The Chancellor gave her Spring Statement today and referenced two major announcements from the past two weeks on £600M for Construction Skills and the Welfare Reforms from last week. The Chancellor was true to her word that today’s announcement would be more of an economic update than delivering a raft of tax reforms or spending commitments. So a lot of the announcements were already released over the past two weeks for FE, Skills and Employability.

Construction Skills and House Building At the Highest Rate for 40 years

The Construction Skills workforce development is key to Government planning as a major part of the Spring Statement was around the reforms to the UK’s planning system and the amount of houses being built and their increase in GDP to the economy. To ensure the construction industry has the capacity to deliver this government’s plan to get Britain building, the government has committed to funding a £625 million package for skills in construction, expected to provide up to 60,000 more skilled workers this Parliament.

As part of this, to boost provision, the government is providing an additional £100 million to support 35,000 construction-focused skills bootcamp places, providing a route for new entrants, re-engaging “returners”, and upskilling existing employees. A further £40 million for up to 10,000 additional places on new construction Foundation Apprenticeships will give young people a high-quality entry route into a rewarding career. An additional £165 million will boost funding for providers to deliver more construction courses including through the High Value Course Premium and Free Courses for Jobs. The government is also launching a new Teacher Industry Exchange scheme to attract industry experts to teach in Further Education. This government will further build capacity with £100 million to establish 10 new Technical Excellence Colleges specialised in construction in every region in England.

The government is committed to working closely with industry to remove barriers and unlock investment in training. In support of this package, the Construction Industry Training Board (CITB) is doubling their New Entrants Support Team (NEST) programme to support employers, particularly small businesses, to recruit and retain apprentices. CITB has also committed £32 million to top up the government’s £100 million investment to support over 40,000 industry placements in construction each year. The government is also launching an £80 million capital fund to support employers to deliver bespoke training tailored to their needs.

The government’s reforms to the UK’s planning system will result in housebuilding being at its highest level in over 40 years, the OBR has concluded in its forecast for today’s Spring Statement. This will create an extra 170,000 homes by 2029/30 – boosting homes built by 30% that year after a 13 year house building low in 2025-26.

• OBR forecast concludes housebuilding will be at its highest level in over 40 years a result of UK government’s planning reforms by 2029/30 – bringing UK closer to Plan for Growth 1.5 million homes target
• Economic watchdog also forecast 0.2% to be added to GDP by 2029/30 because of planning reforms – worth around £6.8bn in today’s prices
• For a zero-cost policy this is the biggest positive growth effect the OBR have ever taken on – while also protecting £3.4 billion for UK public services

The Government will invest in additional employment, health and skills support from 2026-27 to help people start or stay in work, and not fall into longterm economic inactivity, scaling up to £1 billion a year by 2029-30. This will provide employment and health support to anyone receiving out of work benefits with a work-limiting health condition. This investment will build on existing support from WorkWell, Connect to Work and the Get Britain Working trailblazers.

Defence Industry Super Power

The Government also will be investing heavily in Defence spending and development and the desire to be a Defence Industry Super Power with innovations in new technology. The Chancellor announced a fully funded commitment to increase NATO-qualifying defence spending to 2.5% of Gross Domestic Product (GDP) by 2027, including by providing an additional £2.2 billion of funding for the Ministry of  Defence (MOD) next year.

Sector Reaction

UCU General Secretary Jo Grady, said: 

“In choosing to become an austerity chancellor, Rachel Reeves is throwing workers under the bus and setting up Britain for another decade of national decline. If Reeves and Starmer fail to reverse course they will be signing their own political death warrants, paving the way for a Tory-Reform coalition. 

“Taxing the rich to invest in education and across the public realm is in the best interests of Labour and the working people the party is meant to represent.

“Labour’s failure to properly invest in Britain’s universities and colleges is fundamentally at odds with its objectives of economic growth and national renewal. Our world-leading higher education sector is facing a catastrophic crisis, threatening more than ten thousand jobs. Our further education institutions remain scandalously underfunded, with teachers struggling to make ends meet. We need Keir Starmer to stop managing this decline and start investing.”

Luke Shipley, CEO and Co-Founder of Zinc:

“The Chancellor’s Spring Statement signals a pivotal shift for UK businesses. With £2 billion in Whitehall cuts and a reduction in civil service roles, we’re likely to see increased competition for private sector jobs as public sector workers re-enter the market.

