How the Autumn Budget Affects Construction Hiring
Every Budget lands on site eventually, as a change to the wage bill, a new tender requirement or a shift in workload. The Autumn 2026 Budget brings all three.
Minimum wage rates rise in April, large public projects face a firm apprenticeship target, and an infrastructure pipeline worth more than £750 billion is due before the end of the year.
So how does the Autumn Budget affect construction hiring, and should you raise your budget now or hold your nerve until 2027? Let’s take a closer look at what it means for your wage bill, apprenticeships and workload. We also cover how to plan your temporary and permanent recruitment and secure the skilled trades and labour your projects depend on.
At a Glance:
- The National Living Wage rises 3.9% to £13.21 an hour from 1 April 2027.
- Headline National Insurance rates are unchanged, so employer NIC rates hold steady.
- Large government construction and infrastructure projects must have at least 3% apprentices.
- Over £750 billion of planned infrastructure investment will need more than 650,000 workers.
- Employers who plan early, mix temp and permanent staff and build in social value will be best placed.
Need Apprentices and Local Workers for Public Contracts?
The new 3% apprenticeship requirement and stronger social value scoring reward contractors who can show trained local recruits. See how ITS Framework CIC upskills local candidates before your project starts, or talk to your local ITS team.
What Does the Autumn Budget Mean for Construction Jobs and Wage Bills?
A 3.9% rise in minimum wage rates from April 2027
The Chancellor confirmed that from 1 April 2027 the National Living Wage rises by 3.9% to £13.21 an hour. The rate for 18 to 20-year-olds rises to £11.27, and the rate for 16 to 17-year-olds and eligible apprentices rises to £8.31.
The direct impact falls on labourers, site operatives and new entrants; their pay sits closest to the legal minimum. You can expect knock-on pressure as skilled workers look to protect their pay gap.
No change to headline National Insurance rates.
The government kept its commitment not to raise the headline rates of income tax, National Insurance contributions or VAT. That gives employers a stable basis for costing headcount through 2027.
Apprenticeships and Social Value Carry More Weight
The biggest measure for construction recruitment is a new requirement that at least 3% of the workforce on all large government construction and infrastructure projects must be apprentices.
New guidance on social value in government procurement also means bidders for major contracts will be judged on creating high-quality jobs, tackling local skills shortages and supporting young people into work.
The good news is that there is government funding to help.
The government has committed £100 million across 2027-28 and 2028-29 to expand mayoral apprenticeship brokerage from seven to 14 Mayoral Strategic Authorities.
It also confirms a £3,000 Youth Jobs Grant for hiring eligible young unemployed people. Non-levy employers in England taking on new young apprentices can also get a £2,000 payment.
You can find out more about how our team at ITS supports young people in construction here.
The Housing and Infrastructure Pipeline Behind Future Demand
Workload drives hiring. An updated Infrastructure Pipeline (which is due before the end of the year) will set out more than £750 billion of planned investment over 10 years and an expected workforce requirement of over 650,000 people.
On housing, an extra £1.5 billion will fund around 10,000 homes in England, prioritised for Social Rent and council homes. That takes the Social and Affordable Homes Programme above £40 billion over 10 years. A zero rate of VAT on land sold to social housing providers starts also due to start on 1 April 2027. On top of that, the new Your First Home scheme will support an estimated 20,000 new home purchases.
This points to sustained demand for civil and infrastructure engineers and mechanical and electrical specialists, as well as site teams and trades on housing schemes.
Construction Labour Supply in 2027 and Beyond
In the short term, the hiring situation is something of a ‘steady-as-she-goes’ situation. The Office for Budget Responsibility (OBR) expects unemployment to rise to 5.1% in the second quarter of 2027 but then to fall to 4.1% by the end of the forecast period.
The longer view is tighter.
CITB’s Construction Workforce Outlook 2026-2030 estimates the industry needs around 41,200 extra workers a year, or roughly 206,000 by 2030. The immigration system has also been tightened for low and medium-skill workers. That makes it more important to widen your talent pool, for example by hiring veterans.
Hiring Construction Staff After the Autumn Budget: A Practical Plan
- Use temporary labour to bridge 2027. Flexible temp resourcing matches headcount to confirmed work while demand stays subdued.
- Secure key permanent roles early. Site managers, quantity surveyors and engineers are hard to replace mid-project, so lock in the construction professionals you need before programmes ramp up.
- Price in April 2027 wage rates now. Bids running past April should reflect the new rates.
- Plan apprentices and social value at pre-construction. ITS Framework CIC trains and certifies local candidates in tickets such as Telehandler, Hoist, Slinger/Signaller and Traffic Marshal. That gives you site-ready recruits and measurable social value.
- Use local knowledge. Speak to your nearest ITS office.
Ready to Plan Your 2027 Construction Hiring? We Can Help.
For over 50 years ITS has supplied skilled, unskilled and professional staff on a temporary and permanent basis to a range of main contractors, developers and subcontractors.
With regional teams across Central and Southern England and South Wales, we can advise on local pay rates and where the talent is. Our not-for-profit ITS Framework CIC trains people at the pre-construction stage, which can help you meet apprenticeship and social value targets. To plan your resourcing, get in touch with ITS or find out more about hiring with us.
FAQs
How does the Autumn Budget affect construction hiring in 2027?
It raises entry-level wage costs and adds apprenticeship and social value expectations on public work. The National Living Wage rises 3.9% to £13.21 an hour from 1 April 2027, and large government construction and infrastructure projects must have at least 3% apprentices.
Did the 2026 Budget raise employer National Insurance?
No. The government kept the headline rates of income tax, National Insurance contributions and VAT unchanged. Employer costs will still rise through higher minimum wage rates from April 2027.
What apprenticeship funding is available after the Budget?
The Budget commits £100 million over 2027-28 and 2028-29 to expand mayoral apprenticeship brokerage across 14 areas of England. Non-levy employers in England can receive £2,000 for each new young apprentice, and a £3,000 Youth Jobs Grant supports hiring eligible young unemployed people.
Should construction firms hire temporary or permanent staff after the Autumn Budget?
Most employers will benefit from a mix. Temporary staff give flexibility while demand stays subdued into 2027, and permanent hires secure hard-to-replace professionals before the pipeline grows. A specialist construction recruitment agency can help you balance the two.
