As we move into the 4th year of the 5-year cycle of AMP6, and with AMP7 on the horizon in 2020, the UK will continue to see a shift in focus to increasing efficiency and decreasing total expenditure for companies. In recent AMP periods, the focus lied in increasing value for customers (i.e. regulating pricing models through OFWAT). While dedication to customer satisfaction and savings remains steadfast, the benefit of suppliers is to be given more weight as time moves on. These benefits, will work to serve all involved from shareholders down to household and non-household customers.
Great strides have been made since the initial AMP period in the late 80s to improve the UK’s overall water systems. Lead and wooden pipes of the Industrial Revolution period, have long since been replaced with safe, more efficient, infrastructure. The expansion and improvement of these systems have been funded by private investment from water authorities. Up until recently, capital expenditure was the main focus, which provided an immediate solution at an attractive price. These quick fix solutions, however, came at a big cost.
By focus on monetization and low cost, low quality solutions, companies failed to take longevity into regard. As a result, they face rising operational expenditures from the constant maintenance of ineffective systems. AMP6 pushes companies to embrace an approach that takes total expenditure into account; this push weighs both the capital expenditures and operational expenditures and puts focus on questions of efficacy and reduced waste. How do we get there? In a word, innovation.
The sustainability of the water sector relies largely on whether we continue to embrace and weigh the evolution of the industry. Population increase, climate change, changing technology, environmental legislation, changing demands etc. should continue to shape the industry as stagnancy will only stand to increase costs to both companies and consumers. More and more companies are turning to innovative solutions to not only increase the efficiency of existing systems, leak detection, and maintenance, but also to reduce overall waste and, subsequently, the costs associated with properly handling said waste.
With innovation comes an inevitable hole in the job market which UK engineers are all too eager to fill. Water companies throughout the UK are looking to increase engineering staff to meet the rising standards and develop innovative solutions to the detritus left from ineffective water systems. This is good news and not so good news for recruiters in the engineering sector. At first glance, the widening job market and potential for future projects in an ultra-competitive market is a recruiter’s dream. On the other hand, the UK is met with a significant skills shortage that makes these positions difficult to fill. It’s up to recruiters to navigate this delicate balance and supply the workforce with the skilled workers it needs.
There are no easy, quick fix solutions on the road to sustainability, but the water sector has undergone a sort of solidarity to move forward with new initiatives. Thus far, AMP6 has driven companies to take a look at every level of their current systems and supply chains in order to assess what works and what doesn’t. As we move forward, applying innovative technologies and techniques to refine these systems will be key.