Maintenance budgets: building next year's numbers

The email from finance lands on a Tuesday. Next year's maintenance budget, by Friday please. Attached is last year's spend with a column for this year's forecast.

The quick way is obvious. Take the forecast, add a few per cent, send it back. Everyone does it.

Then August comes. The gearbox on the main drive has gone, two fitters have been off long-term, and the agency bill for nights is twice what anyone planned. You spend the autumn explaining an overspend you could have seen coming.

Last year's spend is a record of what happened. It includes the breakdowns you were lucky to avoid, and leaves out the ones you weren't. It tells you very little about what next year needs.

Build it from the plant up

A budget you can defend starts with the plant and the people, not last year's total. Split it into five blocks. Each has a different logic, and finance will ask about each one differently.

1. Statutory inspections and exams
2. Planned maintenance: labour and parts
3. Breakdowns
4. Cover: holidays, sickness, peaks and shutdowns
5. Projects and replacements

The lines you can't cut

Start with the statutory work, because it's fixed. Get your registers out and count.

Lifting equipment that lifts people, and every lifting accessory, needs a thorough exam at least every 6 months*. Other lifting kit needs one at least every 12 months*, unless an examination scheme sets different intervals (LOLER, regulation 9). Local exhaust ventilation needs a thorough exam and test at least once every 14 months* (COSHH, regulation 9). Pressure systems are examined under their written scheme. Add the fixed wiring, the PUWER inspections and anything else your insurer or your own risk assessments need.

Price every one, then add the repairs the reports will throw up. The exam is rarely the expensive part. The defects are. Our posts on LOLER thorough examinations and the 14-month LEV rule cover what to expect.

One point to have ready for finance. HSE compares a pressure system exam to an MOT for your car, and adds that "It is not a substitute for regular and routine maintenance" (INDG261). Passing the exam doesn't mean you can cut the PPM.

Planned work from the schedule

Next, cost your PPM from the schedule itself. For each task: hours, how often, and parts. Add it up by machine. If you don't trust your schedule, our post on reviewing an out-of-date PPM schedule comes first.

This is also where you show finance what the schedule doesn't cover. Which tasks have slipped this year for lack of hands? Put the cost of catching up in its own line.

Breakdowns from your own data

Breakdowns are the line everyone guesses. Don't. Use your breakdown log.

Take the last two or three years. For each critical machine, count the stops, the hours and what each one cost in parts and labour. Then add the cost of the downtime itself. Our post on what an hour of downtime really costs you shows how to work that out.

Now look for the machines that are getting worse. A box that failed once two years ago and three times this year is not going to fail less next year. Those are your candidates for the projects line, and our post on repair or replace covers how to make the case.

Cover is the line that's always missing

Here's our view. The line most budgets leave out is cover, and it's often the one that blows up.

Count it the way you'd count anything else. How many weeks of holiday does your team take? How much sickness did you carry this year? When are your peaks, and when is the shutdown? Who covers nights when someone's off?

Then price it. Overtime has a limit before it breaks people. Agency and contract engineers cost more per hour, but you only pay for the hours you use. Long bookings need care too. After 12 continuous calendar weeks* in the same role with the same hirer, an agency worker is entitled to the same basic working and employment conditions as if you had recruited them directly (Agency Workers Regulations, regulations 5 and 7). So a long booking can cost more than you planned. Our post on the 12-week rule covers what changes.

Pay rates move every year. The National Living Wage went to £12.71 an hour for workers aged 21 and over from April 2026*, and the rates change on 1 April every year* (GOV.UK). Your engineers earn well above that. But the floor moving tends to push pay scales up across the site, so allow for it.

What does it cost to have nobody? Picture the night the line stops and the only fitter on shift is a mechanical fitter facing a drive fault. Every hour spent waiting for the right person is an hour of downtime. Put your own downtime figure against the cost of a night of planned cover and compare. Put a cover line in the budget, and you've got the money ready when you need shift cover or a breakdown callout.

Capital or repair: ask finance early

Some of what you spend will be treated as capital, and some as repairs. That changes how the money is approved and how it's taxed.

Plant and machinery can usually be claimed under the annual investment allowance, which lets a business deduct the full value from profits before tax. The AIA amount is £1 million* (GOV.UK, annual investment allowance). Repairs are treated differently. GOV.UK notes that alterations to install plant or machinery count, but "this does not include repairs", which are claimed as business expenses instead (GOV.UK, what you can claim on).

You don't need to be the tax expert. But a replacement gearbox and a rebuild can land in different places. Agree with your finance team which is which before the budget goes in.

What to do on Monday

1. List every statutory exam and inspection for next year, with a price for each.
2. Pull two to three years of breakdown data for your critical machines and price the stops.
3. Count holiday, sickness, peak and shutdown weeks, and put a cover line in the budget.
4. Book half an hour with finance to agree what counts as capital and what counts as repair.

* LOLER and LEV exam intervals, the 12-week agency qualifying period, the National Living Wage rate and the annual investment allowance correct as of 31 October 2026. Check LOLER on legislation.gov.uk, GOV.UK minimum wage rates and GOV.UK capital allowances for the latest.