Draft Industrial Training Levy Order 2001

[back to previous text]

Mr. Ronnie Fearn (Southport): I have only one question for the Minister, unlike the many that we have heard so far, some of which may be answered. For what period is the levy charged when a company goes bankrupt—many small companies do, as well as some big ones—or goes into liquidation? I have read paragraph 10(2) under the heading ``Cessation of business'', but it is not clear. I should like to know how many days it is from the date of cessation, and whether the date is set on the bankruptcy document. In the case of liquidation, where a company can run for a few more months and sometimes years afterwards, when does the levy stop?

4.59 pm

Mr. Richard Allan (Sheffield, Hallam): I have a quick question on the learning and skills councils, which I hope the Minister can answer. We see in the notes that the Construction Industry Training Board generates an income from the training and enterprise councils and local enterprise councils of £21 million per annum. That will obviously change in the context of the learning and skills councils, as the income will come from them. Is it intended that it should come from the national Learning and Skills Council, or will there be some mechanism for top-slicing the budgets given to local learning and skills councils, and will those councils have to apply for grants directly to the Construction Industry Training Board? Clearly a new mechanism for funding is being established and I presume that a large sum of money will still go to the CITB under the new framework.

5 pm

Parliamentary Under-Secretary of State for Education and Employment (Mr. Malcolm Wicks): Several specific questions were asked by the hon. Member for Altrincham and Sale, West (Mr. Brady), which I shall attempt to answer as fully as possible. If, having looked at the record, I discover that I have failed to answer any of the hon. Gentleman's specific points, I shall write to him in detail.

The hon. Gentleman asked about enforcement. It is up to the training boards themselves to identify firms that fall within their scope. I am aware of border disputes and we remain vigilant on the issue. The boards carry out their work vigorously and always follow up any names notified to them. It would be unfair if one company had to pay a levy and a similar company down the road did not. That explains the vigour and rigour applied to this matter. The Construction Industry Training Board has been successful in improving levy collection to the tune of an extra £10 million last year alone.

There are some disputes, but relatively few. Out of 55,000 registered companies, only 122 appeals were received by the CITB against the 1999 assessment, and only 35 of them were referred to employment tribunals. In 2000, 326 companies were registered under the Engineering Construction Training Board, but no cases emerged.

I was asked how many employers failed to make their levy payments. The CITB has to pursue an average of 13,000 employers each year to recover outstanding levy. Over the past three years, an average of 475 companies went into liquidation or receivership. Taken together, that results in a levy loss of £2.4 million. I shall write to the hon. Member for Southport (Mr. Fearn) about the timing of liquidation because I do not have the detail to hand.

Mr. Brady: I am grateful for the figures on companies going into liquidation or receivership—a small percentage, but a significant number. Did any companies go into receivership because of the levy, or was that an incidental factor?

Mr. Wicks: I am afraid that I do not have any evidence to hand. I shall seek to establish whether a correlation is discernible or whether there is evidence of a causal effect. I apologise to the hon. Gentleman for not having the information to hand, but I shall write to him.

We are aware of the importance of protecting and enhancing the role of smaller companies. As with the levy rates, it is for the boards to determine, in consultation with employers, what exclusion level is to be proposed. It is an important issue, which I shall take up with the chairmen of the boards when I meet them later this year. The two training boards have different exclusion levels largely because of different wage rates and different firm sizes in each industry.

I was asked whether a company involved in training should be exempt. I take the point, but the rationale is that the levy funds are used to improve skill levels across the industry—often beyond the needs of individual firms. The hon. Member for Altrincham and Sale, West was clear about the rationale of the previous Conservative Government in continuing the training board regime. Both industries have mobile work forces, as he knows, and all firms will benefit over time from the availability of a collectively funded pool of trained people. Training boards should, and do, offer full support to a company that trains its own work force.

We all agree that there should be vocational routes of high quality for school leavers who are not conventionally academic and do not want to pursue academic careers. Those routes might lead to a career in either of these important industries. Through our policies—the new deal or the learning and skills councils—we hope to facilitate that transition. Many people much younger than 16 already have itchy feet and want to work in industry. For safety reasons, we cannot offer young people anything radical, but our ConneXions service for young people—the successor to the careers service—enables them to have an understanding of the importance of those industries.

I will explore any issues relating to the new deal and how it interfaces with the work of the training boards, and discuss it with the chairmen of the boards in due course. I should refer to the question of the overlap of funding between the LSCs and ITBs. As the ITB grants are fully funded by the levy, it would be unfair to prevent employers in those industries from benefiting from public funding available from LSCs. Much of that funding will be determined by the national Learning and Skills Council, although there is discretion at a local level. In some subregions, where construction and engineering construction are especially important, that discretion may be exercised in favour of those industries.

Both industries have national significance. In the months to come, we must ensure that a proper relationship exists between national training organisations and the emergent learning and skills councils. Only last week, we published a consultation document on national training organisations, in which we wanted to encourage all such organisations—not merely the two that we are discussing—to up their game in terms of training. That improvement will involve close collaboration with the Learning and Skills Council.

I apologise if I have failed to answer any detailed questions. I shall do so in correspondence, if necessary.

The proposals before the Committee relate to the construction and engineering construction industries, which are two of our most successful industries. The collective view of employers in those industries is that training should be funded through a statutory levy system to secure a sufficient pool of skilled labour. I welcome the remarks made by Opposition Members, and I am especially grateful for the lucid—if possibly too quick—contribution from my hon. Friend the Member for Hemel Hempstead (Mr. McWalter). The boards' proposals for their 2001 levy have the express support of the employers. It is not in dispute that they should be approved, so I commend the orders to the Committee.

Question put and agreed to.


    That the Committee has considered the draft Industrial Training Levy (Engineering Construction Board) Order 2001.



    That the Committee has considered the draft Industrial Training Levy (Construction Board) Order 2001.—[Mr. Wicks.]

Committee rose at nine minutes past Five o'clock.

The following Members attended the Committee:
Maxton, Mr John (Chairman)
Allan, Mr.
Austin, Mr.
Betts, Mr.
Brady, Mr.
Coleman, Mr.
Ennis, Mr.
Fearn, Mr.
Harman, Ms
Lammy, Mr.
McWalter, Mr.
Randall, Mr.
Wicks, Mr.

Previous Contents

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2001
Prepared 22 January 2001