Industry reaction to Chancellor’s Autumn Budget 2025

Yesterday Chancellor Rachel Reeves delivered her Autumn Budget 2025. We’ve rounded up a selection of responses to the budget and their impact on FM , employment, sustainability, transport, and the built environment infrastructure.

Workplace & Facilities Management

Linda Hausmanis, Chief Executive Officer for IWFM: “As with all budgets, there is much to digest and we’ll have more to say in the coming days and weeks. The balancing act this Chancellor has conducted is plain to see.

‘The government was careful to position the forthcoming 50p rise to the minimum wage as positive news for low earners (without saying that 20 per cent of that will, of course, return to the exchequer as income tax, while thresholds are held). It may provide a small measure of relief against the ongoing cost of living for many frontline workers.

“IWFM will never argue against a highly paid, highly skilled workforce, but the minimum wage increase goes far beyond the lowest paid employees. The new minimum hourly rate of £12.71 equates to an annual FTE of nearly £25k per year. Until recently, this would have been the salary of a second or third-jobber in many operational or administrative facilities roles. Those experienced staff, understandably, expect to be paid more than their entry-level colleagues, and the upwards ripple through the pay scale creates huge pressure on the cost of employing people.

“Changes to salary sacrifice pension schemes and the continued freeze on the NICs secondary threshold will only add a further cost to employers already facing a raft of increases. Difficult decisions will need to be made.

“There are only so many levers available to employers to mitigate those costs, so we expect to see a chilling effect on recruitment and headcount, on pricing and on investment plans – or a further push for technology to provide solutions. With the ongoing skills crisis and lack of investment therein, we may see an acceleration in already record-high M&A activity.

“For a sector that provides great opportunity at entry level, there are positives emerging in the form of an expansion of the Youth Guarantee and on apprenticeship funding for SMEs.

“But overall this budget is both thin pickings for frontline workers and a challenge to business that feels at odds with a growth economy. On a first reading we’re underwhelmed at the choices made by this government.”

Infrastructure

Andy Milner, CEO Amey: “The Chancellor has delivered a Budget that aims to provide much-needed stability and certainty for the UK economy. In a period marked by economic headwinds and ongoing global uncertainty, this focus on stability can only be welcomed. However, the tax rises announced will be felt by both businesses and individuals, and it will be important for government and industry to work together to manage these impacts.

“We welcome the Government’s renewed commitment to major infrastructure projects such as Northern Powerhouse Rail and the Lower Thames Crossing. As the government progresses with its infrastructure spending priorities, we would like to see further clarity and commitment to the recently published NISTA pipeline, including clear funding commitments and a greater role for public-private partnership models to accelerate delivery and maximise value.

“These investments are vital for improving connectivity and supporting regional growth. Early and transparent collaboration with partners will ensure these schemes can be delivered efficiently, sustainably, and in a way that maximises value for the regions they serve.”

Circular Economy 

Gavin Graveson, CEO Veolia UK & Ireland: “This was a missed opportunity for the Government to unlock investment in the UK’s circular economy and deliver green growth, jobs and infrastructure.

“It is extremely disappointing that the Government has neglected to make any meaningful increase to the Plastic Packaging Tax (PPT), something the industry has made repeated requests for. By not increasing the PPT to £500p/t with a 50 per cent mandatory recycled content threshold, the Government is seriously risking the investment needed for crucial domestic recycling infrastructure, providing green growth and green jobs.

“We welcome the clarity that the Landfill Tax will remain as two separate rates, and that the Government has listened to industry concerns, but this alone will not solve the billion-pound scourge of waste crime in this country. While sense over the rates has prevailed, we need a realistic plan to urgently tackle organised gangs undermining the legitimate operators.

“It’s clear for all to see that the circular economy has a key role to play in driving growth in this country and there are further steps the Government could now take to accelerate this crucial industry.” 

David Gudgeon, Head of External Affairs at Reconomy Connect, a brand by international circular economy specialist Reconomy: “It’s encouraging to see the Government respond to industry concerns by stepping back from converging the two rates of Landfill Tax and instead committing to prevent the gap between them widening in the years ahead.

