Draft Human Medicines (Amendment) Regulations 2026
(1 day, 9 hours ago)
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The Parliamentary Under-Secretary of State for Health and Social Care (Dr Zubir Ahmed)
I beg to move,
That the Committee has considered the draft Human Medicines (Amendment) Regulations 2026.
It is a pleasure to serve under your chairmanship, Mrs Harris.
In response to the covid-19 pandemic, multiple temporary amendments were made to the Human Medicines Regulations 2012 in autumn 2020 to enable the roll-out of the covid-19 and influenza vaccination programmes. Those amendments were extended in 2022 and 2024 following public consultation, and are due to lapse on 1 April 2026.
This instrument will retain several provisions within those regulations as permanent legislation and expand them to other vaccines. It is designed to build on the benefits that the amendments have provided to date, as well as the wider lessons learned during the pandemic and in recent polio and measles, mumps and rubella vaccine catch-up programmes. It will support the safe supply, distribution and administration of a wider group of vaccines, helping the ongoing development of a vaccination system that is fit for the future.
I will briefly set out what each of the regulations does. Paragraphs (1) and (2) of regulation 3A enable trained healthcare professionals, or staff under the supervision of trained healthcare professionals, to conduct the final stage of assembly and preparation of covid-19 vaccines, without additional marketing authorisations or a manufacturer’s licence being required. That enabled the bulk assembly of covid-19 vaccines during the pandemic. Given the more targeted approach of recent covid-19 vaccination campaigns, this instrument allows the provisions in paragraphs (1) and (2) of regulation 3A to lapse from 1 April this year.
Paragraphs (3) and (4) of regulation 3A permit holders of a wholesale dealer’s licence who do not hold a manufacturer’s licence to re-label covid-19 vaccines to reflect changes in shelf life resulting from product thawing. This instrument retains those provisions as permanent legislation, and expands them to include any vaccine against any infectious disease. That will enable a more efficient use of the capable vaccinator workforce, and will support further flexibilities in our supply chain.
Regulation 19 allows covid-19 and influenza vaccines to be moved between different NHS service providers at the end of the supply chain, without the need for a wholesale dealer’s licence. This instrument retains those provisions as permanent legislation, and expands them to include any vaccine against any infectious disease, with relevant safeguards to regulate its use. That will ensure that vaccines can be rapidly deployed in exceptional circumstances in response to public health needs.
Regulation 247A enables the use of an extended workforce who are legally and safely able to administer covid-19 or influenza vaccines without the input of a prescriber, using an approved protocol. This instrument allows regulation 247A to lapse from 1 April 2026, and introduces a new, permanent provision—regulation 235A —to continue the use of an extended vaccinator workforce through the introduction of a vaccine group direction. That will support the use of an extended workforce to administer any vaccine against any infectious disease where directed by a national body, and will ensure that the UK has the necessary agility and flexibility in its workforce to deliver those vaccinations.
Regulation 233 enables persons lawfully conducting a retail pharmacy business to deliver covid-19 and influenza vaccination services off their registered premises, under a patient group direction. This instrument expands that provision to include any vaccine against an infectious disease. Additionally, to enable those services to continue after paragraphs (1) and (2) of regulation 3 lapse from 1 April this year, this instrument amends regulation 3 to enable pharmacists to prepare or assemble medicines for a patient in the course of their treatment without a manufacturer’s licence. That will ensure that community pharmacies can deliver vaccination services off their registered premises, enabling them to deliver targeted outreach programmes.
Schedule 17 introduced a category of occupational health vaccinators, who are permitted under the written directions of a doctor to administer covid-19 and influenza vaccines as part of an NHS or local authority occupational health scheme. This instrument amends the list of professionals able to deliver OHS vaccinations, aligning it with the professionals able to supply medicines under a patient group direction. In addition, it expands the scope of schedule 17 to cover any vaccination or immunisation offered as part of an OHS. Those changes will improve access to vaccines for staff within and beyond the health and social care sector, protecting them in the vital roles that they do.