“At the same time, with economic growth forecasts being revised downward, many businesses will take a more cautious approach to hiring, focusing on essential roles and high-impact talent. This means companies must be strategic — investing in skills and tools that drive efficiency and reduce workloads for hiring teams, while navigating a more competitive recruitment landscape.

“For employers, the key takeaway is clear: securing top talent will require a proactive approach. Businesses that adapt quickly, embrace digital expertise, and refine their recruitment strategies will be best placed to thrive in this challenging market. For instance, by leveraging automation in their HR teams companies can speed up onboarding, improve accuracy, and free up valuable resources to focus on growth.”

Oliver Shaw, CEO, Orgvue, said:

“UK businesses are already wrestlingone of the sharpest slowdowns in growth we’ve seen in decades. Recruitment freezes, redundancies and stretched resources threaten to push someindustries to breaking point. The government promised stability and growth but has instead shifted the burden onto already fragile industries without sufficient support.

“The immediate reality is that UK organisations are putting their workforces under an efficiency microscope. But it’s the business leaders who prioritise strategic needs, proactively redesign roles, and effectively manage talent that will win. Business as usual simply isn’t an option.”

UUK Chief Executive, Vivienne Stern MBE said:

“The Chancellor’s statement today is a stark reminder, if any were needed, of the economic challenge facing the nation.

“Growth has to be the name of the game and universities are a critical player. They act as super-connectors in their regions bringing together major employers, politicians and big public services to make sure they have the skills, research and innovations to succeed.

“Universities help to create the technology and businesses that drive jobs and wealth creation and equip people with the skills they need to earn more right across their working lives.

“This country needs its universities to be firing on all cylinders. University leaders are working hard to cut costs to stabilise their finances, but government also has a role in ensuring that they are properly funded now and over the long-term.”

Sarah Porretta, CEO of Young Enterprise, said:

“We are deeply disappointed that the Spring Statement has not included the much-needed increase in school funding, particularly for SEND provision. While the Government has acknowledged the importance of education, failing to prioritise SEND funding means many schools and students will continue to face significant barriers to accessing the support and resources they need.

“At Young Enterprise, we believe practical, applied learning opportunities is essential for all students, particularly those with special educational needs. Yet, without adequate funding, it becomes increasingly difficult for educators to deliver these vital real-world learning experiences, including financial education, that empower SEND students to build confidence and develop the skills they need for the future. 

“We urge the Government to reconsider. School funding is not just about meeting immediate needs, it’s about laying the foundations for long-term success. Teachers must have the time, training, and resources to equip SEND students with essential life skills, and that requires meaningful investment. There is still an opportunity for the Government to close the gap and create an education system where every young person has the chance to thrive.”

Julian Mulhare, Managing Director, EMEA at Searce, comments: 

“The government’s commitment to tackling legacy tech and ramping up tech investment is a positive step – especially for public sector organisations still bogged down by outdated systems. This offers valuable lessons for businesses facing similar challenges. But tech alone won’t solve the problem. Too many organisations still plan in five-year cycles that can’t keep up with innovation, or dive in without clear goals. Strategic investment is only half the battle; execution matters more. Real transformation starts with process first, technology second- focusing on scalable, interoperable solutions that support how people actually work.” 

Dr Marc Warner, CEO of Faculty, comments: 

“With anaemic growth since 2008, the Chancellor must realise tinkering around the margins will not arrest the UK’s economic slump. The path to reviving our economy will be paved by technology – and AI is now widely recognised as the most important of our time. 

“It is one of the few levers the government can pull to get cheaper and faster public services – so bold policy must now follow the encouraging soundbites if the UK is truly to have AI ‘mainlined into its veins’.” 

Wouter Durville, CEO and co-founder at TestGorilla, comments:

“It’s clear there will be heaps more pressure on UK businesses from April. With rises in Employer National Insurance and the National Living Wage, the cost of hiring and keeping staff is soaring. High turnover simply isn’t an option – but with pay rewards stagnating, retention is going to be tougher than ever.  

“This is where developing talent will be key. With ‘fire and rehire’ off the table, businesses must double down on training, upskilling, and internal mobility to keep teams engaged and growing. Smart hiring and strong retention strategies aren’t just a “nice to have” or box-ticking exercise; they’re the difference between strategic growth and survival in the current climate.”  