“However, the planned uplifts to the lower rate – forecast to raise an additional £420 million in revenue over the period to 2030/31 – underline the need for a balanced approach. Policy must continue to drive circularity and reduce incentives for waste crime, while also supporting essential sectors like construction as they transition toward more sustainable models in a challenging economic climate.

“Ultimately, the most robust way for businesses to shield themselves from future tax rises is to accelerate circularity. Keeping materials in use for longer, maximising reuse and recycling, and designing out waste not only strengthens environmental performance but also reduces operating costs and mitigates tax and compliance risks over the long term.”

Real Estate & Startups

Natasha Guerra, Founder of flexible office space provider, Runway East: “Once again Rachel Reeves has claimed to be on the side of startups – whilst revealing she doesn’t understand them. The decision to treat flexible and serviced offices as one large property rather than multiple smaller units means startups face higher costs. The business plans being written by aspiring founders across the UK just got more expensive.

“It’s simple – fast growing businesses choose flexible workspaces over traditional leases. But now changes to business rates mean they’ll no longer get Small Business Rates Relief if they work in a flexible space. Our spaces are not classed as individual offices, and we cannot apply small business rates relief for the businesses we host because our flexible workspace is treated as a single unit. We will have no choice but to pass this cost on, making flexible workspaces more expensive for SMEs to access – at the very time when getting people back into high-quality offices is critical for driving productivity.

“Access to flexible workspace – which is generally more affordable than committing to a single unit – has never been more important for SMEs, especially as the cost of space in our cities continues to soar and when business want to get people back into the office.”

Emily Wood, Partner and Group Head Real Estate Dispute Resolution at city law firm DMH Stallard: “The new high value multiplier for units valued at more than £500,000 of 50.8p in the £ is lower than might have been feared by the online giants.

“The national standard multiplier of 48p is a saving of 7.5p in the £, but no cause for celebration.

“The moment of truth will come with the imminent publication of the draft rating list due 1 April 2026. At that point ratepayers will have some clarity as to cash payable from 1 April 2026.”

Electric Vehicles 

Mark Caskey, Managing Director of Mitie Projects: “We welcome the Government’s move to extend the Electric Vehicle (EV) Grant and boost its funding, giving drivers and businesses real confidence to switch to electric. Over 35,000 drivers have already made the switch thanks to these grants, and today’s announcement is a clear signal that the UK is serious about an all-electric future.

“However, introducing a pay-per-mile charge for EVs, on top of existing road taxes, sends a mixed message. Businesses need certainty to invest in cleaner fleets, not policies that could stall momentum and threaten jobs in UK manufacturing”

“With a fleet of over 6,500 EVs, we know that incentives alone aren’t enough. Success depends on a robust charging infrastructure, so we welcome the £200m boost to accelerate charge point rollout and stand ready to work with Government to ensure these measures drive growth, sustainability, and innovation across the economy.”

Guy Bartlett, Believ CEO: “Today’s budget sends an encouraging signal to the industry and to drivers that the government is serious about accelerating the UK’s transition to EVs.

“The extension of the grant scheme, and a 10-year CPO exemption from business rates show real commitment to supporting affordable, accessible EV charging for all.

“We believe the £200 million charge point funding should be focused primarily on helping local authorities recruit the people they need to support the rollout and be used in a very targeted way to deliver charge points in sites which would not otherwise be commercially viable. We believe private sector funding can cover the vast majority of locations.”

Antoine Picron, Director, Europe Public Policy, ChargePoint: “ChargePoint believes any measures which support EV adoption are positive as society works towards the end of sale of ICE vehicles in 2030 – just five years away.

“We welcome the decision of the Chancellor to confirm a 10-year 100 per cent business rate relief for eligible EV charge points and EV-only forecourts. This is fantastic news for our Charge Point Operator (CPO) customers, addressing industry concerns that high business rate bills on charging bays would hinder investment.

“The provision of an extra £200 million to improve and extend charging infrastructure is a welcome incentive. This will support buyers switching to EVs as the whole industry – including both vehicles manufacturers and the charging solution provides like ChargePoint – work together to accelerate the roll-out of affordable vehicles and places to charge them.”

Mike Nakrani, CEO, VEV: “The decision made in the Budget to exclude electric commercial-fleet vehicles from eVED is a smart and welcome move. It recognises the essential role fleets play in the UK economy and removes an unnecessary cost barrier for operators looking to go electric.

