Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)

My Lords, I thank the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments for their scrutiny of this draft order, laid on 2 February 2026. The statutory purpose of the Construction Industry Training Board, or the CITB, is to secure better training provision across the construction sector. The 2023 independent review of the industry training boards, led by Mark Farmer, reaffirmed their continuing value in addressing persistent and structural workforce challenges. Crucially, the review concluded that a statutory levy remains the most effective model for securing the level of skills investment that the industry requires. This statutory instrument gives effect to the CITB’s levy proposals for 2026, 2027 and 2028. The levy remains the CITB’s primary funding source and, without this order, the board cannot raise mandatory assessments on in-scope employers. Levy funding enables the CITB to deliver essential support to tackle skills shortages and market failures across England, Scotland and Wales. Although views in the sector can vary, the levy proposals continue to command strong employer support. These proposals are the result of detailed consultation and a robust consensus process. In spring 2025, the CITB consulted all 14 prescribed organisations, or sector federations, alongside a structured survey of non-represented employers. Over 67% of levy-paying employers supported the proposals, representing almost 72% of levy value—well above the thresholds for consensus to be achieved. Before we consider the levy proposals in further detail, I will return to the findings of the Farmer review. I am pleased to confirm that the Government intend to consult industry on bringing together the CITB and the Engineering Construction Industry Training Board to create a single unified body, supporting the combined skills needs of construction and engineering construction. This reflects a key recommendation of the Farmer review, accepted by the Government subject to further scoping. It builds on existing ITB collaborations such as the Sizewell C charter: a joint commitment by the ITBs, local authorities and Sizewell C to ensure a skilled and inclusive workforce for delivering this vital nuclear power station. The consultation will launch shortly and the views expressed by industry will inform a decision on how to proceed. No outcome can be prejudged and the earliest that any change could take effect is April 2027. Any future levy arrangements arising from reform would come before Parliament in the usual way. Until then, maintaining the CITB’s ability to operate effectively makes approval of this statutory instrument essential. To turn to the levy proposals, this SI maintains current levy rates. Despite a 36% increase in employer demand for CITB services since 2021, rates are held steady to support businesses navigating difficult trading conditions. The order also raises exemption and reduction thresholds to protect small and micro-businesses from levy pressures linked to wage inflation. Employers with wage bills up to £149,999 will be exempt, while those with wage bills between £150,000 and £499,999 will receive a 50% reduction. Approximately 69% of eligible employers will therefore continue to pay no levy, with a further 15% paying a reduced rate. All these employers remain eligible for CITB support. The CITB estimates that the levy will raise around £243 million per year to invest in supporting skills needs. In the most recent year, the CITB supported over 30,000 apprentices and 20,000 vocational qualification achievements and provided nearly £130 million in grants, including £60 million for small and micro firms. It also committed up to £40 million for fast-track training and apprenticeships in areas of high demand for homebuilding skills. This funding directly underpins broader economic priorities. The construction sector contributes over £211 billion annually and employs more than 2 million people. Yet its fragmented nature, characterised by high self-employment and complex supply chains, makes voluntary, industry-wide investment in skills unlikely to occur. Without a statutory levy, the workforce needed to deliver the UK’s economic ambitions simply would not materialise at the required scale. If this order were not approved, the CITB would be unable to collect levy in 2026, impacting apprenticeships, qualifications, employer support programmes, training standards and the future capability of an industry fundamental to growth, housing delivery and national infrastructure. The UK requires an estimated additional 240,000 construction workers by 2029, with particular pressures in infrastructure, repair and maintenance, and homebuilding. Agreeing this order is therefore critical to delivering the Government’s commitment to 1.5 million safe and decent homes this Parliament and to supporting major infrastructure and clean energy projects across Great Britain. The proposals have the full support of the devolved Governments in Scotland and Wales, who, like industry, recognise the importance of maintaining the CITB’s ability to raise and invest levy income. For these reasons, I commend the instrument and I beg to move.