Autumn budget: ‘bolder measures’ needed on construction skills

Although funding announced for SMEs training apprentices under 25 has been welcomed, many construction leaders worry that the chancellor’s measures do not go far enough to address urgent skills challenges.

The industry continues to face acute shortages in key trades, prompting renewed calls for decisive action from government that will better support workforce development. Below are reactions from some of the industry’s key stakeholders.

We welcome the chancellor’s acknowledgement of the need to improve the apprenticeship system for SMEs and we look forward to hearing more about how this scheme applies to the construction industry.

The announcement of the money for the youth guarantee, and funding to make apprenticeship training for people under 25 free for small and medium enterprises, at today’s budget is welcome news, particularly considering recent government figures show there are nearly a million young people not in employment, education, or training. 

We need to get more people into construction – our research shows the UK will need over 47,000 additional workers in the industry every year to meet demand. 

It’s vital that employers have simpler and clearer pathways to engage in skills and training.

This would be an excellent way to build on the government’s £600 million construction skills package announced earlier this year, which aims to help young people transition into regular employment. 

Nonetheless, we need to ensure construction growth is stimulated and that we have clear pipelines of work, so that employers have the confidence to invest in skills. 

Skills shortages remain one of the biggest threats to industry resilience. The construction sector needs 250,000 additional workers by 2028 to meet demand. 

The £1.1 billion allocation for apprenticeships and technical training is encouraging, but we hoped for even bolder measures to future-proof the workforce, alongside initiatives to attract more women and underrepresented groups into construction. 

Equally important is ensuring safe, inclusive workplaces once they join, because without this, innovation and safety standards will suffer.

The government’s pledge to make apprenticeships free for under-25s within SMEs may sound positive on paper, but in reality it will do little to move the dial for the construction industry.

The cost of apprenticeship training has never been the core barrier for employers – so removing it won’t address the real issues holding back workforce growth.

The construction industry is facing a workforce crisis of unprecedented scale. To deliver on the government’s own housebuilding ambitions, we need 30,000 recruits across 12 trades for every 10,000 homes built.

Yet the apprenticeship system continues to fall short, not because training is too expensive, but because employers lack the incentives and support to take apprentices on in the first place. 

Employers are not held back by training costs, but by the salaries they are expected to offer and the absence of meaningful incentives that make hiring apprentices viable and sustainable.

If the government genuinely wants to increase apprenticeship uptake, it must introduce measures that make a tangible difference: tax breaks for employers, reduced capital gains for businesses with a high proportion of apprentices, or substantive financial rewards for those investing in future talent.

These are the kinds of reforms that would actually shift behaviour and build capacity across the industry.

The increase in minimum wages for apprentices and under 21-year-olds announced in this budget could present significant recruitment challenges for smaller construction firms who are already among the hardest hit with increasing cost pressures. 

With recruitment being essential to developing the workforce needed to action the government’s ambitions to build 1.5 million homes, we need to balance SME support with fair wages.

While funding SME apprenticeships for under-25s is welcome, it does not come close to the scale of the challenge.

Construction employs around 10% of the UK workforce yet accounts for 15% of all insolvencies, with unemployment having risen by 282,000 over the past year.

Family-run firms cannot hire at the pace Britain needs when their cost base is already being squeezed by last year’s business property relief changes and rising employer taxes.

The chancellor’s decision not to reverse last year’s damaging employer national insurance hike will continue to choke construction employment across the country. The warning signs are already flashing red. 

The recent 6% uplift in the Apprentice Minimum Wage – now nearly 50% higher than in 2024 – means the cost of employing apprentices has soared.

For many SMEs, it now takes an average of a year longer to see any return on their investment in training new talent.

This level of government-imposed wage inflation is unsustainable without urgent counter-measures, through more generous employer incentive payments and/or tax credits for businesses that train.

Free apprenticeship training for SMEs is a positive and welcome step, and one we have long called for. But it will not, on its own, deliver the workforce growth the country urgently needs. 

Rising apprentice wages, alongside rising employment taxes and regulatory burdens, mean many firms simply cannot afford to take on more young people, however willing they may be.

The budget is a reminder that Britain won’t fix its construction crisis by recruiting from only half the population. Women are ready to enter the trades, we just need to open the door.

Right now, too many women are still being shut out of an industry that desperately needs their skills. Until we take gender imbalance seriously – not just in speeches, but in funding, training and recruitment – we’ll keep fighting a crisis with one hand tied behind our back.