Chancellor John Healey delivered his first Autumn Budget on Wednesday 28 October 2026, promising “breathing space” for households and businesses squeezed by higher energy prices and the knock-on effects of conflict in the Middle East. There were no big tax shocks for businesses, but several measures will land directly on procurement and supply chain teams.
For buyers, category managers and supply chain leaders, the Budget touches four areas that matter day to day: energy and fuel costs, import tariffs, skills funding and the economic outlook that shapes supplier pricing. Here is what was announced, and what it means in practice.
The Budget at a glance
These are the measures most relevant to procurement and supply chain teams.
| Area | What was announced | Why it matters for procurement |
|---|---|---|
| Public procurement | New National Procurement Policy Statement due March 2027; at least 3% of the workforce on large government construction and infrastructure projects must be apprentices | Social value, skills and fair pay become harder contract requirements |
| Tariffs | Tariffs suspended on 101 more food products and kerosene until December 2028, and on fertiliser until December 2027 | Lower landed costs on some inputs; supplier price reviews |
| Business energy | British Industrial Competitiveness Scheme confirmed: 10,000 energy-intensive manufacturers get a 20–25% electricity discount from April 2027 (applications close 30 November 2026) | Possible cost relief in manufacturing supply chains |
| Fuel | 5p fuel duty cut and HGV road tax holiday extended to 1 July 2027; tax-free mileage rate above 10,000 business miles up from 25p to 35p from April 2027 | Short-term stability in transport and logistics costs |
| Skills | £100m to expand mayoral apprenticeship brokerage; funding confirmed for the £2,000 apprentice hiring payment and £3,000 Youth Jobs Grant | More support for employers building procurement talent pipelines |
| Economy | OBR growth forecast 1.2% for 2026, cut to 1% for 2027 | Tighter budgets and continued pressure on suppliers |
Sources: Budget 2026 (HM Treasury), FE News, Carbon Brief, TheBusinessDesk.com
Energy and fuel: relief, but no reset
Energy remains the biggest cost risk in most supply chains, and the Budget offers targeted help rather than a broad cut. The Budget notes that wholesale oil prices rose around 60% and UK gas prices nearly 200% between February and October 2026, driven by conflict in the Middle East.
For industry, the Budget confirms the British Industrial Competitiveness Scheme, expanded in April to cover more than 10,000 energy-intensive manufacturers. From April 2027, eligible firms get a 20–25% electricity discount, with a one-off payment backdating support to April 2026. Applications for the first year close on 30 November 2026. The Chancellor also froze the electricity rates of the Climate Change Levy from April 2028 and promised no new policy costs on bills until a new cost-control framework arrives at the 2027 Spending Review.
On transport, the 5p fuel duty cut and the HGV road tax holiday now run to 1 July 2027. The tax-free mileage rate for business miles above 10,000 a year rises from 25p to 35p from April 2027, and the 55p rate for the first 10,000 miles becomes permanent.
What this means for buyers: if you source from energy-intensive manufacturers (metals, chemicals, glass, paper, ceramics), ask suppliers whether they have applied to the scheme before the 30 November deadline and how savings will show up in pricing. Treat the fuel duty extension as temporary, and build the July 2027 end date into logistics contracts and cost models.
Tariffs: check your commodity codes
The government is suspending import tariffs on 101 more food products and on kerosene from 26 November 2026 until 31 December 2028, and on fertiliser until 31 December 2027. This builds on a June 2026 package covering 135 food products, including pasta and tuna. The new list includes garlic, gherkins, marmalade, confectionery and plant-based drinks. The Treasury estimates the combined cuts save households up to £21 a year.
The household saving is small, but the effect for importers can be meaningful. Some of these duties were as high as 20% plus a specific charge per 100kg. Separate suspensions on more than 250 other goods have also been extended to December 2028
What this means for buyers:
- Match the published list against your commodity codes and recent import entries.
- Ask suppliers and distributors to pass on duty savings, and write this into price reviews.
- Model the cost if duties return when suspensions end: December 2027 for fertiliser, December 2028 for everything else.
- For UK-made alternatives, watch for competitive pressure from cheaper imports: some business groups warn the cuts could hurt domestic producers.
Skills and apprenticeships: more support for young talent
The Budget confirms funding for the youth employment package announced in March and adds new money for local apprenticeship services. Bigger reforms wait for the government’s response to the Milburn Review on young people and work.
The measures employers should know about:
There was no new flexibility in the Growth and Skills Levy and no cut to employer National Insurance. Levy-paying employers should keep a close eye on spending, as new levy funds entering accounts since 1 August 2026 expire after 12 months rather than 24.
What this means for employers: procurement remains a hard-to-fill skills area, and the incentives for hiring young people are now generous. A Level 3 procurement or supply chain apprenticeship is a low-cost way to grow your own talent, while existing staff can progress through Level 4 and Level 6 programmes funded by your levy.
Public procurement: social value moves centre stage
For public sector buyers and their suppliers, the most significant announcement is a new National Procurement Policy Statement, due to be laid in Parliament in March 2027. It will prioritise high-quality jobs, fair pay and skills opportunities, including pathways for young people.
Alongside it, at least 3% of the workforce on all large government construction and infrastructure projects must be apprentices. In energy, the government says it will only procure new clean-power projects that lower bills and can connect easily to the grid.
Public budgets will stay tight. The OBR expects debt interest to be £14bn a year higher on average than it forecast in March, cutting headroom against the main fiscal rule to £15bn in 2029/30. Central government is also cutting departmental administration budgets by 20% by 2029/30, saving an extra £595m that year, with AI tools supporting the change. More spending power is moving to mayors too, with 20% of business rates going to them from April 2027.
What this means for buyers and suppliers:
- Public buyers should prepare to build skills, apprenticeship and fair-pay requirements into tenders and contract KPIs under the Procurement Act 2023.
- Suppliers bidding for public contracts should be ready to evidence apprenticeship numbers and workforce plans, especially in construction and infrastructure.
- With growing mayoral budgets, expect more procurement activity at combined-authority level.
Five actions for procurement teams
The economic outlook is mixed. Growth is forecast at 1.2% this year but only 1% in 2027, while energy-driven inflation keeps pressure on supplier prices. That makes strong commercial skills more valuable, not less.
Check the tariff suspension list against your commodity codes and push for savings to be passed on.
Ask who has applied for the industrial energy discount (applications close 30 November 2026) and how it will affect pricing from April 2027.
The fuel duty cut and the VAT cut on household electricity both end in July 2027, and tariff suspensions end in December 2027 (fertiliser) and December 2028 (food and kerosene). Build these dates into risk registers and cost models.
If you buy or sell in the public sector, start planning how you will specify, measure and evidence skills and social value before March 2027.
Use the new incentives and your levy to build procurement capability through apprenticeships, and plan levy spend so funds do not expire.
How SRSCC can help
As a CIPS Centre of Excellence and Ofsted-rated Good training provider, SRSCC helps individuals and employers build the procurement and supply chain skills this Budget calls for.
- Procurement apprenticeships: from the Level 3 Procurement and Supply Chain Assistant to the Level 6 Senior Procurement and Supply Chain Professional. Employers can talk to us about funding and the new incentives for hiring young people.
- CIPS qualifications: study CIPS Levels 3 to 6 through live virtual classrooms, independent learning or classroom delivery in Preston.
- One-day courses: focused training on practical procurement, commercial and supply chain topics.
Want to talk about how the Budget affects your training plans? Contact our team, call 01772 282555 or email info@srscc.co.uk.
