Industrial Training Levy (Engineering Construction Industry Training Board) Order 2026

Baroness Spielman Excerpts

Tuesday 14th July 2026 Grand Committee

[Baroness Spielman (Con)]

My Lords, I thank the Minister for introducing this order. We support the continuation of the Engineering Construction Industry Training Board levy for the 2026, 2027 and 2028 levy periods. This provides continuity for the industry without imposing additional costs. As others have said, the levy system clearly commands the support of the vast majority of those who pay for it. It works precisely because it is driven by industry need. Companies understand their workforce requirements far better than Whitehall ever can. The role of government should be to create the conditions in which businesses can invest, recruit and train, rather than to control industries with centrally designed employment schemes.

But it is important to look at the levy in the context of both current and likely future pressures. The scale of the challenge is considerable. The Minister cited estimates of a need for another 40,000 workers by 2030. Demand is rising in nuclear construction and decommissioning, offshore wind, hydrogen, carbon capture and storage, industrial decarbonisation, and the maintenance of existing energy infrastructure. The industry is competing for workers with other infrastructure sectors that need the same skilled trades and technical professionals. The central challenge is how to make sure that the country has the capacity and skills to deliver projects that are already planned.

Employers are facing considerable difficulties in recruiting and training. The workforce is ageing and few new entrants are coming through to replace retiring workers in key occupations. We need more and better technical education. Undervaluing technical and vocational education is a perennial British problem that stretches back for well over a century, and good technical education is not cheap. Successive Governments have wrestled with this for decades, and I can say with confidence that the problem will not be solved by a few soundbites about parity of esteem or by an education policy that is driven by social justice ambitions and that treats educational excellence, national prosperity and growth as afterthoughts. The Government should be taking a hard look at their equivalence and performance tables policy which, over 20 years, has done so much to push young people at school away from technical subjects at GCSE and into non-technical classroom BTECs.

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[Baroness Smith of Malvern (Lab)]

I thank the Committee for its contributions to the debate, and I welcome the noble Baroness, Lady Spielman, as this is the first time we have faced each other in her new role. I congratulate her on that.

The debate has underlined not only the importance of the ECITB’s work but the scale of the challenge facing one of our most economically vital industries, with a core workforce of 90,000 people and responsibility for £33 billion of output. As noble Lords have recognised, the industry plays a vital role in supporting our energy security, manufacturing capability and critical infrastructure.

As has come through clearly today, the engineering construction industry cannot meet the skills demands of the coming decade without a stable collective system of investment in training, alongside government support. I will return to this in a moment. The evidence is consistent that market forces alone will not deliver the pipeline of skilled workers that the industry urgently needs to meet the demand for new major infrastructure projects.

The ECITB’s levy is the mechanism that enables the collective benefits of a focused skills strategy for the engineering construction industry. It ensures that employers can access support for training and share the benefits of a skilled, competent and resilient workforce. It also opens opportunity, helping apprentices and other new entrants to complete high-quality training and helping existing workers to reskill or upskill to progress their careers.

I will respond to some of the specific points raised. The noble Baroness, Lady Coffey, rightly emphasised the need for success in the spending of the levy and the successful completion of training courses and apprenticeships. The ECITB has confirmed that it currently tracks apprentices and graduates while they are on programmes and receiving grant support. The data that the ECITB collects indicates a positive impact of its grant support on, for example, apprenticeship completion rates. Based on the ECITB’s latest available data for England, Scotland and Wales, of the apprentices who started an apprenticeship in 2020 and were supported by ECITB, 78% have successfully completed their apprenticeship as of December 2025. While we have seen improvements in the completion rates of apprenticeships over recent years, I think that is above the average rate.

The noble Baroness also raised the question of when the annual reports and accounts will be published for 2025. They will be laid in the autumn.

On the point about charitable status, it is not determined by the Government; it is determined by whether an organisation’s purposes are exclusively charitable and legally deemed to provide a clear public benefit. It was therefore a decision for the training bodies themselves—CITB, equally, is a charity—to take on that charitable status.

