Industry consultation on Training Groups

Background

CITB has supported a network of training groups across Britain for some time. The 88 groups across the country vary significantly in size and coverage. For example, some are construction-wide and others are specialist. The focus of training groups, how they work with CITB and the support provided to do this has also changed significantly over time.

At a time when many other programmes have been paused, CITB has maintained its support for training groups, though at a reduced level. This reflects our belief that it is important to support employers locally with accessing the training they need.   

However, we do now need to look at costs given that CITB will have significantly reduced levy income for the foreseeable future - over the four years about 21-25 Strategic plan, we now expect levy income to be 30% lower than we forecast before COVID-19.

Are there better ways to support local training?  

This review, though, is not just about costs.  We need to look at whether there are better ways to help companies access training at the local level. For the most common areas of training - say the top 20 most used training standards- we want to look at what is the best way to achieve the following outcomes:

  • making it easier to access the key areas of training;
  • reducing the cost of training;
  • improving the quality of training;  
  • growing the number of employers that are supported.

The same objectives also apply to the specialist areas of training that are supported by the specialist training groups.

In reviewing and consulting on options for the future, we are also drawing on evidence from a recent 'Train for a Tenner' pilot, which tested a simpler mechanism with Northants Training Group for supporting employers to train in some of the most common areas without needing to claim grant. It also looked at achieving reductions in the cost of training through bulk buying.  We also want to look at the relative roles that the Training Directory and other support should play in helping employers to find training that meets their needs.

Can we improve value for money?

In this review, we need to look at value for money and the significant variability between the groups in terms of their performance such as the number of members that are active with training.

Looking at 2019/20, the total investment in training groups was £5.76m, This is made up of £28K per training group as a contribution to the TG running costs, including payment for a group training officer, amounting to £2.46m to pay for administrative support and £3.3m to support training through Grant Eligible Training (GET) fund.             

In 2019/20, the 88 training groups had 4065 employers in membership of which 2534 were 'active with training'.  This represents an investment of levy of £65,450 per training group, £1420 per employer and £2270 per employers 'active with training'. The majority of employers supported by training groups are small and micro with 1434 claiming support in 1920.  This is 2% of all CITB registered small and micro employers.

The figures so far for 20/21 are 4215 employers in membership and 1989 employers 'active with training'.        

The options presented below reflect the need to make savings across CITB. In line with the approach in this year’s Stability Plan and in the 212-25 Strategic Plan, we have focused on maximising funding for employers. In the options, out of a total budget of £3.6m, we have maintained support for training at its current level of £2.6m but have reduced the administrative support to £1m.   In consulting on the various options, the balance between the two areas could of course change, with any model that requires a higher level of administration support reducing the amounts of funding available for training.   

A comprehensive consultation

We also know the training groups are not just about supporting access to training. We want to find out which areas of the support provided by training groups are most valued by employers.  We also want to understand the needs served by specialist groups, talking to these groups and the employers they support.

This consultation, which we will carry out in November and December, will look at potential options for helping employers access training in some of the most high-volume areas. It will look at various options to achieve aims such as making the training more accessible, reducing costs and raising quality. As well as looking at the proposed options in this paper, we want to hear any other suggestions that people have for achieving the outcomes.  

We will seek the views of training groups and employers through a variety of ways, including talking to the training groups themselves, the prescribed organisations and other federations and employers directly. We will do this through a combination of 'face to face' discussions and using an online questionnaire. We will provide the results from this to all interested parties.

We will use the inputs to this consultation to inform the future model of how we support employers in this area. One potential result could be to introduce a new model. If this proves to be the case, we would not be able to implement it by next April in which case we would look at interim arrangements to ensure no gap in support.    

Consulting on the options

We have looked at three potential options but are keen to identify any other potential models during this consultation. In all of the options below, any of the examples are simply illustrative.

Option 1 – Retain a reduced TG network

The allocated administration budget of £1m for 2021-22 would allow CITB to support 35 TGs at their current average levels of support.  

Two examples of how the TG network could look:

Nation

Number of TGs

Locations

Cost

Wales

3

North Wales (1)

South East Wales (1)

South West & Mid Wales (1)

£84,000

Scotland

6

Eastern Scotland (2)

South Western Scotland (2)

North Eastern Scotland, Highlands & Islands (2)

£168,000

England

22

15

North West (3)

North East & Y&H (3)

East Midlands (3)

West Midlands (3)

East of England (3)

South East (3)

London (1)

South West (3)

North West (2)

North East & Y&H (2)

East Midlands (2)

West Midlands (2)

East of England (2)

South East (2)

London (1)

South West (2)

£616,000

£420,000

Specialist

4

11

 

 

 

 

 

£112,000

£308,000

Total cost

35 TGs

 

£980,000

£980,000

The expectation would be that these 35 groups would support the same level of membership as currently exists; the remaining groups would pick up the members of the TGs who would no longer receive funding.

