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No training levy for small men; more power and less paperwork for bigger ones

26th February 1971
Page 20
Page 20, 26th February 1971 — No training levy for small men; more power and less paperwork for bigger ones
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Keywords : Grants, Philanthropy, Payroll

RTITB responds to industry's requests • About 34,000 small establishments —hauliers, psv • operators and garages —with annual payrolls of less than £5000 will be exempted from the training levy if the Road Transport Industry Training Board's proposals to the Secretary of State for the training year 1971-72 are accepted. Also revealed on Monday by the Board were: O Plans to give the three RTITB industrial committees (representing the haulage, passenger and motor trade sectors) new power to decide on training and grants for their own areas. Activities such as removals, warehouse keeping and bodybuilding will get representation.

O The intention of "netting" grant against levy, so that only one financial transaction is involved; this is instead of operators having to pay a levy and then claim a grant separately. A credit balance will mean receipt of a net grant, while a debit balance will require the payment of a net levy.

El Elimination of the sliding scale of levies according to size of payroll.

O The acceptance of a rolling five-year training plan—details to be announced soon—to enable the Board and the industry to achieve a more stable and progressive programme.

These and other changes reflect the response of all sectors of road transport to the Board's consultative document, issued last October, which asked for comment on all the feasible options in future grant and levy schemes. Board chairman Mr K. C. Turner said on Monday that although the response had been too varied for all opinions to be catered for, there had been strong agreement of views on certain issues. And at the February 18 meeting of the Board itself, there had been a unanimous decision in favour of imposing a cut-off which would take the very small operators out of levy and grant schemes.

The 34,000 very small companies, with payrolls covering perhaps two, three or four people, employ altogether about 60,000 out of the total of 900,000 within scope of the Board. The net financial saving to the Board will be about £tm. Of the 34,000 establishments, 20,000 are in the garage trade, 8000 in haulage and 3000 in the psv sector—the rest being scattered among many other activities.

Mr Turner said that training was very difficult for these small firms to undertake. Fewer than 10,000 of the 34,000 have been engaged in training. A very small number of them are in group training associations, and the Board is determined to find a means of maintaining this sort of established activity. But the TASC programme will not be affected by the £5000 cut-off level: most of the firms covered by the TASC programme are in a higher payroll bracket—up to about £25,000.

Very small operators will still be able to opt for inclusion in grant and levy schemes—but they will have to pay a grant. as though their payroll was £5000. For instance, if a firm with a payroll of £3500 opted for inclusion, it would still have to pay the levy percentage on £5000.

New stake in grants In the new training year, each of the three industrial committees for the main sectors will be responsible for considering how the training needs of its sector can best be met, and also for recommending the grant that should be paid for approved training. Grant proposals for activities common to the whole industry will be made by the training policy committee. All these draft proposals will go before the finance and general purposes committee before being submitted to the Board.

Grant schemes will be "close ended"; in other words, the Board will allocate to each sector a fixed sum for grants in each period. And the Board will retain control of the levy—which will be applied at a common rate (not yet fixed) across the sectors.

Each industrial committee has members appointed by the Board and then invites others to join; a new development will be to see that representatives of warehousing, furniture removals, bodybuilding and body repairing—and other activities having no direct representation on the Board—are given places on these committees.

At present, operators within scope of the RTITB pay a levy and then, if they undertake training, claim grants—which are paid subsequently. In the interim, firms' money is in effect lent out to the Board. At the February 18 meeting the Board unanimously agreed to introduce "netting", for which certain interests have been pressing for some time. This system will start in 1972.

Instead of levy demands and grant claims being treated as separate financial transactions, the grant and levy figures for a particular firm will be matched to produce a final credit or deficit figure. Movement of cash will be reduced, and so will paperwork.

Since block grants are expected to continue, the aim by 1973 is to have a stable netting system under which the first levy instalment would be netted against the block grant and the final levy instalment—in, say, December—would be netted against the specific grants which the firm has claimed for particular training activities. Since the predetermined block grant should equal the first levy instalment, no creditor debit should be produced at this stage, so only the second-stage levy/grant should produce any actual cash movement for those firms involved in block grants.

Long-term The promised five-year plan has been drafted by the RTITB staff and sets out to give precise objectives; to fix training targets within a stated time scale; and to review training resources and needs. It is also aimed at seeing that the levy /grant policy is sensibly linked to the training situation. The intention is to up-date the plan each year, to form a rolling five-year programme. It is likely to include the promised third Motec in the South East when a site can be found.

One aspect of the plan will cover finance. This week the Board revealed, "in view of the concern expressed in some quarters", that it expects to achieve a favourable balance of about flm for the year ended March 31 1971 to set against the accumulated deficit. The chairman said on Monday-that a "near state of equity" would be reached by March 1972 if the present pattern of operation was not altered.

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