Budget blues mustn’t be allowed to undermine skills momentum

The Autumn Budget renewed concerns over the cost of doing business for many in construction. With minimum and living wages due to rise again in April 2026, BCIS chief economist, Dr David Crosthwaite, shared his thoughts on the Budget and its implications for training and recruitment progress.

Budget blues mustn’t be allowed to undermine skills momentum  

Skills gaps and construction are mentioned in the same breath so frequently the labour surplus experienced pre-global financial crisis feels like a distant dream.

Budget commentary has been no exception. Critique of hikes to employment and business costs claimed the limelight and many were quick to note how the Chancellor had missed an opportunity to address construction’s workforce shortfall further.

But should one fiscal event be allowed to rob the sector of new workers and apprentices?

Efforts to coax younger people into apprenticeships and work in the Budget were very welcome but on their own, may not add up to much for construction.

Free training for under-25 apprentices for SMEs is certainly needed, particularly for sectors like construction where the vast majority of businesses are SMEs with limited financial wiggle room.

Funding will derive from a more-than-£1.5 billion-pot, comprising £820 million for the Youth Guarantee – earmarked for six-month paid work placements for 18-21-year-olds on Universal Credit – and £725 million for the Growth and Skills Levy.

Coupled with the minimum wage increases, the injection is a bid to make work more attractive than benefits to young people but could be seen as counterproductive given the cost pressures higher pay and future tax threshold freezes will bring.

These will only increase the cost of doing business and likely sap employers’ ability to hire and train.

However, is a below-average Budget a good enough reason for training and recruitment progress to stop in its tracks?

Perhaps not, particularly given the rise in government-industry investment in skills over the past 18 months.

As of this year, employers in construction and the built environment providing foundation apprenticeships can claim up to £2,000 per apprentice (depending on their age and other criteria) to cover costs related to their employment⁽¹⁾.

In March, more than £600 million was also confirmed to develop 10 Technical Excellence Colleges, produce 60,000 extra in-demand trade workers and create over 40,000 industry placements each year for further education students and advanced apprentices.

We’ve also seen the launch of a Construction Skills Mission Board and last year, the £140 million investment (including a £100 million investment from the National House-Building Council) in 32 Homebuilding Skills Hubs – to be established by 2028⁽²⁾. This will see apprenticeships fast-tracked with around 5,000 more apprenticeship places up for the taking.

Such investments are undoubtedly creating the right opportunities and there comes a point where businesses must find a way to grab the bull by the horns.

This includes creating certainty and confidence where the economy fails to and taking advantage of funding and support to reinforce the labour pipeline.

Financial due diligence in projects, engaging with Local Skills Improvement Plans and fully exploring available training grants and subsidies (i.e. through the Construction Industry Training Board) will all help.

That’s not to say the situation facing construction employers isn’t tough. Job vacancies are down and the UK construction workforce is shrinking, both in part symptomatic of a stubborn economy and the increase in employer National Insurance contributions introduced in April.

But as I said before, one ill-judged Budget should not be allowed to derail future progress.

Some of its measures are actually plus points for construction firms.

For instance, the £48 million set aside to boost planning capacity, including the recruitment of 350 additional planners in England. These will be in addition to the 300 recruits Labour promised in its manifesto and according to the government, will take the total number of planning hires to 1,400 by the end of this Parliament.

This is good news where uncertainty is concerned. More planners on the ground should push work through the pipeline and provide contractors with greater clarity to capacity plan and consider where recruitment or training is needed and viable.

Continuing this trend, the Budget also confirmed that £902 million will be distributed to 11 mayoral strategic authorities (MSAs) with the highest growth potential in the North and Midlands for local infrastructure, business and employment support and skills programmes.

A new £500 million Mayoral Revolving Growth Fund for mayors in these areas will be invested in ‘game-changing’ growth projects alongside the private sector too.

At a first glance, these announcements seem promising for supporting local construction demand, pipeline certainty and recruitment opportunities. This will of course depend on how MSAs choose to invest this money and the local growth projects they prioritise – but it’s a start.

There’s no sugar-coating the fact that post-Budget, construction is being asked to do more with less.

Waiting for the Chancellor to save the day is no longer an option though – construction employers must seize the opportunities on the table and begin to change the skills narrative themselves.

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^{(1) GOV.UK – Employing an apprentice  – here}

^{(2) GOV.UK – New skills hubs launched to get Britain building – here}