In developing this statutory instrument, from 5 September to 28 November 2025, the Government conducted a public consultation on our proposals, hosted by the Department of Health and Social Care for England, Wales and Scotland, and jointly with the Department of Health for Northern Ireland, as medicines regulation is a transferred matter in Northern Ireland, and a reserved matter in Scotland and Wales. The consultation received 218 responses, from organisations and individuals sharing professional and personal views, the majority of which were supportive of the proposals.
We received many positive comments about how the flexibilities within the regulations have helped to increase access and efficiency across the system, while effectively utilising the workforce that came into place to deliver covid-19 and influenza vaccinations following the covid-19 pandemic. The consultation posed 15 questions on the technical aspects of the regulations, and we saw broad agreement on each of those proposals. Given the technical nature of the questions and the limited time the Committee has to discuss this instrument, I will not provide an immediate analysis of each response here; however, the published Government response can be accessed on the gov.uk website.
This instrument builds on the successes of the large-scale vaccination programmes during the covid-19 pandemic to support patient safety, improve access to and availability of vaccines, and ensure that the vaccine system continues to innovate. The changes will implement improvements that will help to facilitate the shift from “sickness to prevention”, as described in the Government’s 10-year health plan, helping to restore trust in vaccinations and ultimately increasing vaccine uptake.
Regulations 3 and 8 will enable community pharmacies to play a bigger role in prevention by expanding their role in vaccine delivery and enabling targeted outreach in areas where health inequalities remain pervasive, and where evidence indicates that doing so is clinically appropriate and value for money. The changes will support the delivery of commitments on vaccination and immunisation frameworks in Scotland and Wales, and an instrument will be laid in the Northern Ireland Assembly in parallel to these regulations, to deliver changes to the vaccination system across the United Kingdom.
To conclude, the instrument makes changes that will permanently support the safe supply, distribution and administration of a wider range of vaccines, and the proposals were supported by the majority of respondents to our consultation. I therefore commend the regulations to the Committee, and hope that hon. Members will support them.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
It is a pleasure to serve under your chairmanship, Mrs Harris. The Opposition do not intend to divide the Committee on these regulations, as anything that improves trust in medicines and vaccines is important. We need to increase the uptake of vaccines; it has fallen gradually and continues to fall, and we need to reverse that.
I have a couple of technical questions. As the Minister said, the principle behind the amendment to regulation 3 of the 2012 regulations is to make prescribing pharmacists equivalent to doctors and dentists. However, regulation 3(8) currently refers to,
“another doctor or dentist…of the same…practice.”
Given that pharmacists will now also be included, should that be amended to “another doctor, dentist or pharmacist”, or “a doctor or dentist”?
Regulation 5 redefines an “occupational health vaccinator” and refers to a list in part 4 of schedule 16 to the 2012 regulations. That significantly broadens the list to include individuals such as speech and language therapists who are not accustomed to dealing with injectable medications, but appears to exclude operating department practitioners, who, as the Minister will be aware of from his practice, are used to dealing with injectable medications. Could the Minister explain the reason for removing those practitioners from the list?
Regulations 8 and 9 talk about the vaccine group direction. The patient group direction is essentially a group prescription, where a clinician signs off the circumstances in which medication—say, paracetamol —may be given by a non-prescriber. We had such a direction for the covid-19 vaccine during the pandemic. This vaccine group direction would be different, so why does the Minister feel that we need a different process to the patient group direction that is already available for vaccines, which are prescription medicines? Instead, those directions can be signed by someone who is not a clinician—such as a manager in the Department of Health or, in fact, a private company—and they do not need to have any clinical skills or qualifications at all. A clinician, or one of the people listed, must decide whether the conditions have been met, and they can then give the patient the medicine without having prescribed it.
I want to ask a couple of questions on this issue. How does that improve trust, when we have a vaccine-sceptic population and lots of material on social media, some of which is not entirely accurate? How does allowing a prescription to be written by someone with no clinical experience help with trust and those rates? Is there a plan to contract out vaccine provision to the private sector, because that is what this provision allows for? Who is ultimately responsible? Is it the non-clinician who signs the vaccine group direction? Who is the clinician ultimately responsible for the decision to give the vaccine in the event that someone has an allergic reaction or an adverse reaction of some other type?
