Budget 2026: Fuel duty relief offers breathing space but scaffolding sector faces continued cost pressures

Chancellor John Healey's first Budget has offered some limited relief from rising operating costs and promised longer-term opportunities through construction and infrastructure investment. However, NASC has warned that businesses across the scaffolding and access sector will continue to face significant financial pressures.

Chancellor John Healey has unveiled a Budget designed to provide what he described as “breathing space” for households and businesses, while supporting longer-term economic growth.

Measures on fuel duty, energy costs, infrastructure investment and skills are among the announcements most relevant to the scaffolding and access sector, although there was little immediate relief for businesses struggling with rising costs.

Against a backdrop of higher energy prices and economic uncertainty caused by conflict in the Middle East, Healey ruled out broad increases in headline taxation while promising greater investment in housing, infrastructure and British industry.

The Office for Budget Responsibility (OBR) upgraded its UK growth forecast for 2026 to 1.2%, although higher government borrowing costs remain a challenge.

Clive Dickin, Group CEO of NASC and CISRS, welcomed some of the announcements but questioned whether they would go far enough to help businesses facing immediate financial pressures.

“For NASC members, this Budget offers relatively limited short-term relief alongside the prospect of longer-term opportunities,” he said.

“The real test will be how quickly government investment translates into economic activity and, ultimately, work for our members. We also need to see whether the measures announced are sufficient to offset the inflationary pressures that continue to affect businesses across our sector.”

Fuel duty freeze extended

Perhaps the most immediately relevant announcement for scaffolding contractors was the extension of the existing 5p-per-litre fuel duty reduction until 1 July 2027.

Healey cancelled the planned reversal of the cut in January 2027 and deferred the scheduled inflation-linked increase until July. The Government is also extending the Heavy Goods Vehicle road tax holiday.

With diesel prices exceeding £2 per litre, the decision will be welcomed by contractors operating HGVs, vans and other commercial vehicles, as well as suppliers transporting scaffolding materials across the country.

The Treasury estimates its fuel duty decisions over this Parliament will save the average HGV driver nearly £4,000 compared with previous government plans.

However, Dickin warned against overstating the benefit.

“These are savings against a proposed higher-tax future rather than actual reductions in today's fuel bills,” he said.

“For contractors and suppliers already facing substantially increased transport costs, the extension is welcome, but it does nothing to reverse the price rises we have already seen. The cost of moving people, equipment and materials remains a major concern for our industry.”

Energy costs and manufacturing

The Budget also promised measures to reduce industrial electricity costs, including the British Industrial Competitiveness Scheme, which will provide eligible energy-intensive manufacturers with electricity discounts of 20–25% from April 2027, including retrospective support for 2026–27.

This could benefit qualifying UK manufacturers supplying the scaffolding and access industry, although eligibility will depend on the scheme's detailed criteria.

Dickin said the Government's commitment to longer-term electricity market reform was encouraging, but that more needed to be done to help manufacturers and suppliers.

“For businesses involved in manufacturing and processing steel and aluminium products, energy is a significant cost and one that directly affects competitiveness and pricing,” he said.

“We welcome any measures that help reduce those pressures, but we need to ensure that suppliers across our industry can benefit, rather than support being restricted to a relatively small number of businesses.”

Employment costs and taxation

The Chancellor confirmed there would be no increase in headline rates of income tax, National Insurance or VAT, while maintaining the commitments in the Government's existing corporation tax roadmap.

However, employment costs will continue to rise for some businesses.

From April 2027, the National Living Wage will increase by 3.9% to £13.21 per hour, while minimum wage rates for younger workers and eligible apprentices will also rise by 3.9%.

Dickin warned that the impact could extend beyond those directly affected by the increases.

“While many skilled scaffolders earn considerably more than the statutory minimum, increases at the lower end of the pay scale can have a knock-on effect across a business,” he said.

“They affect entry-level roles, apprenticeships and supporting occupations, and can create upward pressure on wider pay structures. At a time when contractors are already managing tight margins, these additional costs cannot simply be ignored.”

He also noted that the Budget's business rates relief was primarily directed towards retail, hospitality and leisure businesses, leaving most scaffolding contractors and industrial suppliers outside its scope.

Construction and infrastructure investment

The longer-term outlook for scaffolding demand could be strengthened by the Government's commitment to infrastructure and housing investment.

An updated National Infrastructure Pipeline, due before the end of 2026, will identify more than £750bn of planned investment over 10 years, with an estimated workforce requirement exceeding 650,000 people.

Projects involving transport, energy, industrial facilities and public buildings could generate substantial opportunities for scaffolding and specialist access contractors.

The Budget also announced further measures to accelerate infrastructure delivery and simplify housebuilding, including exemptions from certain biodiversity requirements for smaller residential brownfield developments.

Dickin welcomed the ambition but stressed that the industry needed to see projects moving forward.

“Investment in construction and infrastructure is clearly good news for our sector, and the scale of the Government's ambitions is encouraging,” he said.

“But announcing investment is one thing and getting projects started is another. What matters to our members is when that investment translates into tenders, contracts and work on site. We need to see real progress on planning, procurement and project delivery.”

Apprenticeships and skills

The Budget included two announcements with potential implications for recruitment and training.

First, the Government will require apprentices to account for at least 3% of the workforce on large government construction and infrastructure projects.

Second, £100m will be invested across 2027–28 and 2028–29 to expand mayoral apprenticeship brokerage services across England, supporting employers, particularly SMEs, in creating opportunities for young people.

Dickin welcomed the emphasis on apprenticeships but said specialist construction trades must not be overlooked.

“Attracting and training the next generation of scaffolders is one of the biggest priorities for our industry, so we welcome measures that encourage employers to invest in apprenticeships,” he said.

“However, it is essential that specialist trades such as scaffolding are properly represented in these programmes and procurement requirements. We need to ensure that the opportunities being created translate into meaningful training and sustainable careers across the whole construction sector.”

Finance and business investment

The British Business Bank will receive an additional £5bn of financial capacity, supporting an expanded Growth Guarantee Scheme and other business finance initiatives.

This could improve access to funding for eligible scaffolding contractors and suppliers seeking to invest in equipment, vehicles, manufacturing capacity or business expansion.

The Government also reiterated its commitment to reducing regulatory administrative burdens on businesses by 25% over the Parliament.

A mixed outlook for the sector

Summing up the Budget's implications for the scaffolding and access industry, Dickin said the announcements offered some welcome stability but fell short of addressing the full range of challenges facing businesses.

“There are positives in this Budget, particularly the continuation of fuel duty relief, the commitment to infrastructure investment and the focus on apprenticeships,” he said.

“But we cannot ignore the reality that our members are still dealing with higher wages, rising energy and transport costs, and continuing pressure on margins.

“What the industry needs now is confidence that the Government can deliver on its investment commitments, create a sustained increase in construction activity and make meaningful progress in reducing the cost of doing business.

“Ultimately, our members need more than breathing space. They need the conditions that will allow them to invest, grow and create jobs.”