Up to 29,000 water industry jobs have been axed in the past five years, according to new research by water trade association British Water.
Companies in the water industry supply chain have cut staff numbers by an average of 32.3% over the five-year AMP4 period and into the first year of AMP5, British Water has found. It has calculated that this means up to 29,000 jobs have been lost, from a water industry supply chain believed to employ around 89,000 people in 2004.
With a potential 29,000 jobs “in flux”, said British Water UK director Paul Mullord, there is a risk that companies are wasting money on making redundancies only to recruit for the same roles two years later.
A further risk is that companies could struggle to recruit skilled employees when work picks up again, if those made redundant choose to emigrate or move to different sectors.
ICE water panel chair David Nickols said: “Due to the slowdown of capital investment that occurs during each price review − compounded in 2009 by credit shortages − many experienced people have left the sector. This loss of talent is not being addressed and represents a risk to the future of the water industry.”
“Due to the slowdown of capital investment that occurs during each price review − compounded in 2009 by credit shortages −many experienced people have left the sector”
ICE water panel chair David Nickols
British Water is surveying its members − which include water industry consultants, contractors and suppliers − for details of their highest and lowest numbers of staff employed on work for UK water companies between the beginning of AMP4 in April 2005 and the present. So far 16 out of 158 member firms have responded to the survey.
The highest staff numbers were shown in 2008, with the lowest numbers in 2010. The average time period between the highest and lowest numbers was 2.25 years.
Mullord said the interim numbers are clear evidence of the “extreme peaks and troughs” of the regulatory cycle due to the dearth of work during the transitional time between AMP periods.
The figures reflect the fact that the AMP period changeover has coincided with economic downturn, said Nickols. “Coming at the same time as similar reviews in Scotland and Northern Ireland, and occurring during the recession, [Ofwat’s price review] has created a perfect storm for the industry,” he said.
Mullord said industry regulator Ofwat should look again at alternative regulatory systems such as staggered price reviews. Water UK communications director Barrie Clarke agreed that the current five-year cycles cause industry turbulence. “The whole sector is interested in a much smoother way of investing across the five year period,” he said.
British Water is continuing to collect data from members. It will publish the final figures from its survey later this summer.