Dr Ahmed
I am grateful to the shadow Minister for her support; she is a learned Member of this House, and I know she takes these matters extremely seriously both here and in her own clinical practice.
She raised a technical point on whether the sub-paragraph should include the word “pharmacist”, given the updating of the regulations—I am very happy to explore that further to ensure that the wording is optimal. I also want to reassure her on the point she made about the workforce; training and a governance framework will be set up by the UK Health Security Agency, which will oversee all of this. Whether it is an operating department practitioner or anyone else, there will be a basal level of training that can reassure all Members of this House, whether we are the clinician prescribing the vaccination or the citizen receiving it. This will be overseen very tightly by the UKHSA.
Dr Johnson
Before the Minister moves on, can I just ask him why ODPs appear to have been removed from the list?
Dr Ahmed
I am not clear on why they have been removed from the list. However, I certainly expect that anyone who is reasonably trained will be able to deliver vaccines in the settings that we have proposed, which include community hospitals and everywhere in between, when we need to think about hard-to-reach communities.
The shadow Minister also asked a question on vaccine group direction versus patient group direction. The primary difference is that the VGD allows for the separation of the decisions to treat and provide consent by a registered healthcare professional, which still need to exist, from the administration of the vaccine, which is then done by a separate individual. That is not possible under a PGD, so it is about separating the roles. However, I reassure her that the consent process in prescriptions is paramount, and she is right that it must continue to be if we want to invite people’s confidence in the vaccination process.
Dr Johnson
Can the Minister confirm that the vaccine group direction—unlike a patient group direction, which ultimately needs to be signed by a clinician—would not need to be signed by a clinician, and can instead be signed by a senior manager either within a company or department?
Dr Ahmed
I will clarify that for the shadow Minister, but we are both cognisant of the wider point that clinicians ultimately take responsibility for prescriptions and informed consent of the vaccination process, and that will still continue. Healthcare professionals will still be seeking consent for treatment; the VGD simply means that they can be separate to the person who is then administering the vaccine in practice. There is no suggestion that there will not be clinical oversight or governance of this process—it is quite the opposite. This provision is designed to tighten governance frameworks and make them more transparent.
As I set out at the start of the debate, the proposed amendments aim to support the ongoing development of a vaccination system that is fit for the future. They are designed to build upon the benefits that HMRs have provided to date, as well as wider lessons learned during the pandemic, including recent polio and MMR catch-up programmes. In amending these regulations, the Government are seeking to maintain important safety measures while also increasing the effectiveness of the system’s supply chains and workforce in vaccination programmes.
The science unequivocally tells us that, after clean water, vaccination is the most effective public health intervention for saving lives and promoting good health. It is therefore a solemn duty of this Government to do all we can in this space to support the health system’s ability to deliver vaccines for all those eligible and, in turn, help support vaccine uptake. Given the overall support of the proposals in the consultation, and the ongoing need to support the continued safe and effective supply, distribution and administration of vaccines both now and in future, it is our intention to make permanent the provisions discussed during the debate. I commend the draft regulations to the Committee.
Question put and agreed to.
Draft Electricity Supplier Payments (Amendment) Regulations 2026
(1 day, 9 hours ago)
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The Minister for Energy (Michael Shanks)
I beg to move,
That the Committee has considered the draft Electricity Supplier Payments (Amendment) Regulations 2026.
It is a pleasure to be in this Committee this afternoon, Sir Alec. The statutory instrument, which was laid before the House on 2 February 2026, amends regulations concerning the levies used to fund the operational costs of the Low Carbon Contracts Company and the Electricity Settlements Company. The LCCC administers the contracts for difference scheme on behalf of the Government under the Energy Act 2013. Under the same Act, the LCCC also administers schemes modelled on the CfD scheme, including the dispatchable power agreement and the low-carbon dispatchable contracts for difference.