Funding training activity levels at the same level as this year (£2.6m) would equate to £74k per TG.

Total cost = £3,580,000

Cost of support per employer under this model (assuming same level of membership as 2020 levels):

A&S cost only: £233 per employer (total membership) / £493 (active with training)

A&S & training budget: £849 (total membership) / £1799 (active with training)

We would want to engage with specialist TGs and their members specifically on how their needs differ to general TG members, to explore whether the TG model meets these needs.

Option 2 - Virtual Training Hubs

Set up a network of virtual hubs, with coverage across GB, split into 8/10 regions (Wales, Scotland, and 6/8 England regions).

The hubs would help employers of all sizes access core training requirements (e.g. the top 20 most claimed Tier 1 (£30) training standards), at discounted rates.

Example charges for training [please note these costs are included as an example only. We will consider a range of costing models, which could include the same level of support to all as an option but this would result in lower numbers of training places being funded.]

  • £20 charge per training place for small and micro sized companies
  • CITB contributes a percentage of the cost for medium and large companies

A supplier framework of Training Providers (TPs) procured by CITB would be set up to deliver the training in the regions at discounted rates up to a capped / budgeted amount, allowing CITB to manage spend on core/compliance training.

This core training programme would not be grant-aided but additional training on top of these caps or outside of the core framework would be accessible at market rate (grant aided). It would be important to ensure TPs can deliver training to meet the wider needs of industry, not limit themselves to this core programme.

This model allows us to adopt some elements of the Northants TG Train for £10 pilot, at the same time ensuring value for money, quality of provision, suitability of training locations and consistency of support.

This model would provide a service where the core mandatory training is offered across the country, but also has potential to offer additional courses as required in local areas. As evidence of skills gaps and needs is refined, uptake in these areas could be encouraged (e.g. incentivising training options), and likewise with areas such as digital and soft skills to support improved productivity.

It would allow CITB to focus Levy investment on the most requested courses among industry, whilst ensuring a consistent spread of high quality delivery through the use of a network of training providers that have met the requirements of a thorough procurement process.

Costs:

The 2021-22 budget for TG A&S grant (£1m), the fund (£2.6m) that would be payable to support TG members with training, and the grant payable on these top standards would be repurposed to cover the costs of delivering this training. CITB would invest in the procurement process, setting up the framework, and administering the network of hubs.

Option 3 – reduced TG numbers run in conjunction with Training Hubs

This model would support a lower number of TGs that would be required to support a broader membership

For example, 20 TGs across the 3 nations (Wales 2, Scotland 4, England 14), would continue to receive A&S funds and the TG GET fund.

The Training Hubs would provide a similar model to option 3 above but with a reduced programme of core training (perhaps the top 5 or 10 most claimed training standards), which would not be grant aided but discounted to a reduced cost – for example £30 cost for each training standard.

The expectation in this model is that the remaining TGs pick up some of the membership of TGs that no longer receive funding. However, due to the lower number of TGs overall, and the implementation of a Hub model that would also provide a measure of support to employers, we would anticipate the TG membership to reduce by approximately 20%. This would mean approximately 1600 ‘active with training’ employers supported by the TGs – 80 per TG.  

TG Costs:

20 TGs A&S = £560,000

20 TGs 50k GET fund = £1,000,000 (£50k per TG – a 100% increase which would accommodate the increased number of members per TG, but at the same time assuming that the Training Hubs would cover the mandatory training.)

Total = £1,560,000

Training Hub costs:

CITB investment in the procurement process, setting up of framework and administering would remain.

These costs would need to be fully calculated, but this option would leave us £2m to support the Training Hub model (the reduction in the A&S payable to TGs and the balance of the current fund paid to TGs for training)

This option has been included at the request of the National Training Group Chair. Further work will be needed on whether this would be an effective model for delivery is needed. Due to the lower number of standards that would be delivered in this model, it may not be viable or cost effective to procure a national framework for anything less than ten standards.

How to take part in the consultation

The consultation on the options described above can be found here and runs until 31 December 2020.

Should you wish to submit a counter-proposal to these options, please do so by emailing julia.stevens@citb.co.uk. It is necessary to ensure that any counter proposal meets the budgetary requirements as set out in this paper.