Employment and Training

Stephen Timms Excerpts

Monday 6th July 2026 Commons Chamber

[The Minister for Social Security and Disability (Sir Stephen Timms)]

I beg to move,

That the draft Industrial Training Levy (Engineering Construction Industry Training Board) Order 2026, which was laid before this House on 1 June, be approved.

In my view, the provisions in this statutory instrument are compatible with the European convention on human rights.

The statutory purpose of the Engineering Construction Industry Training Board is to make better provision for training throughout the engineering construction industry in England, Scotland and Wales. Engineering construction is critical to the Government’s wider ambitions for economic growth, clean energy and energy security. The industry provides the skilled workforce to build, maintain and operate major energy, manufacturing and industrial infrastructure across the country. The continued value of the ECITB and the Construction Industry Training Board was confirmed by a 2023 independent review, which found that a statutory levy remains the most effective model for industry-wide investment in training, and is needed to address persistent structural workforce challenges within the industries covered by the industry training boards.

This order gives effect to the ECITB’s levy proposals for 2026, 2027 and 2028. The levy remains the board’s primary source of funding, and the order is required for the board to raise mandatory assessments on employers that are in scope. It continues to receive strong support from employers: more than 85% of levy-paying employers supported the levy proposals, representing nearly 98% of total levy value—well above the statutory threshold of more than 50% support required from industry.

A 12-week Government consultation has just closed on a proposal to bring the two ITBs together into a single, unified body to support the combined skills needs of the engineering construction and construction sectors. The Government are now carefully considering the views expressed before making decisions on reforms that may be needed to ensure that the system delivers the support that employers need. I cannot prejudge the outcome but, in order to maintain the ECITB for support for employers, we need this levy order. If the Government chose to proceed with the proposed reform, the earliest that a single body could be in place would be the spring of 2028. If reform required a new ITB levy order, it would come to the House through the usual parliamentary process.

I thank the Joint Committee on Statutory Instruments for its detailed review of this levy order. The order retains levy assessment rates from the Industrial Training Levy (Engineering Construction Industry Training Board) Order 2023 and retains the exemption threshold to protect small businesses and microbusinesses that are still eligible for ECITB grants and support.

An estimated £137.9 million will be raised in levy between 2026 and 2028. It will be invested in meeting the skills needs of the engineering construction industry. It will fund programmes to widen participation, raise skill levels, increase opportunity and maintain occupational standards for the industry. It includes targeted grant support for employers to develop the skills pipeline in engineering construction. Since 2023, more than 5,000 apprenticeship starts have been supported through ECITB employer funding, including electrical, mechanical and nuclear-specific apprenticeships. That support includes direct grants for employers, travel and accommodation costs, and costs of additional qualifications that are required.

The funding raised by the ECITB levy directly underpins broader economic priorities. More than 90,000 people are employed in the leviable workforce, contributing an estimated £33 billion in gross value added, which rises to £100 billion when we include the wider sectors serviced by the engineering construction industry. However, the industry faces big, long-standing challenges in recruiting and retaining a skilled workforce, which makes voluntary investment in training harder to secure. Only a statutory levy can guarantee that the skills that industry urgently needs will be provided at the scale required. If this order is not approved, the ECITB will be unable to collect the levy in 2026. That would hit apprenticeships and other vital industry qualifications, employer support programmes, training standards and the future capabilities of one of our most economically significant sectors.

It is estimated that the UK needs an additional 40,000 engineering construction workers, and this order will play an important part in supporting major infrastructure projects nationwide. In addition to industry support, the proposals before the House today have received the full support of the devolved Governments of Scotland and Wales. They recognise, as we do, that the ability of the ECITB to raise and invest levy income is vital to ensuring that employers across all three nations can access the engineering construction skills that they need. I commend the order to the House.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.

--- Later in debate ---

[Sir Stephen Timms]

I am grateful to all those who have spoken in the debate for the thoughtful scrutiny they have given to this instrument, and I am grateful for the support expressed by the hon. Members for South West Devon (Rebecca Smith) and for Torbay (Steve Darling) and my hon. Friends the Members for Portsmouth North (Amanda Martin) and for Birmingham Northfield (Laurence Turner).

What I think the debate has effectively underlined is just how important the work of the ECITB is and the scale of the challenge that faces one of our most economically vital industries, which has a core workforce of 90,000 people and is responsible for £33 billion in annual output. The importance of that industry has been well reflected in the contributions to this debate. It is clear that the engineering and construction industry cannot meet its skills demands in the coming decade without a stable, collective system of investment in training. The evidence is consistent that market forces on their own will not deliver the pipeline of skilled workers that the industry urgently needs.

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

The hon. Member for South West Devon asked what the Government are doing to support the industry more widely with skills. Substantial Government investment is being deployed to that effect as part of wider reforms to help employers respond to current and future workforce needs. This includes an additional £1 billion of investment to help deliver some 50,000 more apprenticeship opportunities over the next few years, alongside increased flexibility through the new growth and skills levy and sector-specific skills packages in engineering and construction worth over £800 million.

The hon. Lady will know of the targeted incentives for employers, including payments of up to £2,000 for taking on foundation apprentices, which will help more young people to enter skilled careers. The continued investment that we are making in skills bootcamps and increasingly devolved approaches through mayoral strategic authorities are enabling local areas to respond more effectively to local employer demand and skills shortages. Together with support from the ECITB, the measures certainly will strengthen the pipeline of skills, and I agree with the hon. Lady about how important that is.

The hon. Lady cited the figure from 2024 that £28 million was invested by the ECITB in training grants and new entrant programmes. That went up to £32.6 million last year. We are expecting continuing increases, and we recognise the importance of being able to fulfil the growing demand that we are seeing.

My hon. Friend the Member for Portsmouth North (Amanda Martin) quite rightly reflected how important these measures are for Portsmouth, and she asked for engagement with the all-party parliamentary group. I will pass on that request to the Minister for Transformation, my hon. Friend the Member for Stretford and Urmston (Andrew Western), who I am sure will be very pleased to do that.

To the questions from my hon. Friend the Member for Birmingham Northfield (Laurence Turner), I am afraid that I am not in a position to shed any light on the timing of the decision following the recent consultation. I will, though, pass on his suggestion that trade union representation should be considered when the reorganisation is being reflected on.

The shadow Minister asked me a question about the proportion of new entrants. I think she was asking about those who are still in the industry 12 months on. That is not a figure that I have to hand but I will, if I may, drop her a line, if I can get the information to answer her question.

The debate has reminded us just how important supporting the needs of small businesses is, ensuring maximum impact and value for money from employers’ levy contributions, and I think that the order gives reassurance on all those points. It maintains support for the engineering construction industry by minimising burdens on employers, holding steady levy rates and protecting smaller firms by maintaining exemption thresholds. Regardless of any future decisions needed to future-proof its support, the industry cannot afford a gap in funding now, and approving this order provides continuity, stability and confidence for engineering construction employers across England, Scotland and Wales. I am grateful for the support this measure has received in the debate, and for all those reasons I urge the House to support it.

Question put and agreed to.