A review of the case of a levy-grant scheme (LGS) in the UK construction industry

Abstract

A Levy-Grant Scheme (LGS) has existed in the UK construction industry since 1964 to provide financial support for companies undertaking training activities. Despite the support of the LGS for various training activities, notably apprenticeships, the construction industry continues to suffer from both labour shortages and an underinvestment in training activity when compared to other sectors in the economy. This situation raises the question as to whether a LGS is an effective means for supporting training activity. This paper thus presents an in-depth review of the case for and against a UK construction LGS. It is argued that the LGS on its own is insufficient to alleviate labour shortages and poor participation levels in training. Moreover, if the LGS is to continue enjoying the support of employers it is important that levy payers (in particular) see the value of the scheme as integral to their business activities and do not regard it as a mere tax. The demonstration of the real value of the LGS becomes imperative when considering the current economic climate where companies are working with tighter budgets. © 2010 The Vocational Aspect of Education Ltd.

Keywords

Author Keywords

Training policy construction Labour shortages Levy-grant

Index Keywords

Author Affiliations

Scott Sutherland School of Architecture and Built Environment, Robert Gordon University, Aberdeen, Scotland, United Kingdom

Department of Civil and Building Engineering, Loughborough University, Loughborough, Leicestershire, United Kingdom

Funding & Acknowledgements

Elmin Inkişafı Fondu, eif

Historically, there have been concerns about the level and quality of training in the UK economy, including the construction industry. The White Paper (1962, cited in Construction Industry Training Board 1998) entitled ‘Industrial Training: Government Proposals’ described training in the UK economy as ‘barely adequate and unsatisfactory’. It recommended that industrial training boards (ITBs) should be established in order to address the issue of under-investment in training. In 1964, the Industrial Training Act gave ITBs statutory powers to impose a levy in their respective sectors. The levy raised by ITBs was used to issue training grants to provide financial support for companies’ undertaking training activities. ITBs were abolished in the early 1980s with the exception of the CITB (Construction Industry Training Board – currently known as ConstructionSkills [CS]) and ECITB (Engineering, Construction Industry Training Board), which enjoyed overwhelming support from employers in their respective sectors. These ITBs therefore retained their statutory levy powers.

Ministry of Science and Technology, Taiwan, MOST

Historically, there have been concerns about the level and quality of training in the UK economy, including the construction industry. The White Paper (1962, cited in Construction Industry Training Board 1998) entitled ‘Industrial Training: Government Proposals’ described training in the UK economy as ‘barely adequate and unsatisfactory’. It recommended that industrial training boards (ITBs) should be established in order to address the issue of under-investment in training. In 1964, the Industrial Training Act gave ITBs statutory powers to impose a levy in their respective sectors. The levy raised by ITBs was used to issue training grants to provide financial support for companies’ undertaking training activities. ITBs were abolished in the early 1980s with the exception of the CITB (Construction Industry Training Board – currently known as ConstructionSkills [CS]) and ECITB (Engineering, Construction Industry Training Board), which enjoyed overwhelming support from employers in their respective sectors. These ITBs therefore retained their statutory levy powers.

References 10 References

1 An Examination of the Relationship Between Skills Development and Productivity in the Construction Industry, (2009)

2 Abdel-Wahab, Mohamed S., An exploration of the relationship between training grants and profitability of UK construction companies, International Journal of Training and Development, 12, 3, pp. 188-205, (2008)

3 Opportunity Return Office of the Governor of Illinois, (2004)

4 Education and Skills Survey, (2009)

5 New Entrant Training Report Consultative Document, (1993)

6 Industrial Levy Order Uk Parliament, (2002)

7 Construction Industry Trade Survey, (2008)

8 Employer Panel Consultation Research and Development Department Constructionskills Head Office, (2006)

9 Annual Report and Accounts 2007, (2007)

10 Employer Satisfaction Survey, (2007)

A review of the case of a levy-grant scheme (LGS) in the UK construction industry

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