The noble Lord, Lord Palmer, raised the success of the levy consultation. It would be fair to say to the noble Lord that there are a lot of statistics around. Some of the statistics the noble Lord quoted related to the Construction Industry Training Board rather than the Engineering Construction Industry Training Board; perhaps it would be easier were the Government to decide to go ahead with the merger of the two. Nevertheless, they are different sizes and they do different jobs. The point he made is right: for the ECITB there is, if anything, an even greater level of approval as a result of the levy consultation than the figures he quoted.

Several noble Lords rightly cut to the chase of what the ECITB is responsible for. In other words: what does it actually do, and how, in the broader context, are the Government supporting the need for skills in the engineering and construction industry? On the former, the ECITB continues to invest in skills hubs, training standards and competence assurance across key sectors, including energy, nuclear and renewables. It has supported more than 6,900 new entrants since 2022 and invested £32.6 million in 2025 in training grants and new entrant programmes. During 2024, the ECITB funding supported over 2,000 new entrant starts, including over 1,000 apprentices and 500 graduates. Almost 64,000 learners were trained or assessed using ECITB-approved products, including more than 31,000 learners achieving industry-recognised safety passports and 2,763 learners supported through competence-related programmes. Of course, while the ECITB and the levy we are discussing are important for addressing some of the market failure in delivering skills in the engineering construction industry, it is just part of the broader work the Government are doing to support the engineering construction industry and wider skills. This relates to the points made by the noble Baroness, Lady Spielman.

The Government are delivering significant investment to strengthen engineering construction skills, as part of wider reforms, helping employers to respond to current and future workforce needs. This includes an additional £1 billion of investment to help deliver around 50,000 more apprenticeship opportunities for young people over the coming years—that is particularly important given the 40% fall in young people’s apprenticeships over the last years of the last Government—alongside increased flexibility through the new growth and skills levy and specific sector skills packages in engineering and construction that are worth over £800 million.

Additionally, we are providing targeted incentives for employers, including payments of up to £2,000 for taking on foundation apprentices. We have developed a new foundation apprenticeship in engineering, helping more young people to enter skilled careers, as well as other incentives, particularly for taking young people who may have been out of work on to these apprenticeships. We have continued and in fact increased investment in skills bootcamps and increased devolved approaches through mayoral strategic authorities, enabling local areas to respond to local employer demand and skills shortages.

The noble Baroness specifically raised technical and vocational education. I reassure her that this Government’s action, even in the two years that we have been in government, goes far beyond the soundbites that she characterised. A major reform of post-16 education is in progress, and stronger vocational routes are being developed through the new V-levels, an expansion of the possibility for young people to gain an in-depth technical education through T-levels, improved level 2 qualifications to get young people on to those vocational routes, and the investment I have already outlined in turning around the fall in the numbers of young people who have been able to start apprenticeships, ensuring that those opportunities are available for young people in the future.

Together with the ECITB support, these measures will strengthen the pipeline of skills available to the engineering construction workforce and support the delivery of major infrastructure projects across Great Britain. I hope that, in responding, I have reassured noble Lords about the role of this levy order, its importance in supporting the needs of small and larger businesses, ensuring maximum impact and value for money from employers’ levy contributions, and the important role the ECITB plays in ensuring that this key industry for growth, the development of infrastructure, energy security and manufacturing capability is supported both by the ECITB and the wider policies of this Government.

[Baroness Spielman (Con)]

Can the noble Baroness address my question about the impact of government policies enacted over the last two years on the engineering construction sector, particularly increased national insurance and employment rights?

[Baroness Smith of Malvern (Lab)]

I spelled out some of the impacts of the Government’s policy on the numbers of apprenticeships, the shift to vocational and technical education, the support this Government are providing to turn around the decline we have seen, and the £800 million of sector skills support we are providing for the industry. Is the noble Baroness genuinely arguing that this Government should now reverse the national insurance increases, which is where the investment in the National Health Service, which is also of considerable importance to employers, will come from? If she got her way and we reversed that, I think engineering employers, along with others, would not want their employees to be sitting on the waiting lists we inherited from the last Government.