The LCCC acts as the revenue collection counterparty for the regulated asset base for new nuclear under the Nuclear Energy (Financing) Act 2022. It is anticipated that, subject to future policy decisions and the will of Parliament, the LCCC will conduct additional work to support Government under the Energy Act 2013. That includes work on a new scheme supporting the deployment of large-scale bioenergy with carbon capture and storage, as well as work related to proposals by the Department for Energy Security and Net Zero to support nuclear generation and around potentially supporting landfill gas generation. The ESC administers the capacity market scheme. Those schemes will incentivise the significant investment that is required in our electricity infrastructure, keep costs affordable for consumers and help to deliver our clean power mission while delivering on energy security.
In terms of the existing schemes, CfDs provide long-term price stabilisation to low-carbon generators, allowing investment to come forward at a lower cost of capital and therefore at a lower cost to consumers. The most recent CfD auction—the seventh that we have had—secured a record 14.7 GW of new clean energy capacity across Great Britain, making it the most successful renewables auction in the country’s history. It brought forward a diverse range of renewable technologies while delivering a good deal for bill payers. The LCCC is currently signing the 197 CfDs with projects that were successful in that auction.
Under the Energy Act, DPAs are agreements modelled on CfDs. They have been designed to instil confidence among investors for power carbon capture and storage projects and to incentivise the availability of low-carbon, non-weather-dependent dispatchable generation capacity. The LCCC signed its first DPA on 19 November 2024, which related to the Net Zero Teesside power project. That pioneering project in the north-east aims to build the world’s first commercial-scale gas-fired power station with carbon capture and storage. Over the next three years, the LCCC is expected to sign additional DPAs, which will drive the private sector investment required to bring forward further power carbon capture and storage projects by the mid-2030s. The LCCC will be the counterparty for those, and funds have been included within the budgets before us to support that role.
The LCCC signed its first low-carbon dispatchable CfD with Drax on 4 November 2025. That agreement, which came before this House, will ensure that Drax generates electricity when needed between 2027 and 2031, thus bolstering our energy security. That was a good agreement for consumers, saving £6 a year on household bills compared with the arrangements in place under the previous Government.
The Government subsequently agreed heads of terms for an additional LCD CfD with EP Lynemouth Power Ltd on 6 February 2026. If a full contract is concluded in the coming months, it will further bolster our energy security by ensuring that Lynemouth can continue to generate between 2027 and 2031. The revenue collection contract with Sizewell C Ltd, the first project to use the regulated asset base model for new nuclear, became effective on 4 November 2025. Funds have been included in this budget to cover the LCCC’s operational costs for that RAB.
Turning to the ESC, the capacity market is the tried, tested and most cost-effective way of ensuring that we have electricity capacity when we need it. It provides all forms of capacity with the right incentives to be on the system and generate electricity when we need it by increasing generation or turning down electricity demand in return for guaranteed payments. The capacity auctions to date have secured the capacity that we need to meet the peak demand out to 2028-29. A T-1 auction is ongoing, and a T-4 auction will take place next week, securing most of the capacity that we need toward 2029-30.
In both the CfD and capacity market schemes, participants bid for support via a competitive auction, which ensures that costs for consumers are kept as low as possible. DPAs are allocated through a process involving competitive assessment, followed by shortlisting, then a final stage of bilateral negotiations between the developers and DESNZ. LCD CfD contracts are agreed following a structured negotiation process between DESNZ and the generator.
Revenue collection contracts under the RAB are agreed through a structured process involving Ofgem, the LCCC and DESNZ, which provides a stable, regulated revenue stream to projects during construction and operation. In turn, we expect the RAB to lower the cost of financing for nuclear—one of the biggest drivers of new project costs—resulting in better value for money for consumers.
The LCCC and the ESC’s effective administration of all those schemes has demonstrated their ability to deliver the schemes at a low cost to consumers. That is part of the reason why the LCCC has been working with DESNZ and other parts of Government to develop new schemes for incentivising the deployment of even more low-carbon technologies. For example, the LCCC is working with my Department to develop incentives that will be useful in bioenergy with carbon capture and storage. Although they have not been confirmed yet, contracts for such projects could potentially be entered into, following the process outlined in the 2013 Act.
