A new report published by design, engineering and project management consultancy, Atkins, is predicting that UK infrastructure projects, including water, could face higher costs, delays or poor decision making and project delivery as the result of a serious skills shortage.

The study – The Skills Deficit: Consequences and opportunities for UK infrastructure has looked at the possible adverse effects of a lack of scientists, engineers and technicians in coming years in the water, energy, transport and digital infrastructure sectors.

However, it also identified an opportunity to save £6 billion through the better planning and coordination of project delivery which will be needed to overcome the skills shortage.

The report compiles the views of more than 40 experts from infrastructure owners, engineering consultancies and contractors, academia and industry bodies, with a particular focus on how they believed the UK’s predicted lack of skills could impact on the delivery the government’s National Infrastructure Plan. The main consequences they identified are:

•    Increased cost of delivering infrastructure, primarily due to wage inflation 

•    Delays to project delivery on key infrastructure projects across all sectors

•    Poor decision making or project delivery due to not having the right people in the right jobs

•    Loss of intellectual property and skills from the UK due to increased use of overseas engineers

•    Stifling of innovation due to lack of resources

•    UK plc becoming a less attractive place to live, work and invest due to the country’s capability to deliver new or upgraded infrastructure.

The report also estimates that the government and industry will need to invest £2.5 billion in training and development to provide enough skills to meet the country’s infrastructure requirements over the next decade.

Nick Roberts, Atkins’ chief executive officer, UK & Europe, commented:

“There is a multibillion pound pipeline of infrastructure projects to be delivered over the coming years to meet the needs of a growing population and the evolving way we live and work in the 21st Century. However, all these schemes rely on having the people with the right skills available to deliver them. There is a need for industry, academia, government and institutions to work together more closely now to avoid the consequences for the UK’s infrastructure highlighted in the report becoming a reality.”

Skills shortage could have wide-ranging implications for the water sector

On the effect of the skills deficit on the water sector and its projects, the report is warning that a shortage of engineers could have wide-ranging implications for the delivery of projects in the National Infrastructure Plan as well as those being delivered by UK water companies as part of the normal regulatory cycle.

The experts have identified a number of key challenges of delivering new water, flood and waste infrastructure and maintenance of existing systems. These include:

• increased costs
• delays to projects
• the stifling of innovation
• loss of intellectual property
• and poor decision making

A skills shortage is expected by a number of people to lead to reduced efficiency, which in turn will cause increased costs to the delivery of new water projects. Richard Price, director of construction, Southern Water, commented:

“I think the efficiency of UK delivery of infrastructure could be compromised by resource scarcity as programmes will struggle to get the right people leading to potential elongation of projects."

"We will end up paying more for the right resources and there will probably be a dilution of expertise. All of these mega projects and programmes will want the best resources. Whilst Southern Water will not compromise on quality and experience in our capability, there is clearly a danger organisations may accept less experienced resources because of the necessity to deliver the projects which could compromise the success of the project.”

There is a further concern that a lack of engineers and technical staff with the right levels of knowledge and experience could mean the wrong projects are being delivered. Jon Prichard, CEO, The Engineering Council, said:

“You have the risk where the government is spending money on these projects. They could be the wrong ones, leading to the wrong solutions if they don’t have the in-house capability to tell them what the right solution should be. That is the risk of the skills shortage.”

Large scale water projects could lead to wage inflation

The report is also warning that wages could become a primary tool used to incentivise people onto large scale projects such as Thames Tideway Tunnel and upgrades to water supply and sewage networks across the UK.

In addition, a particular concern for the water sector and something which evidence suggests is already happening is talent being poached by other sectors, with experienced engineers with transferable skills in considerable demand.

The report is warning that with a strong pipeline of work, the opportunity to work on iconic projects such as HS2, Crossrail and Hinkley Point C, can lead to resources leaving for higher wages and other projects -  the water sector is already losing people to rail and energy.

Mike Woolgar, Atkins’ water director, commented:

“The shortage is occurring where investment is being focused. We’ve more people leaving the sector to go into energy because they can see that more money is being put into the sector. When we start to build more railways, this will add pressure too.”

The water sector is also perceived to be at a skills disadvantage as a result of the five-year fAMP investment cycles which create peaks and troughs in investment and consequently in the demand for skilled engineers to deliver infrastructure projects.

Boom and bust construction wrecks the industry

The report says that without a more consistent flow of work, talented staff will seek work in other sectors or countries where there is more demand for their skills and better employment certainty.

David Fisk, vice president of development and innovation, Imperial College London, said:

“Other comparable economies have learnt that you don’t do boom and bust construction, because it wrecks the industry and you end up short of skills. If you don’t give people a reasonably constant flow of work, then they go elsewhere, which is exactly what has happened in the water industry because its investment is so cyclical. So I wouldn’t be at all surprised if the National Infrastructure Plan created a skills shortage because it is pulling all the strings in one go.”

Skllis gap could cause delays to flood defence projects

The experts say that in addition competition between sectors for the best science and engineering talent, the same applies to regions which likewise need to ensure that their infrastructure projects can be delivered. The report states:

“With engineers in short supply, this could result in a regional imbalance between now until 2020, during which time the government’s five year programme to invest £2.3 billion in flood defences and more than 1,400 flooding and coastal erosion projects needs to be delivered.”

 In certain regions this could put significant strain on the engineering resource and ultimately lead to delays to project start times and overall delivery. David Rooke, executive director of flood and coastal risk management, Environment Agency, commented:

“The feedback we are getting from our supply chain is that there is a shortage of construction skills in the marketplace given the current amount of investment that is going into it that is going right down through the trades.”

 Innovation a key issue for water sector

Contributors to the report also identified innovation as a vitally important factor in solving the future challenges faced by the water sector. David Rooke, Environment Agency, added:

“New technology and innovation will help with some skill shortages, but it is still going to require skilled staff in various competing sectors to deliver the overall infrastructure that the government is planning over the next six years.”

The water sector experts suggested the industry would require a different set of skills if it is to manage demand and think of creative solutions to environmental challenges.

According to Professor David Gann CBE, vice president of development and innovation, Imperial College London, the need to reduce the current  25% level of wastage of the UK’s water supply will require a different engineering skill from the ones that have traditionally been going into the industry.

The report also warns that looking overseas to recruit skilled individuals to deliver their projects could ultimately have negative impacts on the long-term investment in skills, expertise and competitive advantage of the UK -  individuals who join projects for a few years often take back their expertise to their own country. However, overseas recruitment is already happening at some water companies.

Richard Price, director of construction, Southern Water, commented:

“We’re light on the right resources. We’ve been out to Madrid recently and recruited a whole batch of resources. The reason we went out there is because the Spanish economy is still recovering and there are lots of engineers who are good English speakers, highly qualified, good people who are twiddling their thumbs in Spain that we are going to bring over here.”

The report proposes a number of overall potential solutions and recommendations to address the skills shortage, including: 

• Making better use of innovation and technology to enable engineers to be more productive
• Better planning, prioritisation and coordination of resources across all infrastructure types so projects don’t compete for scarce resources
• Invest more in developing transferable skills so people can operate across different projects and industries
• Early supplier involvement in major projects to ensure the right questions are asked at the outset and the proposed solutions are deliverable
• Address immigration issues to ensure important, highly skilled roles don’t remain empty
• Industry to commit to providing more career entry routes for young people
• Greater focus on diversity to create a larger pool of potential scientists and engineers

Click here to download the full report