Ed Bradley, CEO at Virtualstock, comments:

“Retail is the UK’s largest private employer, but the recent National Insurance hike has placed immense pressure on the sector, putting this title at risk. Retailers are now paying millions more in tax, forcing businesses to cut jobs and stretch resources. They’re being pushed to do much more with much less. 

“While it’s reassuring that tax hikes may be off the table, I urge the government to prioritise measures that encourage business growth and investment in the UK. Higher Capital Gains Tax and reduced R&D tax credits are making the UK less attractive for investment, particularly in tech. We need policies that support businesses rather than deter them. Otherwise, we risk losing businesses and talent to more favourable markets abroad.  

“My message to Rachel Reeves is clear: retail needs relief, and the UK must foster innovation.” 

Ben Harrison, Director of the Work Foundation at Lancaster University, said:

“The Chancellor used her Spring Statement to double down on the Government’s intention to cut spending on welfare and support more people into work by announcing further cuts.

“Despite repeatedly stating that the Government is on the side of ‘working people’, making cuts of this nature risks making it significantly harder for many people to access employment. The OBR has been unable to fully certify the impact the proposed welfare cuts will have on reducing spending and getting people back to work, but the verdicts of those groups representing disabled people are clear about the substantial impact on living standards they are likely to have on some of the most vulnerable people in society.

“The £1 billion in extra funding for tailored employment support starting next year is welcome. However, cuts that heighten anxiety for disabled people – or end up pushing them into unsuitable work – are unlikely to lead to an increase in sustained employment and support economic growth. As Government consults on changes to disability benefits, it must listen to the voices of disabled people, and ensure measures don’t plunge more of those with long-term health conditions into poverty.

“To boost growth, the Chancellor has announced further funding for housebuilding and defence and promised this investment will lead to the creation of new, high quality employment opportunities.

“But communities across the country have heard these kinds of promises from successive Governments. To deliver for local people, Government must ensure any new jobs are underpinned by fair pay, secure terms and conditions and offer flexibility to maximise the number of people who are able to access them.”

Zoë Billingham, Director of IPPR North said:

“The world is changing – international instability has forcedthe government to make stark choices at the UK’s Spring Statement. Who pays the price ofincreasing costsis critical.

“One thing hasn’t changed: regional inequality. Public spending remains skewed—London gets £2,747 more per person than the North. And history tells us that when spending cuts come,they are not felt evenly across the country:the North too often takes the hardest hit. These are inequalities that have led to poorer health outcomes for people in northern regions. It is no accident that the region with the highest percentage of people in need of our social security safety net – whether this is because they are disabled or on low incomes – is the north east of England. 

“The smartest move for the Chancellor? Explore fair tax options—like additionaltax on gambling company profits or oncapital gains —to ease fiscal pressure without deepening inequality. This is a smarter fiscal fix for the long term”.

Lee Parkinson, chief executive at Efficiency North, said:

“We find ourselves at yet another crossroads in construction, where, even with the highly-encouraging announcements, we must remain grounded, This long-awaited backing for a new skills mission is a step forward but we can’t overlook the fact that the industry does require an additional 50,000 workers each year just to meet existing demand.

“There certainly seems to be some mobilisation across the sector, but the key now is ensuring there’s a comprehensive and collaborative effort to fully embrace and capitalise on this investment.

“With apprenticeships being one of the biggest drivers of social value generation within construction, there’s a real opportunity for clients to serve the workforce of tomorrow and drive the creation of real, project-initiated, and future-proofed apprenticeships.”

“Equally, this presents an opportunity to ensure apprenticeships are not only compliant with the evolving regulatory landscape but tailored to meet these new norms. This calls for an effectual approach to procurement and on-going contract management to ensure that the delivery and completion of apprenticeships become a direct and measurable outcome of their capital investment.

“In doing so, employers can not only achieve their own ambitions but also help replenish the nation’s workforce, which has become increasingly depleted over the years. And with what we can see as the growing enthusiasm among younger generations to join our industry, now is the time to pave the way for a thriving, sustainable future in construction, securing long-term career development.”

Tracy Brabin, Mayor of West Yorkshire, said:

“The Government is getting on with its plan for change and the growth mission is rightly its top priority.