It is important that the LCCC and the ESC are sufficiently funded to perform their roles effectively, given their critical role in administering those schemes, which I have just outlined. However, the Government are clear that both companies must deliver value for money. With that in mind, we have closely scrutinised their operational cost budgets to ensure that they reflect operational requirements and objectives for the companies. The LCCC and the ESC are very mindful of the need to deliver value for money as one of their guiding principles.
Operational costs per contract are expected to fall by 27% per CfD across the budget period, despite the growing CfD portfolio, because of a number of actions to bring down costs. The narrative is similar for the ESC, which expects the number of capacity market electricity meters to exceed 1.2 million over the budget period—a 450% increase on current meter numbers. The ESC intends to invest in a system architecture redesign to manage the growth and minimise costs, and it estimates that costs per meter will fall by 23%. The operational cost budgets for both companies were subject to consultation, which gave stakeholders and others the opportunity to scrutinise and test the key assumptions in the budgets and, importantly, ensure that they represent value for money.
These regulations revise the levies currently in place to enable the companies to collect enough revenue to fund their budgets. Any levy collected that is not spent will be returned to suppliers at the end of the relevant financial year, in accordance with the regulations. Subject to the will of Parliament, the settlement cost levy for the ESC is due to come into force on the day after these regulations are made. The operational cost levies for the LCCC will come into force by 1 April in each of the relevant financial years.
I assure Members that the Government are mindful of uncertainties in setting a budget for the next three years, such as world events impacting on energy demand and policy decisions on new schemes that have not yet been taken. Consequently, we will keep the companies’ budgets under careful review throughout the budget period to ensure that the cost to consumers is minimised. I commend the draft regulations to the House.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
It is a pleasure to serve under your chairmanship, Sir Alec. It has been too long since I have had the pleasure of responding to the Minister in a Committee Room.
As the Minister outlined, the regulations update the mandatory levies that electricity suppliers must pay to support the operation of the CfD scheme, the capacity market and the nuclear RAB model. These are technical changes, and the Conservatives will not oppose them.
However, while I have the Minister’s attention, I have some questions to put to him. The Government came into office pledging to cut energy bills by £300, but, some 18 months later, we have seen no evidence of that promise being fulfilled. The sleight of hand in pushing costs on to tax bills has not had the desired effect. Does the Minister think that the Government will actually deliver a £300 energy bill cut?
The Government’s press release said that the Department’s “internal analysis” proved that CfD allocation round 7 would cut bills, but the Department refused to let us see that analysis when we submitted a written question asking to see it. Why is the Minister’s Department refusing to publish that analysis? What is it trying to hide? Will it finally commit to publishing a full systems-cost analysis of the new energy system, which was commissioned by the previous Secretary of State, so that we can have an open and honest debate about the cost of the new system?
Finally, will the Minister commit to implementing the recommendations of the Fingleton review in full to make nuclear power much cheaper, quicker and easier to build in this country?
Pippa Heylings (South Cambridgeshire) (LD)
It is a pleasure to serve under your chairship, Sir Alec.
The regulations update the electricity supplier payments for the contracts for difference, electrical capacity and nuclear regulated asset base model schemes, and they will allow for funding that covers the operational costs of those schemes. It was the Liberal Democrats who originally created the contracts for difference scheme while in government, which provided support for low carbon sources with fixed prices for the power that they produce. We must continue to support these clean energy schemes, which will bolster the UK’s energy security and price stabilisation.
As we are seeing this week, geopolitical instability and the closure of the strait of Hormuz will have an extensive impact on the price of wholesale gas. Qatar’s decision to close the world’s largest gas terminal could have a direct impact on customers here in the UK. We are seeing some of the fastest spikes in wholesale gas prices, which are surging by more than 40%. Just this morning, we have seen prices spike by 30% for day ahead UK delivery. For month ahead contracts, the price was at 148p per therm this morning, which is a three year high.
