The new UK Budget delivers targeted changes rather than major reform, but several of the announcements have a direct impact on the structured cabling, fibre and data centre labour market. Below is a clear and practical breakdown from the perspective of Bauhaus Recruitment and the companies and engineers we support.

Minimum Wage Rise

The Government has increased the National Minimum Wage. For many people this is a positive step, but there is a bigger picture. In technical and construction trades the impact becomes more complicated, often leading to reduced junior hiring and potentially higher unemployment for young people.

Impact on Data Cabling Firms

Data cabling companies work on tight margins. When minimum wage rises, the cost of hiring young and inexperienced workers rises immediately, but their productivity does not rise at the same pace.

This usually results in:
• Fewer trainee cable pullers
• Fewer 18 to 21 year olds being taken on
• A stronger reliance on experienced hands who can deliver from day one

Because most cabling and data centre projects are time sensitive, companies have less room to take risks with junior staff. The result is often higher youth unemployment in the trade.

Knock On Effect Across Other Trades

Skilled trades such as M&E engineers and electricians are not minimum wage roles. However, many general construction positions are either on the minimum wage or only slightly above it. This includes labourers, site operatives, cleaners, gate staff, basic demolition labour and general mates. These roles form the backbone of early-stage construction work.

When minimum wage rises, these general labour roles become more expensive and companies often reduce headcount to manage costs. Because these teams usually work before the cabling phase, any slowdown on their side delays everything that follows.

If fewer labourers are available to clear areas, move materials, build basic structures or prepare rooms, the entire site progresses more slowly. Cable routes are handed over later, containment areas are finished later and rooms are signed off later. This leaves cabling teams working in compressed timeframes or waiting around for handover, increasing overall project pressure and the risk of delays.

Apprenticeships: A Partial Solution

Some employers will look toward apprenticeships, but the system is not a quick fix.

Large Employers

Companies with a payroll over £3m pay the Apprenticeship Levy at 0.5 percent of their payroll. This creates a pot of money that must be used for apprenticeship training. In theory they can take on as many apprentices as the pot covers, but in practice most only bring in a small intake each year because proper supervision and training still require time and resources.

Smaller Employers

Companies under the £3m payroll threshold do not pay the levy. The Government funds 95 percent of the training cost and the employer pays the remaining 5 percent. However, the employer still pays the apprentice wage, PPE, tools and carries the impact of slower productivity.

What the Levy Pays For

The levy only covers the training and qualification, not wages or on site supervision. This is the main reason companies keep apprentice numbers low.

How Many Apprentices Can a Cabling Firm Take?

There is no official limit, but most firms can only manage one or two apprentices at a time due to the training workload and project pressures. Apprentices help long term, but they do not solve immediate labour shortages.

Scrapping the Two Child Benefit Cap

The Government has removed the two child benefit cap. This increases support for larger families and boosts household income.

Industry Angle

Higher disposable income tends to support technology spending over time, which strengthens demand for home connectivity, broadband upgrades and related installation work. While not a direct driver for structured cabling firms, it contributes positively to the overall market climate.

Infrastructure and Digital Commitments

The Budget confirmed that digital infrastructure remains a national priority. While there were no dramatic new programmes, the Government continues to support areas that matter for our sector, including:

• • Fibre expansion
  • 5G densification
  • Data resilience
  • Public sector data centre consolidation
  • Energy efficiency upgrades for enterprise and hyperscale facilities

Every rise in mobile and cloud usage increases reliance on the core fibre network, which keeps demand high for structured cabling engineers and surveyors.

Funding to Devolved Regions

Northern Ireland received an additional £370m in funding, with further targeted support for Wales and the North.

Impact on Cabling and DC Work

Regional investment often leads to:
• Telecom upgrades
• Modernisation of public buildings
• Local data centre enhancements
• Increased demand for labour

These pockets of activity can create strong regional demand for skilled data cabling and fibre engineers.

Pensions

The Government has introduced a new limit on pension salary sacrifice, capping the tax-free element at £2,000 per year. Anything above this no longer benefits from the same National Insurance savings, which reduces the attractiveness of larger salary sacrifice arrangements used by many directors and high earners.

Employer pension contributions are still deductible for corporation tax purposes, which keeps them efficient for long term planning. However, this new cap affects directors, contractors and business owners who previously used larger sacrifice strategies.

Dividend Tax

Dividend tax rates will rise by 2% percentage points from April 2026, increasing the tax burden on directors who pay themselves through dividends. The tax-free dividend allowance remains at £500, which is already far lower than previous years. With higher rates and a very small allowance, the gap between salary and dividend efficiency continues to narrow.

This change particularly affects engineers operating through their own limited companies, as well as owners of small cabling firms who rely on a blend of salary and dividends for income.

General Economic Conditions

The Budget aims for stability rather than aggressive spending. However, the wider sentiment among SMEs is that the Budget feels tougher on small businesses and less supportive of private investment. Higher taxes, reduced allowances and rising employment costs are increasing pressure on smaller firms, including many within the cabling and wider construction supply chain.

For the structured cabling and data centre ecosystem, stability can still be positive in certain areas. It supports steady digital infrastructure investment and gives larger enterprise clients enough confidence to move ahead with upgrades and new facility builds. At the SME level though, tighter margins and higher operating costs may slow hiring, limit junior intake and reduce appetite for risk, which feeds into the already widening skills gap.

Bauhaus Recruitment Outlook for 2025

Based on current market conditions, the next year is likely to bring:
• Strong demand for structured cabling, fibre and data centre engineers
• Increased competition for surveyors with Ekahau and iBwave skills
• Clients seeking flexible, compliant subcontractor models
• Reduced demand for young, minimum wage level operatives as firms prioritise experienced labour
• Only modest increases in apprenticeship intake due to delivery pressures

The Budget may not transform the sector, but it does reinforce something important. Digital infrastructure remains a national priority, which is positive for the entire industry. For us, this is encouraging. Hopefully it means the industry will stay busy, investment will continue and skilled labour will remain essential. We will keep supporting clients across the UK and Europe with well screened engineers who maintain productivity and compliance on every project.