Budget 2026: what it means for utilities, construction and infrastructure

The Chancellor delivered the Budget today. We’ve cut through the noise and pulled out the parts that matter to contractors, utility firms and the people who work for them, along with what we think it means for training and workforce planning.

Budget speeches tend to be long on headlines and short on detail. If you run a crew, manage a contract or work on the tools, most of what was said today won’t change your week. Some of it will, though, and a few measures could shape the work coming through over the next ten years.

Here’s our plain-English summary, sector by sector.

The short version

• A £750bn infrastructure pipeline over 10 years, needing more than 650,000 workers
• At least 3% of the workforce on large government construction and infrastructure projects must be apprentices
• The fuel duty cut, red diesel cut and HGV road tax holiday all extended to 1 July 2027
• Mileage rates improved for people who use their own vehicle for work
• National Living Wage rises to £13.21 an hour from April 2027
• No rise to the headline rates of Income Tax or National Insurance

1. The pipeline of work
   The government will publish an updated Infrastructure Pipeline before the end of the year. It sets out more than £750bn of planned investment over the next decade and an expected workforce requirement of over 650,000 people.

Alongside that:

• The National Wealth Fund gets an extra £15.4bn, including £2bn for a new Energy Wealth Fund. Together with the British Business Bank, that’s £20.4bn of extra investment capacity.
• £1.5bn more for social and affordable housing, plus £4.7bn of government-backed loans through the “Your First Home” scheme, expected to support around 20,000 new homes in England.
• Main construction on the A66 starts next month, a nine-year programme to dual 50 miles of road.
• A review of rail infrastructure costs, chaired by Rachel Skinner CBE, will report within six months.

What it means for you: the work is coming, but so is the competition for skilled, carded people to deliver it. Firms that have their workforce trained and registered before contracts land will be in the strongest position.

2. Apprentices on public projects
   This one matters for anyone bidding for public sector work. The Budget sets a requirement for at least 3% of the workforce on all large government construction and infrastructure projects to be apprentices. More detail will come in a National Procurement Policy Statement, due to be laid in Parliament in March 2027.

There’s also support to help:

• A £2,000 payment for non-levy employers in England taking on young apprentices (confirmed from the spring)
• A £3,000 Youth Jobs Grant for businesses hiring eligible young unemployed people
• £100m over two years for local apprenticeship services across all 14 mayoral areas, matching young people with nearby employers
• The Union Learning Fund returns in England with £15m a year from 2027-28
• £28m to expand Leeds College of Building for more than 2,000 extra learners

What it means for you: if you work in the public sector supply chain, expect apprentice numbers to start appearing in tender questions. New starters will still need the basics before they set foot on site, from EUSR SHEA and National Water Hygiene to CAT and Genny and NRSWA.

3. Power and the grid
   The Budget admits the grid “has not kept pace with demand”. The plans include:

• Great British Grid working with existing network operators to speed up grid upgrades and connections
• Competition introduced into onshore electricity transmission networks
• Powers to prioritise grid connections for strategically important projects
• New clean power will only be bought where it lowers bills and can actually connect to the grid
• The hydrogen levy on gas bills scrapped, with hydrogen projects funded directly by government
• From April 2027, the British Industrial Competitiveness Scheme cuts electricity bills by up to 25% for more than 10,000 energy-intensive businesses

What it means for you: grid reinforcement and connection work should keep the power sector busy. That means steady demand for competent people in substations, overhead lines and cable work, and for the authorisations and safety training that go with them.

4. Water
   A strengthened Water Bill will repeal the legal ban on public ownership of water companies and give mayors stronger oversight of the sector. New data centres that want government support will also have to sign up to a “data centre covenant”, which includes minimising water use and investing in local jobs and apprenticeships.

What it means for you: there’s no new spending figure for water today, but change in how the sector is run is clearly on the way. Hygiene, confined space and SHEA Water standards don’t change, whoever owns the pipes.