That is why we need urgently to turn to renewable energy sources, continue to develop the infrastructure and technology that will actually support an energy secure future, and move away from over dependence on volatile fossil fuel imports. Given that, it is important that electricity suppliers can recover sufficient funds to cover their expected operational costs. I fully recognise the need to support clean energy schemes that will actively boost our energy security and resilience for decades to come.
Michael Shanks
I am grateful for all those technical questions on the statutory instrument before us. Let me turn to the more general questions that were asked. I welcome the support from the shadow Minister, the hon. Member for West Aberdeenshire and Kincardine; it is always a great pleasure when he supports things that this Government are doing. Unfortunately, he does not do it often enough.
On costs, the Chancellor made a decision in the Budget to take £150 off bills. That has come through in the price cap period, taking into account the need for investment in the network in order to pick up the slack from the time that the shadow Minister was in government—I think he was the Minister for networks for a period. The work to build the grid that the country needs was not done then, so we need to invest in the grid now, but that is a significant investment in bringing down bills, and we stand by the promise to take £300 off bills by the next election.
There are two fronts here. The cost of living is the most important thing facing people across the country, and it is the thing that every bit of Government is seized of taking action on. That is why the £150 was important. Equally, there is no shortcut to bring down bills in the long run, so it is important to say that this work is over the lifetime of the Parliament, to ensure that we put in place the measures that get us off more expensive gas.
The shadow Minister referenced AR7. The outcome from that in terms of cost was that the prices came in at 40% cheaper than the cost of building and running new gas power stations. That is fundamentally the difference here. His party has taken the decision to reference the wholesale cost of gas—given the events of recent days, I wonder whether it might revisit that—while completely ignoring the cost of building and operating the new gas power stations that would be necessary. That power does not just come out of nowhere.
On refusing to publish the analysis, I have the benefit of taking my written questions incredibly seriously, so I signed off the answer to that written question myself, and that was not in fact the answer. I do not know whether it was the shadow Minister who asked the question, but the answer that was sought was in the footnote to the AR7 publication, so we did not have to publish more. It was there in the footnote, if his colleagues had bothered to read it.
We have made it very clear that we will publish a response to the Fingleton review very soon. We had hoped to do that in the past few days, but, given all the things that are going on, we will publish it as soon as we possibly can. We are determined to move forward on the recommendations, because the shadow Minister is absolutely right; we need to build more nuclear much faster in this country.
Let me turn to the hon. Member for South Cambridgeshire. I am delighted that the Lib Dems still take credit for some things that they did in government—although not so much austerity and tuition fees. We will move past that, because I know she does not like to talk about those days.
The hon. Lady is right to raise the uncertainty in the middle east. That underscores how important it is that we focus on our energy sovereignty here in the UK. This is clearly a turbulent time, but, in truth, we have been living through an uncertain world for a very long time. The only way we can get off the volatile series of ups and downs that we have seen in fossil fuels over decades is to build clean power here in the UK and control the nuclear, the renewables and the storage that goes along with it, which is absolutely critical.
These schemes are really important, and we have seen CfDs and other things being exported to other countries, because they are seen as the way to reduce the cost of capital. That feeds through into all consumer bills, which we are determined to reduce. I welcome the cross-party consensus on the Government’s energy policy—it is a delight to see.
Question put and agreed to.
Draft Industrial Training Levy (Construction Industry Training Board) Order 2026
(1 day, 9 hours ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)
I beg to move,
That the Committee has considered the draft Industrial Training Levy (Construction Industry Training Board) Order 2026.
It is a pleasure to serve under your chairship, Ms McVey. The statutory purpose of the Construction Industry Training Board—I shall refer to it as the CITB from now on—is to make better provision for training across the construction industry. The 2023 independent review of industry training boards by Mark Farmer confirmed the ITBs’ continued value in addressing persistent and structural workforce challenges within their industry. The review also found that a statutory levy remains the most effective model for industry-wide investment in training. This draft statutory instrument gives effect to the CITB levy proposals for 2026, 2027 and 2028. The levy remains the CITB’s primary source of funding, and the order is required for the board to raise mandatory assessments on in-scope employers.
