Infrastructure Awards 2018

Build 2018 Infrastructure Awards 4 Womble Bond Dickinson Skills shortage in the construction sector By Solicitors Kara Price and Sarah Wales from Law firm Womble Bond Dickinson TheBuildersMerchantsFederation (BMF) has brushedoff claims fromother employers that the Government’s apprenticeship levy, introduced last April, is difficult to understand and use. TheBMFhas successfully launchedApprenticeshipsPlus includinganApprenticeship Training Agency to research and access apprenticeships for their members. reclaim their apprenticeship levy contributions as digital vouchers to pay for training apprentices. Smaller employers who do not pay the levy are also able to access the digital apprenticeship service and by 2020, all employers will be able to use service to pay for the training an assessment for apprenticeships. Is the apprenticeship levy working? The initial figures haven’t been too promising – between August and October 2017 there were 114,400 apprenticeship starts, comprising of 21,400 starts in August, 28,600 in September and 34,300 in October. These figures are significantly less than those reported at the same time in 2016, when there were 36,500, 74,400 and 44,800 starts respectively. This sharp decrease in apprenticeship starts highlights the need to reform the apprenticeship levy system, according to the Federation of Master Builders (FMB). According to Brian Berry, Chief Executive of the FMB: “The lack of flexibility in the value of vouchers which large employers are able to pass down the supply chain to smaller subcontractors who work for them is a key issue. At present, only 10% of vouchers are able to be passed down, however larger construction firms do not tend to directly employ large numbers of on-site tradespeople. This means that there is a real danger that these vouchers are not being spent on training the key skills that the industry so desperately needs.” How will the apprenticeship levy work alongside the Construction Industry Training Board levy? Around 1% of employers registered with the Construction Industry Training Board (CITB) (a non-departmental public body that reports The construction sector is in the grips of a skills shortage which is limiting construction activity and increasing labour costs at the same time. The shortage has recently hit its worst recorded level and it is expected to worsen over the coming years and decades, with the recruitment of new talent failing to keep up with the rate of retirement. The Chartered Institute of Building (CIOB) has reported that the industry will need to find 157,000 new recruits by 2021 in order to keep up with demand. One of the key ways in which the industry and the UK government are attempting to tackle this is through the recruitment of apprentices. Apprenticeship levy – background The government has committed to an additional 3,000,000 apprenticeship starts across all industries in England by 2020. From 6 April 2017, changes in apprenticeship funding were introduced and implemented meaning that funding of new apprenticeships will now come from an apprenticeship levy rather than taxpayers. The government’s objectives when implementing the levy were to boost productivity by investing in human capital, develop vocational skills and increase the quantity and quality of apprenticeships. The levy is set at a rate of 0.5% of an employer’s wage bill and is collected monthly via the Pay as You Earn (PAYE) mechanism. The levy applies to companies of all sizes with an annual payroll bill of £3,000,000 of more – less than 2% of UK employers. All levy contributions are paid into an employer’s online digital apprenticeship service account and the government also contributes to the levy with a 10% top up meaning that for every £1 that enters an employer’s digital account it gets an additional 10 pence. Employers in England (Scotland, Wales are Northern Ireland are currently excluded) can B 1 Company: Womble Bond Dickinson Website: www.womblebonddickinson.com/uk