5. Running costs: fuel, vans and plant
   Some genuine good news for firms with fleets and plant:

• The 5p fuel duty cut and freeze are extended to 1 July 2027
• The 3.7p red diesel cut is extended to 1 July 2027, keeping it at its lowest level for over 20 years
• The £1 Vehicle Excise Duty rate for HGVs is extended to 1 July 2027
• The 55p mileage rate for the first 10,000 business miles in a car or van is now permanent
• Above 10,000 miles, the rate rises from 25p to 35p from 6 April 2027

For investment in kit, the main-rate first-year allowance rises from 40% to 50% from 1 January 2027, while the main writing-down allowance falls to 12% from April 2027. Most limited companies can still use full expensing, so the change matters most to sole traders, partnerships and leased equipment. Check with your accountant before you buy.

What it means for you: if your engineers, supervisors or operatives drive their own vehicles between sites, the higher mileage rates are worth passing on.

6. Wages and employment costs
   From 1 April 2027:

• National Living Wage (21 and over): up 3.9% to £13.21 an hour
• 18 to 20-year-olds: up to £11.27 an hour
• 16 to 17-year-olds and apprentices: up to £8.31 an hour

There’s no rise in the headline rates of Income Tax or National Insurance, but thresholds stay frozen until 2031 and the employer National Insurance changes from April 2025 remain in place. Two smaller changes to put in the diary:

• From April 2027, payrolling of benefits in kind becomes mandatory, including company vans and van fuel
• From April 2029, salary-sacrificed pension contributions above £2,000 a year lose their National Insurance exemption

What it means for you: entry-level labour costs go up again next spring, so it’s worth budgeting for it now, especially if you’re planning to take on apprentices or labourers.

7. Planning, regulation and payment

• No major changes to building regulations for the rest of this Parliament, other than building safety work, including the Grenfell Inquiry recommendations
• Residential brownfield sites of up to 1.5 hectares will be exempt from Biodiversity Net Gain
• The government restated its commitment to tackle late payment, but there was nothing new on retentions

8. Closer to home

• West Midlands: the Birmingham East Mayoral Development Corporation is aiming for 50,000 jobs and 20,000 homes, and the Midlands Rail Hub was mentioned again
• Greater Manchester and other mayoral areas: more devolved funding and a share of the £100m local apprenticeship service
• Households in council tax bands A to D in England get a £100 energy payment in 2027, and the VAT cut on electricity bills runs until 1 July 2027

How has industry reacted?

Early reaction from construction bodies has been cautious. Most welcomed the investment and the long-term pipeline, but said the real test is turning announcements into projects on the ground. Trade bodies had also asked for employer National Insurance to be reversed and for a ban on retentions, and neither featured toda

What should you do now?

Whether you’re managing a crew of 5 or a workforce of 500, here are four practical steps:

1. Check your card and certificate expiry dates. If the pipeline delivers, there will be a rush for EUSR, NRSWA and CITB training, and nobody wants to be stood down from site because a card has lapsed.
2. Plan for apprentices now. If you bid for public work, the 3% requirement is coming. Think about who you’ll take on and what training they’ll need in their first year.
3. Budget for April 2027. Higher wage rates and payroll changes land at the same time, so build them into your training and staffing plans.
4. Book early in the new year. January to March is always busy, so get courses in the diary before the spring rush.

Need a hand?
Pragmatic Consulting delivers accredited EUSR, CITB, City & Guilds and NRSWA training at our centres in Warwickshire, Manchester and South Wales, online, or on your site for groups of six or more. If you’re planning your 2027 training, give us a call on 01926 674340 or visit www.pragmatic-consulting.co.uk

This article is a general summary of measures announced in the Budget on 28 October 2026. It isn’t financial or tax advice, and some measures are subject to consultation or legislation. Please speak to your accountant or adviser about how they affect your business.