The funding raised through the levy will enable the CITB to continue its essential work to tackle skills shortages and market failure in training in the construction sector across England, Scotland and Wales. Recognising the differing views within the sector, the CITB continues to receive strong support from employers. The draft order is built on industry consultation, consensus and stability. During the formal consensus process about the proposals in spring 2025, the CITB consulted all 14 prescribed organisations in its industry, alongside a structured survey of non-represented employers. More than 67% of levy-paying employers supported the proposals, representing almost 72% of total levy value—comfortably above the statutory thresholds required for consensus to be achieved.
Before we consider the levy proposals in further detail, I take this opportunity to return to the findings of the Farmer review. I am pleased to confirm that the Government intend to consult industry on a proposal to bring together the CITB and the Engineering Construction Industry Training Board, or ECITB, to create a single unified body to support the combined skills needs of the construction and engineering construction sectors. That proposal delivers on the recommendation of the Farmer review, which the Government accepted subject to further scoping. It builds on the ITBs’ existing collaborative approach to working together, as demonstrated through initiatives such as the Sizewell C skills charter: a set of commitments between the ITBs, the local councils and Sizewell C to help ensure the skilled and inclusive workforce needed to deliver that vital nuclear power station.
The consultation is expected to launch shortly, and the views expressed by industry will inform a decision on how to proceed. We cannot prejudice the outcome of the process and, in any case, the earliest the change would be likely to take place is April 2027. Should the Government choose to proceed with the proposed reform, any new levy order will come to the House through the proper parliamentary process. In the meantime, it is vital to the continuity of CITB support for employers that the draft levy order that we are debating today continues as planned.
I return to the proposals for the draft levy order. I give my thanks to the Joint Committee on Statutory Instruments for its detailed review. This order retains the levy assessment rates that have remained unchanged for four years. Despite employer demand for CITB services having risen by 36% since 2021, levy rates have been deliberately held steady to support businesses still navigating difficult trading conditions at home and globally.
The draft order also raises the exemption and reduction thresholds to protect small and micro businesses from unintended levy burdens caused by wage inflation. Employers with wage bills of up to £149,999 will be exempt, and those with wage bills between £150,000 and £499,999 will receive a 50% reduction. Those thresholds will ensure that about 69% of eligible employers pay no levy at all, while a further 15% benefit from reduced rates. All those employers remain eligible for CITB grants and support. The CITB estimates that the proposals will raise about £243 million per year, to be invested in supporting the skills needs of the construction industry. That investment will fund vital programmes to widen participation, raise skills levels, tackle disadvantage and set occupational standards for the industry.
In 2024-25, the CITB supported over 30,000 apprentices and 20,000 vocational qualification achievements; provided almost £130 million in grant funding—including £60 million for small businesses and microbusinesses; and committed up to £40 million to support fast-track training and apprenticeships in areas of high demand for home-building skills. That funding directly underpins our broader economic priorities.
The construction sector contributes over £211 billion in total output each year and employs more than 2 million people, but the fragmented nature of the industry, which has a high rate of self-employment and complex supply chains, makes voluntary investment in training less likely to occur. Without a statutory levy, the skills that the industry urgently needs will simply not materialise at the scale required. If the draft order is not approved, the CITB will be unable to collect levies in 2026, with potential impacts on apprenticeships, vital industry qualifications, employer support programmes, training standards and the future capability of one of the UK’s most economically significant sectors.
The UK requires an estimated 240,000 additional construction workers by 2029, with the largest pressures felt in home building, infrastructure, and repair and maintenance. Approving this draft order therefore plays a critical role in delivering the Government’s commitment to deliver 1.5 million safe and decent homes during this Parliament, as set out in our plan for change, and in supporting major infrastructure and clean energy projects across Great Britain that are vital to economic growth and increased opportunity.
In addition to industry support, the proposals before the Committee today have received the support of the devolved Governments of Scotland and Wales. They recognise, as do we, that maintaining the CITB’s ability to raise and invest levy income is vital to ensure that employers across all three nations can access the construction skills they need. For those reasons, I commend the draft order to the Committee.