“Global uncertainty has made this task more difficult, and we must now double down on our efforts to boost living standards and support public services.

“Mayors are best placed to help achieve this and I welcome the Chancellor’s focus on housing, skills and infrastructure as we build a country that works for all.”

Colin Booth, Chief Executive of Luminate Education Group, said: 

“The Chancellor was right to emphasise growing numbers of young people not in education, employment or training (NEET) as a barrier to economic growth and opportunity. Given projections for increased numbers of 16-18-year-olds in the coming years, urgent action is required to ensure NEET rates do not spiral out of control between now and 2030. Ensuring there is capacity to provide education and training opportunities that lead into employment or further study represents a central mission for further education colleges and should represent a central pillar of the Government’s strategy to reduce NEET rates. Many colleges in areas with already above average NEET rates, such as Leeds, already operate at maximum capacity. While the current funding environment is predictably tight, investment must be found to grow further education colleges’ student capacity if the Government is serious about reducing NEET rates. Alongside this, it’s critical investment is matched with adequate funding that reduces college teacher recruitment and retention difficulties, as without the staff to educate and train growing numbers of young people, the NEET rate will predictably only rise further.”

David Hughes, Chief Executive, Association of Colleges said:

“It is reassuring hearing the Chancellor announce investment in colleges to meet the skills needs in the country’s construction sector. It shows that she appreciates how investment in skills is vital to the government’s ambitions on economic growth and delivery across its missions. It also show that she recognises the central role colleges play in educating and training the workforce of today and tomorrow.

“This investment of £625 million will enhance the facilities in colleges across the country and ensure colleges can recruit and retain the staff they need to teach the skills needed in the labour market – for building 1.5 million new homes, retrofitting many more, and building national and local infrastructure and in clean energy. It will open up thousands of opportunities for young people and adults to get the skills they need and which employers are crying out for. 

“If the Government’s five missions are to be achieved, investing through colleges will be the cornerstone upon which success is built – boosting economic growth, improving public services, and fostering innovation. This announcement today needs to be followed by more in the spending review to ensure that every one of the industrial strategy sectors, plus the NHS and construction, can depend on colleges to support their skills needs.

“With this backing from the Treasury, we are excited at the prospect of a white paper from the Department for Education which can help unleash the potential of colleges to do even more in supporting the skills needed over the next few years. That white paper must secure the vital position colleges have, alongside schools and universities, in the education and skills ecosystem.

“It must help colleges to build more and even deeper partnerships with industry and employers to stimulate demand and support delivery of training and skills. It must reduce bureaucracy for colleges and trust them more, as anchor institutions, to be strategic players as well as delivery organisations in their areas. It must also secure the investment in capital and revenue so that they can scale up the great work they already do, for more employers and more people.  

“By investing in colleges and giving them more agency, we can build a resilient workforce and equip the next generation with the skills and knowledge to help the Government kickstart the economy.”

Ben Willmott, CIPD’s head of public policy comments: 

“While the Chancellor highlighted welcome support for key sectors such as defence and plans to boost investment in infrastructure and housing, there was no recognition of the need to provide more support for employers. 

“The Government has been quick to add costs and regulation to businesses through national insurance hikes and the Employment Rights Bill, which have created clear headwinds for employers in terms of additional costs and implementation challenges. We now need to see the Government back businesses by setting out how it will work with employers to address these challenges and boost productivity, as together these measures stand to undermine business investment in workforce training and employment, as CIPD data has shown. * 

“It’s crucial that the Government continues to consult with employers on key measures in the Employment Rights Bill still to be finalised to ensure they don’t have the effect of increasing the cost and risk of employing staff, which will also undermine efforts to Get Britain Working. If the Government wants to see more people in work, then there must be jobs for them to go to. It’s important that new regulations don’t deter employers from hiring staff, especially younger people and those that might need more support. at work. 

“We also need a clear implementation plan for the Employment Rights Bill to ensure that employers are able to comply with the raft of new regulations, and this must include additional funding for ACAS and for the employment tribunal system to manage the likely increase in claims. 

“On skills, we need to see measures that will benefit individuals and employers in the everyday economy sectors that employ millions of people across the UK. For example, fast-tracking consultation on the new Growth and Skills Levy to help employers invest in training their workforces to tackle skills shortages and support technology adoption. 