“The Government has also made real progress with the Depot Charging Scheme, which is already helping fleets well along the path to installing reliable, high-power charging at their depots. But to unlock the full potential of commercial e-fleets, this support must go further.

“Expanding the Scheme, in addition to the measures speeding up grid-connection processes and backing smart-energy solutions, would give businesses the confidence to electrify at scale. With the right policy backing, the UK can accelerate cleaner, more efficient commercial transport – and we at VEV are ready to help fleets make that transition.”

Construction

Dr David Crosthwaite, Chief Economist at BCIS: “There’s little in this Budget for the construction sector.

“Plus points include £900 million additional capital for the Lower Thames Crossing scheme, free training for under-25 apprentices for SMEs, and steadfastness on Spending Review investments in infrastructure and housing.

“Yet the Chancellor’s celebration of the government’s planning overhaul to ‘get Britain building’ seemed misplaced.

“Construction output and housebuilding data tell another story – one of slow demand and a shrinking workforce. The Chancellor called private investment the lifeblood of economic growth. But as we found out first from the OBR’s leak, the threshold for employer National Insurance contributions (NICs) will freeze from 2028-29 and NICs will be charged on salary-sacrificed pension contributions.

“Will this government ever learn from the unintended consequences of its policies?

“Increasing the cost of doing business is likely to be inflationary. Higher costs will inevitably be passed on, placing further upward pressure on tender prices and reducing firms’ ability to hire. This could pile on more friction at a time when construction activity is already fragile.

“The above-inflation rise in the minimum wage for young people is also not as shiny as it sounds. It assumes that economic conditions are conducive for businesses to increase recruitment. That’s not currently the case, as evidenced by the high unemployment rate.

“For construction, already faced with chronic labour gaps and rocky investor confidence, this Budget might create more issues than it solves.”

Julie Palmer, Partner at Begbies Traynor: “The construction sector and property market has been almost downing tools in the run up to the Budget, and many are likely to be disappointed to see more tax rises and another hike in minimum wage.

“We have seen the large housebuilders, property developers, agents and landlords being able to weather the storm of the past few years, with many seeing growth and record profits despite ongoing challenges. What will be difficult to avoid is the impact on the smaller businesses in their supply chain, and while the impact of the tax increases and minimum wage rises will take longer to filter through, there could be rises in restructuring, refinance or exits in the pipeline. For the larger players in the market their main concern must be skills shortages and supply chain disruption from businesses collapsing, now and in the future.  Yes, there is an opportunity to sweep up the skilled workforce, assets and project pipeline from these distressed businesses, but any policy decisions that hinder construction output will have wider knock-on effects for the property market.

 “The construction industry and property is central to UK growth and with significant targets and investment, there is opportunity if we can scratch below the surface. There must be long-term strategy to solve skills gaps, control material cost inflation, remove planning constraints and kickstart the property market so it works for the buyers, sellers and professionals within this vital industry.”

Employment

Naomi Clayton, Chief Executive at the Institute for Employment Studies: “Today’s Budget included a welcome focus on youth employment with investment in the Youth Guarantee, including the Jobs Guarantee scheme for 18-21-year-olds, and more support for SMEs to take on apprentices under the age of 25. Nearly a million 16-24-year-olds – one in eight young people – are out of work and not in any form of education or training, and the government should aim to ensure that every young person can access the support they need. Meanwhile, the OBR assesses that the government’s new Pathways to Work support offer for disabled people and people with health conditions will only have a modest impact on employment, and there appears to be no plans to fast track this investment. With unemployment rising and health-related economic inactivity at a record high, it is critical that the government sets out more details on its plans, accelerates progress where it can and scales up what works.”

Energy 

Hamid Salimi, Residential Product Manager, Daikin UK: “Daikin welcomes the government’s plan to reduce energy bills by an average of £150. Bringing down the cost of electricity will undoubtedly ease the cost-of-living crisis. This will make low-carbon heating and cooling more affordable and encourage households and businesses to make the switch.”

SMEs

Aman Parmar, Head of Marketing at BizSpace, a leading provider of flexible workspaces for SMEs: “As the government grapples with balancing fiscal responsibility and supporting economic growth, the Autumn Budget has now been delivered, marking an important moment for SMEs in the UK. With business sentiment stagnating and confidence in government support diminishing, SMEs had been hoping for measures that meaningfully improved the environment in which they operate. Early reactions suggest that this has not been achieved.

