Parliament approves £137.9m engineering construction training levy for 2026-28, exempting smaller employers from the charge
Parliament has passed the Industrial Training Levy (Engineering Construction Industry Training Board) Order 2026, following votes in both the House of Commons and House of Lords.
The order was tabled by minister of state Sir Stephen Timms in the Commons on 6 July, before being approved by MPs and subsequently debated by Baroness Smith of Malvern, the minister for skills, in a House of Lords Grand Committee sitting on 14 July. It passed without opposition in either House.
The legislation follows a consultation last November in which engineering construction companies voted “resoundingly” in favour of the ECITB’s proposed levy rates for the next three years, according to the training board.
An estimated £137.9m will be raised through the levy between 2026 and 2028, payable in 2027, 2028 and 2029. The order maintains existing levy rates of 0.33% of earnings paid to off-site employees and 1.2% of earnings paid to on-site employees for liable businesses.
Exemption thresholds remain unchanged: employers with an annual wage bill below £1m for off-site employees, or below £275,000 for on-site employees, will not pay the levy. Exempted employers remain eligible for training grants if they are in scope of the ECITB.
Speaking in the Commons, Timms said: “The industry faces big, longstanding 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.”
He added that the UK needs an additional 40,000 engineering construction workers, and that the order had received backing from the devolved governments of Scotland and Wales.
Baroness Smith told the Lords Grand Committee: “The engineering construction industry is critical to the delivery of the government’s wider ambitions for economic growth, clean energy and energy security. It provides the skilled workforce needed to build, maintain and operate major energy and industrial infrastructure across Great Britain.”
She said the investment would fund programmes to “widen participation, raise skill levels, increase opportunity and to maintain occupational standards for the industry.”
Andrew Hockey, chief executive of the ECITB, said: “The ECITB received the overwhelming backing of industry for its levy proposals last November with engineering construction companies voting resoundingly in favour of its proposed levy rates for the next three years.
“Approval of the levy order gives us the financial underpinning” to deliver the board’s strategy, he added.
The levy consultation followed the ECITB’s five-year strategy, Leading Industry Learning, published in September 2025. Separately, a government consultation on a possible merger between the ECITB and the Construction Industry Training Board (CITB) closed in June, with the Department for Work and Pensions expected to announce a decision this autumn.
Main image: House of Lords Grand Committee ECITB Levy Order debate earlier this month
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