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Atkins sheds water jobs as industry's cyclical spending cycle bites

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.

Editor’s note 2: Due to the overwhelming reader response to this story we are stopping inviting online comments on Monday. Please can youmake any further responses via Letters to Editor, addressed to New Civil Engineer, Greater London House, Hampstead Road, London, NW1 7EJ.

Readers' comments (27)

  • As one of those people being made redundant by Atkins I find the figures quoted with regards to redeployment extremely dubious. From the 148 put at risk in August/September 105 have not been successfully redeployed, this 105 figure seems more likely that is the total number of successful redeployments within the whole company this year (and not the Water staff being made redundant). The real figures should read along of the lines that 114 people have lost their roles within Water Operations with close to a dozen being successfully redeployed within the company (up until now).

    It is also peculiar how the article does not touch on the issue of Atkins planning to offshore a lot of their Water Operations work overseas to the Bangalore. The Bangalore office has seen no cuts in the Water Operations department in these tough times. Instead it has further plans to grow four fold over the next two years from fifty staff to over two hundred staff, as presented by Mick Foote (MD for Atkins Water Operations) in his tour around the UK. The off shoring of publicly funded work is another topic which should be considered in detail as the downturn in the AMP cycle was not the sole reason for the redundancies within the Atkins Water Operations division.

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  • As explained above, NCE's original story was wrong & has now been corrected. We apologise for the misunderstanding and any confusion caused.

  • We are in the same boat as Atkins, I work for a northern water company where the company are in the process of reducing numbers to attempt to align our cost base to the likely AMP 5 determination which is due from Ofwat in November.

    We are reducing the numbers in management roles by 50%!!!! The reduction in numbers will continue in the business, this is also impacting our service providers adversely. The AMP cycle causes major damage and disruption to the supply chain and increased costs by the nature of its stop start nature.

    Not a good way to run a sweet store.

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  • The fundamental problem civil engineers face is that the central body supposed to look after your interests is an Employers Club. What you want is what the Architects, Lawyers, Accountants have which is an Employees Club.

    The ACE and the ICE don't care about your jobs and salaries. That is something the Lawyers etc governing bodies will not allow.

    Lawyers and accountants clubs also restrict membership, keeping down supply and keeping salaries up - again unlike the Engineers' "Employers" club, who always try to ensure there is a surplus of graduates to keep salaries down.

    Kind Regards

    Dave Andrews- Claverton Energy Group

    PS this topic is being discussed in detail by the Claverton Energy Group - who are concerned there will be no engineers left to build the energy infrastructure we need. We have the Head of the Engineering Employers Federation (An employer's Club) talking at our conference at Wessex Water this weekend - should be interesting.

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  • I too sat through the MD of Water Ops telling us how they are doing their best to send as much work as possible to the Bangalore office, while making myself and half our team redundant. Apparently that's what Atkins' clients want.

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  • It appears that someone, somewhere completely failed to get their facts straight before publishing the original article. More or less a work of fiction as far as it originally appeared.

    This is a very sensitive time, and I, and many of my colleagues, are appalled by the nature in which this matter has been handled.

    I hope very sincerely that all Atkins (and other industry staff) who have been adversely affected by recent events manage to find new positions swiftly.

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  • We have updated this article to reflect the fact that Atkins has confirmed that of the 148 unfortunately made redundant, just 20-30% will be redeployed, not 105 as originally reported. Apologies for any confusion caused.

  • And to then be told that in all likelihood in 12 months time we will have to try and re-recruit most of the staff we are letting go seems to be an incredibly short-sighted approach.

    Given that the majority of staff being made redundant will be so disillusioned with the engineering profession that they will not want to come back, the industry is either facing yet another skills shortage - or will have to pay over the odds to convince the same staff to sign up for another 5 years, before going through the same process in 2014!

    Having said that, companies do not have much alternative if they are to stay afloat, which is why Ofwat/government must shoulder the blame. Well, some of it anyway.

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  • There is another factor to consider in this debacle and that is the constant selling & reselling of the utilities over the past decade or so with each new owner seeming to believe that they have bought the goose that lays the golden egg, or at least the golden customer base. Then, discovering they have actually got the financial equivalent of a three legged race horse, they strip as much value out of the company before selling the withered remains to the next mug punter come parasite.

    No consultant can afford to work under the conditions where their client suddenly decides that they are not going to release any work as they are basically potless.

    Saying that the particular case highlighted above has been handled with lack of expertise, knowledge & sensitivity from the outset.

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  • I was also shocked by senior management claiming that "clients are insisting that we use our Bangalore office to deliver work at a lower cost".

    Are there any representatives from water companies who are able to confirm that they have requested that future UK water work is carried out abroad?

    Or conversely are there any who can categorically deny that this is the case?

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  • I agree offshoring could be another topic which should be considered in detail as the downturn in the AMP cycle was not the sole reason for the redundancies within the Atkins Water Operations.

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  • There's a lot of good staff within the water team and some will be lost through the redundancy process. Any consultants out there looking for good staff may find atkins is a good place to start.

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