“We also need the Government to back recommendations that come from the Keep Britain Working review and work with employers to keep people healthy and in work, for example by improving access to occupational health support for SMEs.”

Beatrice Barleon, Head of Policy and Public Affairs, EngineeringUK, said:

 “The Chancellor’s recognition of the importance of investing in skills through a new training package for up to 60,000 new construction workers is welcome and essential to delivering on the Government’s growth mission, which is underpinned by plans to build 1.5 million homes and to strengthen the UK’s national security.

“EngineeringUK is calling on the Government to go further in the Spending Review and Autumn Budget later this year and look to address the financial barriers to technical and vocational entry routes into engineering and technology for all young people.

 “Government must recognise its role in training the next generation and look to move towards a new model of directly funding apprenticeships for 16- to 18-year-olds to help reverse the decline in uptake of apprenticeships for this age group.

“Government must also look to invest in programmes and activities we know work in getting young people interested in careers in engineering & technology, and support the teachers that will help deliver them. We look to government to reverse recent cuts to Continuous Professional Development for STEM teachers and continue to support outreach programmes reaching into schools.

“The investment in construction training announced today is a positive step in the right direction, but this action needs to be replicated through investment across the full STEM skills pipeline.”

Ben Rowland, AELP CEO on today’s Spring Statement:

“Today’s statement highlights the tough choices facing the Chancellor, but if we want to boost productivity and long-term growth, skills must be at the heart of government plans. Targeted investment and reform in the skills system can unlock real value for individuals, employers and the economy.

“We will need skills providers of all types firing on full cylinders if we are to unlock talent across the country. I am concerned that government is tying one hand behind its back inadvertently by only making new construction sector programmes available for colleges – who make up just 15% of the provider base for apprenticeships.

“The forthcoming Comprehensive Spending Review is an opportunity to boost skills by closing the gap between Apprenticeship Levy receipts and the programme budget; removing growth caps on 16-19 providers and bringing greater transparency to Adult Skills Fund contracts, with a greater focus on outcomes and employability.”

Chris Claydon, Chief Executive at JTL said:

“We welcome the Chancellor’s focus on skills and recognition that skilled trade workers – like electricians and plumbers – are vital to the UK’s infrastructure and housing plans.

“Apprenticeships are key. But success means more completions, not just starts, and meaningful routes into long-term skilled jobs. As we move towards net zero, apprenticeship funding must keep pace with evolving industry demands and training must reflect new technologies and employer needs. Many of JTL’s partner employers are under significant pressure, but it’s vital that businesses stay the course and develop apprentice talent.

“At JTL, we believe skills drive growth. We’re ready to work with government and industry to turn this week’s announcements into real opportunity – for young people, employers and our sector.”

The Spring Statement announced today has left young people questioning whether a Labour government values young people any more than the Conservative one.

The statement announced a cut to benefits, specifically targeting young people by stopping under-22s with long-term illnesses or disabilities from being able to claim the universal credit health top up. It contained nothing on the financial crises facing universities.

Commenting, Amira Campbell, NUS UK President, said:

“The Labour Party committed in their manifesto to equalizing the minimum wage for young people, yet they’ve just created uneven access to benefits based on age.

“The benefits cut announced today will affect 66,000 18-21 year olds, slashing the amount of money they have to live on, forcing young disabled people into work, and limiting their independence.

“We are past pinning our fiscal problems on people on benefits. We know that cutting benefits is cruel, and does nothing to boost our economy. Instead, we should be investing in education, creating a highly skilled workforce that will benefitthe whole country.

“PiP is a financial lifeline for many young people. I urge politicians to vote against these inhumane benefit cuts.”

James Farr, director of Think, said:

“There is a pressing need to tackle the construction sector skills shortages and so we warmly welcome Chancellor Rachel Reeves’ formally pledge to address this vitally important issue. The commitment to improving availability of teachers with industry knowledge and skills is also a positive step, as this remains a key challenge for the further education sector.

“It is critical that Construction Industry Training Board efforts to provide work placements translate into a tangible increase in college learners progressing into apprenticeships which are the primary entry route into the sector. Ensuring this pipeline functions effectively will be key to addressing long-term skills gaps and supporting economic growth.

“We look forward to further details on the proposed technical education colleges. It will be essential to ensure that their sectoral and occupational focus aligns with local skills priorities, to meet workforce demands.