“The Chancellor has chosen to lean heavily on the tax system to stabilise the public finances. The overall tax burden is set to rise to just over 38 per cent of GDP within the forecast period, reaching an all-time high. Much of this comes through personal taxation, with frozen thresholds continuing to pull more income into tax and National Insurance. For SMEs, this shows up both in higher wage pressures, as employees seek to offset the drag on their take-home pay, and in softer demand, as households adjust to reduced disposable income.

“Among the measures announced, two stand out as particularly significant for smaller businesses. The first is the decision to apply National Insurance to salary-sacrificed pension contributions. Many SMEs rely on these arrangements to improve overall reward packages without inflating headline salaries, and the removal of their NIC advantage raises employment costs at a time when margins are already thin. Employers now face the choice of absorbing the cost, reducing the generosity of schemes, or reshaping pay packages, none of which is straightforward when competition for talent remains tight.

“The second is the reduction in corporation tax writing-down allowances. This effectively raises the tax cost of investing in plant, machinery and other qualifying assets. For capital-intensive SMEs, it increases the hurdle rate for investment and makes decisions about upgrading equipment, embracing automation or expanding capacity more difficult to justify on an after-tax basis.

“There is some short-term relief through business rates reforms, which SMEs have long been advocating for. Retail, hospitality and leisure properties stand to benefit from lower multipliers, and a new transitional relief package will cap sharp rises following the 2026 revaluation. However, businesses in higher-value premises – particularly in London and the South East – are likely to face rising bills over the medium term once these temporary supports fall away.

“While SMEs continue to demonstrate resilience and a degree of optimism about their own prospects, they need the government to match that confidence with practical, targeted support. Higher taxes raise operating costs while simultaneously reducing consumers’ purchasing power, dampening demand for goods and services. For many small businesses, that double squeeze is becoming increasingly hard to absorb.

“It remains critical that the government finds ways to ease some of the pressures small firms face. National Insurance contributions and business rates remain particular pain points, cited consistently by SMEs as constraints on growth. There is a clear opportunity for the government to create a more growth-friendly environment by modernising the tax system and offering incentives that support innovation and investment. Owners who are already stretched thin need meaningful support rather than further uncertainty.”

Recruitment

Samantha Hurley, Managing Director at APSCo UK: “The one thing the UK economy needed from this Budget was stability and confidence-boosting measures. Unfortunately, before the Chancellor even spoke, markets were unsettled by leaks and speculation. While there are some positive elements, such as an extension of enterprise incentives and other tax support to “scale up businesses” these have been overshadowed by the chaotic lead-up and the disappointing detail of today’s announcements.

“Recruitment and workforce solution firms – already under strain from flat economic conditions, cost-of-living pressures, and the looming Employment Rights Bill implementation – now face rising costs and added complexity. Despite words of support towards entrepreneurs taking risk and businesses choosing to invest and grow in the UK, very little was offered to boost business.

“Employer liabilities will increase with higher National Living Wage rates, tightened salary sacrifice rules for pension contributions that slash NIC exemptions from £60K to £2K, meaning increased NICs and rising business rates. At the same time, sweeping reforms in the Employment Rights Bill risk creating barriers to hiring and undermining the Government’s own ambition to reduce business administration by 25% by 2029.

“We are seeing fragile growth. Our latest Hiring Trends – produced in conjunction with Bullhorn – shows a steady rise in contract hiring in the last two months. We need to see more support to boost this trend, but doing so requires appropriate change that is supported by businesses.

“As we have said before, the Employment Rights Bill introduces sweeping reforms, including guaranteed hours for temporary staff and day one rights against dismissal, that go far beyond what is necessary to protect workers. Reform is needed, but it must be nuanced and necessary. Different workers require different safeguards, and businesses need freedom to access talent. The current approach risks shrinking the labour market and stifling job creation.

“We urge the Government to work with industry to strike the right balance, protecting workers while enabling flexibility and growth. That necessitates a focus on a pro-workforce agenda, improved trade conditions with Europe, and policies that boost jobs rather than add cost and complexity that are critical to the UK’s economic resilience.”