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Published: 20/10/2026
Infrastructure, both economic and social, is likely to form part of the Chancellor’s speech on 28 October and, as ever, there is a strong case for protecting existing investments and facilitating delivery. Ahead of the event, BCIS data services director Karl Horton explores what the government should be considering to support the market.
The Autumn Budget presents an opportunity to boost confidence in the infrastructure sector following a period of weaker activity. BCIS’s latest civil engineering forecast estimates that new work infrastructure output will contract by 1.4% in 2026 before returning to growth of 2.9% in 2027.
The picture is of course varied across the market. Some sub-sectors are performing better than others, particularly those that are well-regulated and privately funded. Energy, water and data centre projects, for example, are expected to drive much of the wider sector’s return to growth in 2027, while publicly funded transport and local authority schemes remain more exposed to government spending decisions.
While the Chancellor’s direct influence is greatest over publicly funded programmes, stable regulatory and planning frameworks will be equally important in sustaining momentum in sub-sectors driven by private and regulated investment. Greater clarity over public funding and the pipeline of future work, alongside measures to address project viability and industry capacity, would help ensure planned investment translates into activity on the ground.
A pipeline the industry can plan around
The continued development of the National Infrastructure and Service Transformation Authority’s (NISTA) Infrastructure Pipeline will be central to delivery progress. The March 2026 update was a notable improvement on the first iteration, including a means of estimating future workforce demand to aid industry resource planning and investment.
Ideally, further improvements would provide more specific, project-level procurement dates and routes to market, alongside more detail on funding and workforce projections.
Increased visibility of when and where projects are expected to progress would help contractors and suppliers make more informed decisions about investment, recruitment and resource allocation. It could also help identify potential periods of concentrated demand, where competition for labour and specialist capacity risks putting additional pressure on project costs and delivery schedules. Continued investment in NISTA’s resource therefore remains a priority and could make consistent, practical pipeline updates more achievable.
Stop-start investment cycles must be a thing of the past
Stop-start investment has long held back UK infrastructure delivery, with shifting political priorities and funding decisions making it difficult for both clients and the industry to plan ahead. The government’s 10-year infrastructure strategy has been a welcome opportunity to establish greater continuity, but its complexity means there’s always room for improvement.
The effects of uncertainty generally are already evident at project level. Feedback from BCIS industry panels suggests that, amid rising costs and budget constraints, some infrastructure clients have spent prolonged periods undertaking value engineering exercises in an effort to bring schemes within budget. While these reviews can identify genuine savings, repeated redesign and delayed decisions can leave projects exposed to inflation. Construction cost deflation is rare – BCIS forecasts that civil engineering costs will rise by 13% in the five years to 2Q2031, while civil engineering tender prices are expected to increase by 16% over the same period.
Disruption to central government funding, and the uncertainty that creates, can therefore intensify pressure to value engineer projects, potentially extending pre-construction phases and increasing costs. Funding uncertainty also undermines effective capacity planning across the supply chain. Where delays lead to the loss of skilled labour and other resources, that capacity may not be readily available when projects restart, creating further delays and cost pressures.
The government faces competing spending priorities, including defence and other public services, and some projects may inevitably need to be reassessed. However, maintaining funding continuity for viable programmes would help preserve industry capacity, sustain delivery momentum and avoid unnecessary costs associated with stopping and restarting work. Where changes to funding commitments or project sequencing are unavoidable, early, clear and transparent communication with supply chains is essential.
Early contractor engagement could be a key consideration
The Budget also provides an opportunity to consider how project development and procurement could better support delivery. The Civil Engineering Contractors Association (CECA), for example, has called for greater implementation of early contractor involvement (ECI), including through the Construction Playbook. Involving contractors before designs are fully developed can help identify buildability challenges, test cost assumptions and inform decisions that may affect costs later in the project.
Research by the Centre for Construction Best Practice(1), covering 412 public sector projects, found average cost overruns against original client budgets of 8.56% where contractors were appointed at RIBA Stage 3, and 17.35% where they were appointed at RIBA Stage 4. Some 85% of respondents also agreed that ECI improved collaboration between clients, contractors and design teams.
While earlier involvement is not a guarantee of lower costs, the findings make a useful case for considering it more widely, particularly on complex projects where early decisions can have significant cost implications.
Skills should still be part of Budget conversations
There has been considerable discussion and progress on skills development this year, including the proposed construction Jobs Plan and reforms to the Growth and Skills Levy. However, capacity constraints remain a concern, particularly if demand increases sharply over a relatively short period. Mechanical, electrical and plumbing (MEP) services are one area to watch, with growing demand from sectors such as data centres increasing competition for specialist contractors. Where capacity is stretched, tender prices and project costs could rise, potentially undermining project viability.
Variations in activity across infrastructure sub-sectors could compound these pressures. Privately funded infrastructure projects draw on many of the same trades and suppliers as publicly funded schemes. An uneven recovery could therefore see capacity concentrated in areas where investment is most secure, adding to cost and programme pressures elsewhere.
More detailed workforce projections within the Infrastructure Pipeline, including longer-term forecasts, would help businesses and training providers anticipate demand and identify potential bottlenecks or skills shortages before projects reach procurement.
Budget decisions affecting employment will also feed into the industry’s skills outlook. Higher employer National Insurance contributions and statutory wage thresholds can add to labour costs, influencing decisions on recruitment and workforce expansion. However, the extent of these pressures will depend on the proportion of total project costs attributable to labour, as well as the availability of specialist skills.
Keeping the wheels turning
Recent policy developments are cause for cautious optimism. The latest Industrial Strategy update provides more detail on potential investment across defence, energy and advanced manufacturing, including significant commitments to naval infrastructure, nuclear facilities and renewable energy.
The announcement of Great British Grid has been particularly welcome and will hopefully inform electricity network upgrades and connections by bringing together public and private investment. In turn, this should help progress projects affected by grid capacity constraints.
The challenge now is to build on this momentum. The Autumn Budget is an important touchpoint for turning infrastructure ambitions into deliverable projects. Greater specificity on funding and procurement timelines, consideration of cost pressures on construction firms and better planning for future workforce needs should all be part of the wider conversation, recognising that the sub-sectors leading the recovery and those lagging behind will need different forms of support.
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(1) Centre for Construction Best Practice – Constructing Certainty – here
