The Chartered Institute of Building (CIOB) has today reacted to the Chancellor’s budget announcement. 

Eddie Tuttle, Director of Policy, Research and External Affairs at CIOB, said: “We’re glad to hear there are no immediate rises planned to National Insurance and pension contributions, as well as business rates, which will provide consistency for the industry. However, it should still be noted the construction industry continues to face significant economic challenges and many companies, particularly Small and Medium-sized Enterprises (SMEs), face tough times.  

“As a sector made primarily of SMEs (more than 99 per cent of the UK construction industry are SMEs), many companies are already struggling with rising costs and a dwindling workforce.  

“In the 12 months to August 2025, almost 4,000 construction companies in England and Wales became insolvent, roughly 76 a week and the most of any industry. 

“As we said in our October report, which focused on the industry’s capacity and capability challenge, Government and industry leaders must look beyond short-term fixes and explore longer-term solutions which aim to reduce volatility and shift the sector towards being more resilient. We believe having a wider view of the industry will allow for better policy that looks to harness the data the industry already produces and join the dots between the different government departments that cover construction. 

“We also urge Government to take forward long-overdue VAT reform. Introducing VAT on demolition would help level the playing field between demolition-and-rebuild projects and retrofit. At present, retrofit work is subject to VAT while demolition is not, making the more sustainable option far less financially attractive. 

“In addition, improving procurement practices must be a priority. We encourage the Government to promote procurement strategies that involve early engagement with local suppliers and create long-term collaboration within the supply chain. This would help build capacity across the industry, support SMEs and ultimately deliver better value and resilience in public projects. 

“Finally, 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.”