November saw Chancellor Rachel Reeves unveil the government’s much talked-about Autumn Budget, and as expected, there was plenty to dissect for the construction industry.
With a promise of “getting spades in the ground and cranes in the sky”, the sector formed a major focus of the latest budget, with several significant developments set to impact those working in construction in both the immediate and longer term future.
£120bn on transport, energy and housing infrastructure
In positive news for the construction industry, £120bn of spending will be retained to deliver infrastructure projects in transport, energy, net zero and housing over the next decade. Reeves also reinforced the government’s pledge of £39bn for its Social and Affordable Homes programme.
This included £891m for the huge Lower Thames Crossing Project, as well as backing for the Docklands Light Railway extension, regional rail upgrades and the Northern Powerhouse Rail Initiative.
Boosting planning capacity
In an effort to remove red tape and clear a backlog of stalled projects, the budget pledged an additional funding of £48m to boost capacity in the planning system. Amongst the plans for this funding, is the recruitment of an additional 350 planners in England, bringing the total number up to 1,400 by the end of this parliament.
An increase to minimum and apprenticeship wages
From 1st April 2026, the National Living Wage will rise by 4.1% to £12.71 per hour for workers aged 21 and over, while the National Minimum Wage rate for 18-20-year-olds will increase by 8.5% to £10.85 per hour.
In addition, both the National Minimum Wage for 16-17-year-olds, and apprenticeship wage will increase, rising by 6%, taking it to a base of £8 per hour.
Landfill tax reforms scrapped
It was confirmed that the government would not move forward with controversial proposals to implement a single rate of landfill tax. Instead, the existing two-rate system will continue to apply, which currently stands at the rates set by HMRC of £4.05 per tonne for less polluting landfill, compared to the standard rate of £126.15 per tonne.
Changes to personal tax allowance
UK income tax thresholds will be frozen at their current levels for another three years beyond 2028. This means the personal tax allowance will stay at £12,570 until April 2031, and the higher rate threshold will remain at £50,270. National Insurance thresholds will also be frozen until 2031.
However, this means that more taxpayers will be pushed into higher tax brackets as wages increase faster than the thresholds — also known as fiscal drag.
Increased budget for training
In an effort to find a long-term solution to the growing skills shortages, over £1.5bn has been set aside to fund placements, training and apprenticeships for schemes for the under 25s.
Staggered fuel duty increases & electric vehicle tax changes
Reeves confirmed that fuel duty will stick at its current rate until the end of August 2026. There will then be a staggered reversal of the 5p fuel cut, originally introduced in 2022, between September and December 2026, before an increase to fuel duty rates by Retail Price Index inflation from April 2027.
From April 2028, a new electric road vehicle tax will be introduced, charging 3p per mile for EVs and 1.5p per mile for plug-in hybrids.
You can read the Autumn Budget in more detail here.