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

Andrew Western Excerpts

Tuesday 3rd March 2026 General Committees

[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.