Rebecca Smith (South West Devon) (Con)
It is a pleasure to serve under your chairmanship, Ms McVey. I rise to speak on behalf of the official Opposition.
The draft order that we are debating will allow the Construction Industry Training Board to raise one more year of levy on the construction sector for the specific purpose of funding training. The purpose of the levy is to support the construction industry to have a skilled, competent and inclusive workforce for the future. The levy equates to 0.35% for pay-as-you-earn employees and to 1.25% for those with net payment status under the construction industry scheme, and it is reinvested in the industry by the board.
In 2024-25, the CITB provided nearly £130 million in grant support to construction employers and learners. That has helped to confront the training challenges that persist due to the high number of self-employed workers in the sector. The CITB estimates that 48,000 extra construction workers will be needed each year until 2029 to meet demand—a gap that could grow to 160,000 to fulfil the Government’s housing and retrofit ambitions. The industrial training levy will be vital to bridge that gap, and I welcome this opportunity to scrutinise the Government’s plans.
Nearly 60,000 potential new entrants leave the industry each year. What specific steps is the Minister taking to improve workforce retention alongside efforts to increase recruitment into the construction industry? Employer demand for CITB support has increased by 36% since 2021 while levy rates have remained unchanged, with demand now exceeding levy income. Given the financial pressures and the projected workforce requirements, can the Minister clarify the extent to which the reforms will not only meet the demand, but support the Government’s housing and infrastructure ambitions? We welcome the support provided to apprenticeship starts through the National Employment Savings Trust, but can the Minister say what proportion of those apprentices remain in sustained employment after 12 months?
I should have declared an interest at the beginning: I have family members who have worked for a local construction industry training group. On the restructuring of how training is funded, I highlighted in an Adjournment debate on 4 January that local training groups, which have played an enormous role in training in the construction industry over many decades, are being sidestepped under the new plans, and their local knowledge of the sector could be lost as delivery changes.
In that debate, I asked how funding will be allocated to areas that do not have a strategic local authority, such as my constituency of South West Devon. That is a key part of how this draft order will be delivered, and I would welcome further clarification from the Minister on this issue, together with assurances that areas without a strategic local authority will not be disadvantaged in any way as the transition takes place. We will not oppose the regulations, but we would appreciate it if the Minister addressed the concerns that I have raised.
Matt Western
I am grateful to the hon. Member for South West Devon for her contribution and for the thoughtful scrutiny applied to the draft levy order. The evidence is consistent: market forces alone will not deliver the pipeline of skilled workers that the industry urgently needs, which I suspect is what is driving her questions about how the Government will tackle that. Whether it is meeting the demand for new homes, retrofitting and repairing existing properties, or delivering the critical infrastructure needed for economic growth, there is work to do.
The levy is the mechanism that enables the collective benefits of a focused skills strategy for the construction industry and ensures that employers of all sizes can access support for training and share the benefits of a skilled, competent and resilient workforce. It also creates opportunities to help apprentices and other new entrants complete high-quality training, and enables existing workers to reskill or upskill to progress their careers. If it is okay with the hon. Lady, I will write to her with the specifics on the percentage of apprentices still in meaningful employment, as well as on her question about workforce retention.
On the question of recruitment, particularly through the mechanism of apprenticeships, the hon. Lady will have noted the changes the Government are bringing forward to apprenticeship funding to introduce new foundation apprenticeships, of which construction apprenticeships form a key component. We think that will be essential to driving more young people towards construction apprenticeships and meeting the skills demand that we face if we are to deliver on the 1.5 million homes target.
Clearly, it is our intention to ensure that areas without a strategic authority are not disadvantaged in any way. The number of areas for which that is the case is changing all the time. I represent an area within a combined authority, but it is certainly not our intention for anybody to miss out on opportunities as a consequence of their local governance arrangements.
I am grateful to the hon. Member for South West Devon for her questions and for the opportunity to participate in this debate. I will come back to her, as I said, on the specifics. For the reasons set out in my opening speech, with which the Opposition spokesperson largely agrees, I commend this levy order to the Committee.
Question put and agreed to.