Recruiter issues strategic warning on “catastrophic back-loading of work” in AMP8

(by Karma Loveday)

Water sector recruitment specialist Murray McIntosh has rebranded year one of AMP8 as “Year 0” – to underline the slow start, stalled programmes and talent drain that it is hearing about from contacts on the ground.

The company said that despite the £104bn investment headline, capital authorisation and scheme sanctioning remain slow. Indeed, the signs are that familiar patterns are unfurling: “Years one and two bring under-mobilisation and workforce drift; years three and four bring acceleration, supply chain pressure and cost inflation; year five brings deadline-driven delivery, quality trade-offs and regulatory fallout.”

There was further detail, including that:

• Statutory and regulatory obligation dates within AMP8 programmes are being deferred – through planning delays, slow mobilisation and regulatory overhang. Work anticipated by the supply chain in 2025 has slipped to 2026 and beyond, and project end dates are being extended from 2030 to 2032 or 2033. “No formal announcements. It is simply happening, across multiple programmes… Year 0 has effectively pushed the goalposts – and the sector has quietly accepted it.”

• The true picture is masked by a blurred boundary between AMP7 and AMP8. Covid caused slippage and disruption to AMP7. But now: “Year 1 [of AMP8] spend looks healthy, but genuine AMP8 schemes are lagging and staffing plans in some organisations still appear to be based on legacy logic rather than actual AMP8 needs.”

Murray McIntosh pointed to underlying causes of the situation. These included: 

• Water companies that are unprepared to deliver the scale of investment now allowed after years of being cash-starved.

• Delays caused by mass Competition and Markets Authority redeterminations. It argued: “The dead zone has left a legacy of deferred decisions, delayed sanctions and cautious capital allocation that the sector is still working through.”

• The absence of centralised workforce planning in AMP8, which it contrasted with Ofwat’s approach to the Tideway project – when it asked at the outset how many people would be needed to deliver.

There are, Murray McIntosh said, different levels of performance by different water companies. Its view was that “Companies that maintained their AMP7 delivery models have hired more effectively.” It picked out Anglian Water for praise, referencing the continuation and expansion of its long standing @OneAlliance model. In contrast: “South West Water took a different approach, opting for a full restructure and a new delivery alliance – a significant undertaking that required extensive renegotiation before AMP8 hiring could begin in earnest. Restructuring at the start of a new cycle is not without logic, but it does create a lag, and in a competitive candidate market where timing matters, starting late turns a difficult hiring environment into an even more challenging one.”

Consequences:

With mobilisation slow, Murray McIntosh said it was seeing major tier 1 companies redeploying engineers into higher-paying sectors such as nuclear, oil and gas, and energy. It also cautioned against ‘contract-hiring’, which it is also witnessing. “Contract-first means workforce planning is being deferred, not solved. Teams are being assembled quickly but without the stability that long-term delivery requires. Institutional knowledge walks out when contracts end, and the cost of repeatedly rehiring is rarely factored into programme budgets. For the supply chain, contractors on short engagements have less incentive to stay when a better opportunity presents itself — and in a market where engineers are already being pulled toward nuclear and other sectors, contract-only hiring does little to anchor talent to water.”

In short: “What we are seeing is a market prioritising the here and now over the longer term. As programmes accelerate into years three and four, the absence of a stable permanent workforce will become one of the sector’s most pressing problems.”

The talent specialist issued what it called “a strategic warning” – that the sector needs to acknowledge the reality, not propagate an “official narrative” that is some way from reality. “Because if nobody says it openly, programmes will be planned on false confidence, and the workforce implications will catch people out.”

Murray McIntosh urged: “To rectify the current trajectory, the sector must move beyond the Year 0 mentality by accelerating capital authorisations and scheme sanctioning to prevent a catastrophic back-loading of work. Rather than allowing companies to plan headcount in isolation, a coordinated, centralised approach to workforce planning is needed – one that treats the existing talent pool as a strategic, deployable resource.

"Ultimately, the industry must improve its competitiveness as a career destination and shift away from short-term contract hiring toward long-term workforce stability.”