On Wednesday Chancellor Rachel Reeves shared the annual Autumn Budget. One key announcement was the increases in minimum and apprenticeship wages but with the construction workforce already a challenge, is this providing a barrier to employment with SMEs?
Efficiency North is a consortium dedicated to building communities in the North of England through work with social housing providers. Here, Chief Executive, Lee Parkinson shares his insight on the latest news.
Lee said: “The Autumn Budget confirms what the sector has been warning for some time: safety and maintenance costs for local authority (LA) housing have risen by 90% since 2019–20. For social housing providers and LAs already working with extremely tight margins, we need to ensure that the future is sustainable and they are fully supported in delivering government targets and resident well-being.
“Firm policy and investment to support the acceleration of affordable homes will be essential to turn Labour’s ambition to ‘Get Britain Building’ into a deliverable programme.
“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.
“This challenge comes on top of what we’re already seeing, with a slowdown in new starts on site, compounded by high development costs, labour and materials shortages and ongoing uncertainty around planning reform.
“Despite this, we are cautiously optimistic that the £39bn Social and Affordable Homes Programme from 2026 will provide much-needed funding to expedite plans. Likewise, the Chancellor’s expectation that net housing additions could rise to 305,000 by 2029–30 is positive assuming planning reforms deliver as intended.
“Funding is only one part of the solution. Increasing registered provider capacity and strengthening supply chain resilience must also be prioritised if these programmes are to have real impact. And with constrained public finances, the case for efficient, low carbon, cost-effective construction solutions becomes even stronger.
“As an industry, we are ready to get building, and we remain committed to providing homes for those who need them most.”
To find out more about Efficiency North, visit: https://www.efficiencynorth.org
