations, because there is a much larger number of smaller employers. He also posed a reasonable question, asking whether, by attempting to change the 1982 Act, as we will do with the Further Education and Training Bill, we will weaken those representative organisations. I do not believe that we will. Through the changes in the Bill, there will still be an absolute requirement on the CITB and the ECITB to demonstrate real employer commitment. We recognise that in reality the structure of the industry has significantly changed, but if the levies are to continue to demonstrate real support, those changes are important.
The hon. Member for Bristol, West interestingly highlighted the way in which representative organisations of business do not always speak in accord with the views that individual employers genuinely put forward. He quoted the British Chambers of Commerce poster, which describes the levies as unnecessary regulation, but that is completely at odds with the view of employers involved in the structure of the levy. Through the processes that have been undertaken, it is clear that the majority of employers back the continuation of the levies, which is an important point.
The hon. Member for North-West Norfolk has taken a real interest in the NCC, which I acknowledge is a difficult issue. The funding of the NCC is for the industry to manage in compliance with the requirements of the 1982 Act, and given the difficult circumstances, the CITB is rightly reviewing the options that are open to it. The board met last Wednesday and decided to commission an internal study of the available options, which will report to the board in October.
Finally, the hon. Member for Hemel Hempstead rightly talked about the importance of tackling the skills gap and lamented the lack of opportunities for apprentices in his constituency. I am the first to acknowledge that we need to go further in ensuring that we work with employers so that more apprenticeships are available for young people and more mature people. If one looks at the record of the Government, one finds that we have tripled the number of apprenticeships in the past 10 years—if we face a difficult situation now, we faced an absolutely dire one 10 years ago.
We are not there yet, but we have set an ambition—Sandy Leitch’s report set out the ambition of making 500,000 apprenticeships available—and we are also talking about an apprenticeship entitlement. If the hon. Gentleman looks at the progress that has been made in his constituency, and throughout the country, in driving up the volume of apprenticeships and completion rates, he will find that the record is creditable.
This has been a constructive debate, and I hope that the Committee will support the orders.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Industrial Training Levy (Construction Industry Training Board) Order 2007.

DRAFT INDUSTRIAL TRAINING LEVY (ENGINEERING CONSTRUCTION INDUSTRY TRAINING BOARD) ORDER 2007

Resolved,
That the Committee has considered the draft Industrial Training Levy (Engineering Construction Industry Training Board) Order 2007.—[Bill Rammell.]
Committee rose at sixteen minutes past Five o’clock.
 
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