Consultant Atkins has warned that the water industry is in danger of critically reducing its future capacity after being forced to axe around 100 jobs in the sector.
“The UK has one of the best water regulatory frameworks in the world, however it operates on a five year stop-start cycle. When the dip in the five-year AMP cycle coincides with the deepest recession since water privatisation, the unintended consequences are that the sector will lose its ability to continue to innovate, invest in critical infrastructure and maintain skills,” said Atkins managing director of water Graham Roberts.
Atkins confirmed that 148 employees in its water business faced redundancy in September. It said this week than it now expects to redeploy 20-30%.
“In September we reported that we were experiencing a very slow year in our water business and that had led us to reduce staffing levels,” he said.
“As the UK’s largest engineering design consultancy Atkins routinely talks with government and regulators across many sectors about difficult issues like this.”
Water supplier representative British Water director Paul Mullord said Atkins was far from alone in shedding water jobs, with two unnamed companies in a similar position.
Urge to review
Association for Consultancy and Engineering chief executive Nelson Ogunshakin called on the government to intervene. “We would urge the government to review the current approach to water infrastructure investment,” he said.
“A new funding regime should allow the water utilities to make the necessary strategic investments in their networks, and allow suppliers to plan their businesses more effectively.
“A new funding regime should allow the water utilities to make the necessary strategic investments.”
Nelson Ogunshakin, Association for Consultancy and Engineering
“This will result in better-quality infrastructure at a lower lifetime cost to consumers and will ensure that the UK’s world-class water engineering expertise is maintained and enhanced,” he added.
Final AMP5 determinations are due next month. Suppliers to the water industry are anticipating a 15% rise in workload in the next five-year spending period, starting in April 2010.
The draft determination on water prices from Ofwat in August would, if adopted, commit the 10 water-only plcs in England and Wales to spending £19.6bn in AMP5, substantially up from the £15.7bn they are spending in the current AMP4.
However, suppliers are unlikely to see the benefits until 2011 at the earliest as water companies delay capital spending.
Editor’s note 1: This story has been updated after inaccuracies in the original were identified by Atkins. Of the 148 staff threatened with redundancy, Atkins expects to redeploy 20-30%, not 105 as originally reported. Also the discussions referred to in the story between Atkins, Ofwat and the Treasury were not emergency talks but part of the routine of business negotiation. NCE apologies to Atkins and its staff for any confusion or bad feeling that this has caused.
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