March 2025 is fast approaching; as is the impending AMP8 delivery cycle for the UK’s water utility companies - meaning they will need to face something they’ve never had to before. The next five years are critical, with nationwide investment rising from £56B In AMP7 to a whopping £88b in AMP8. Some sources suggest this may be as high as £96b.

This level of growth is unheard of in the past in the sector, and maybe this reflects a lack of suitable investment since the privatisation of the industry, with the pressure now on from regulators Ofwat and the Environment agency to finally get this right. The Environment Agency reported in 2023, there were a total of 464,056 sewage discharges into English rivers, waterways, and seas, averaging 1,271 sewage spills per day. This is a 53% increase from 2022.The current projections for 2024 will see a further increase. With enough media attention in the last two years and crackdowns from the regulators, we are now expecting the next five years in the industry to see an increase in work across infrastructure, non-infrastructure, repair and maintenance as well as all support behind this from contractors and consultancies nationwide.

There will be challenges in sourcing materials within the budget, organising very tight schedules to complete work and the implementation of many additional packages of work to design and deliver. Perhaps most challenging of all will be finding the people to deliver projects. We are already in a candidate short market in construction and engineering across the country. The industry is up against a range of huge obstacles when it comes to staffing this £17.6b per annum industry.

As the Smart Water Magazine reports “The UK water industry could soon face a significant loss of its workforce, with 70% of sector workers contemplating a move to other industries”, identifying just one issue of competition in growth from competing industries. The article also goes on to suggest that an aging workforce is an issue in the short term, with workers under 24 making up  a mere 8% of the workforce in the UK water sector. Moreover, over 20% of the current skilled workforce is set to retire within the next decade. An aging industry in a period of growth is a very big concern.

There are a range of solutions available with enough planning and attention that can overcome these issues, and they all stem from getting the right people in at the start.

More engagement with IR35 and contract workers in general

Contractors are choosing to move to other industries or even abroad due to complexities role-to-role with IR35 engagement. IR35 is the HMRC legislation that controls who can or can’t provide services as a limited company contractor. Changes were first introduced to the legislation in the public sector in 2017, and then the private sector in 2021.These changes have caused confusion and frustration amongst employers and contract workers nationwide. Three years on from the latest update, and although the dust is starting to settle, it has had an indisputable impact on the appetite for employers to engage with a contract workforce. Similarly, contract workers are frustrated with “inside IR35” tax management which has caused some day rates to rise as much as 80% between 2020 and 2025. Clarity and consistency here, supported by HMRC, are absolutely crucial in not only helping retain skilled workers in the industry for its biggest challenge in decades, but also could have a direct impact on reducing competition and expenditure to recruit in such a candidate short market.

Providing sponsorship for workers to come to the UK

Since the impact of Brexit, it’s no secret that the UK, although as a strong economy, is not as attractive or accessible to foreign workers as it once was. Businesses must work with much more paperwork and tariff obstacles. Sponsorship fees for businesses to hire skilled workers from abroad on a work visa average £500 every 6 months per worker. These costs quickly escalate over time and volume so it isn’t always a viable option. In the water/wastewater sector, it is predicted the engineering disciplines are 30% understaffed at present and this number is only going to increase. Relief on these rates would help companies access skilled workers in a way that wouldn’t be prohibitive due to costs alone.

Training and upskilling

It seems like an obvious solution, however, with an aging workforce and not many young people coming through, it is more important than ever that there is a concerted effort to attract and train those entering the workforce. A more consistent and structured training regime across all disciplines in the sector would give graduates and school/college leavers a career pathway to follow and recognised qualifications or milestones to work towards. Creating the experts for the future who can carry the torch from the current aging workforce.

Offering remote and hybrid working where possible

There are two major advantages to businesses who are open to hybrid and flexible working. The first being, that this is a benefit that to a lot of staff really value, especially in the engineering and Project Management skillsets. Workers want the autonomy to do work from where is best for them whether that be home, office or site depending on the assignment. Companies, post Covid, making five days a week in the office a necessity aren't going to stand out to those that offer skilled candidates more flexibility in their working set up. The second, is the ability to outsource work to other areas of the country. You instantly grow the size of your potential candidate pool tenfold or more. If you're an emerging and growing firm in a relatively remote part of the country, like the Southwest for example, having the option to source expertise nationwide is a game changer; making sure there a much higher chance of better workers filling the needs of the business. Since the pandemic, these methods have become a lot more standardised, however I believe there is still a lot of concern over hiring this way.