AMP8: driving faster delivery for the future

The UK water sector is facing the national, critical task of reinforcing and expanding ageing assets, and securing future water availability, meanwhile regaining public trust and investor confidence.  

A year on from the start of this Asset Management Period (AMP8), water companies have been working to get their supply chains set up and mobilised to meet the demands of the most ambitious regulatory period to date.   

However, delivering a record £104bn of investment in this AMP cycle, particularly against a backdrop of larger, more complex and interdependent programmes, demands that the sector moves beyond business as usual. The sector needs to continue to accelerate delivery through earlier planning, more integrated partnerships, strategic use of digital and data and new approaches to skills, capacity and risk. 

The water sector must reflect on four crucial lessons in the first year of AMP8 to accelerate investment delivery in the next year and beyond to improve performance and regain public trust in the UK’s water sector.  

These four lessons are: 

1. Assess and finesse commercial models  

We’ve seen a growing focus from clients on programmes’ value, not simply their cost, as they’ve planned and procured for projects. This has included increased appetite for commercial models which share risk and reward more intelligently across client and the supply chain.   

“No one size fits all and models have been selected and set up depending on programme needs.” 

What’s crucial is that clients ensure models remain agile across programmes, allowing and empowering teams to flex their approach to optimise performance, accelerate delivery and make decisions quickly.  

New collaborative and Project 13 inspired commercial models can be a critical enabler of high-performing programmes, but these naturally take time to embed. They also don’t fit every programme – continuing to invest in the resource, thinking and energy to see these models into high performing, agile models is key.  

Finessing the model to drive supply chain performance, incentivisation and pace is therefore critical to avoid inadvertently creating a blocker to delivery.  

2. Build the confidence to invest in capacity now and at pace  

The construction industry’s capacity issues are well known and persistent – and risk water companies’ abilities to deliver the heightened volume and scale of work planned in this regulatory period and beyond. 

“Yet solving this problem will require significant investment from the supply chain, at a time when conflict in the Middle East is placing the economic outlook in the UK on shakier ground.” 

Water companies should remain the key force behind the demand, clarity and certainty of work. The innovative commercial models to elevate the supply chain’s confidence to invest. 

This isn’t just about investing to attract and train more people and bridge the skills gap. There must be a step change in digital capabilities to make the most of AI and technological advancements and to solve construction’s productivity problem.  

The water sector has made solid steps forward in leveraging digital solutions to specific engineering challenges. However, there’s still ground to make in advancing automation, integrating historic models and bringing together different datasets to enhance delivery.  

The returns from this investment will spread far beyond the current AMP – it will transform the sector and what it’s capable of for future cycles.   

3. Boost collective performance through peer-to-peer collaboration 

Collaboration across the supply chain is a long-standing strength in the water sector. Cooperation between water companies themselves, however, remains more limited. A regulatory model which rewards performance on a relative basis, rather than a collective one, has naturally created little appetite to share insights, data and experience.  

“The water sector shouldn’t be treated as a single entity, as each water company tackles different challenges.”  

However, as the demands of AMP8 intensify, so too does the need for water companies to learn from each other and support best practice. This is to navigate the issues they collectively face, whether around rising costs or programme risk.  

The wider supply chain can play a crucial enabling role here in sharing knowledge and experience not only from across water, but also from adjacent sectors, particularly transport and energy.   

Our Water Sector Benchmarking Club, for example, allows clients to share anonymised capital performance data to identify efficiencies and improvements without compromising competitive positions. Members’ rapid access to data is complemented by a collaborative forum through which clients can discuss and work through common issues, with the ultimate aim of improving outcomes across the country. 

4. Take a programmatic approach to the next wave of major project investment 

AMP8 has dialled up the volume of work which water companies are set to deliver in the next few years. More importantly, though, the major projects planned for the period, from strategic reservoir programmes to large-scale water transfer schemes, have dramatically increased the complexity.  

“Seven projects are already scheduled to submit Development Consent Orders (DCOs) in the next year.”  

As the number and scale of these major projects grows, taking a programmatic approach to the pre-application stage, integrating planning, land, engagement and environmental workstreams will become increasingly important.   

Understanding interdependencies and where a project fits not just within a wider programme, but also against other competing pipelines of work, will be vital to avoiding delays and cost overruns.   

Again, partners and suppliers play an important role in sharing lessons learned across the DCO process, which can benefit future major projects over the next decade and beyond. 

Groundwork started in AMP8 will be the difference between delays, bottlenecks and heightened costs in five years’ time or being set up to deliver efficiently, confidently and in line with evolving regulatory expectations.  

Building on momentum 

There’s been strong progress over the past year, however at a fifth of the way through this AMP, the pace needs to be accelerated. This is so the promises made to customers, and timely infrastructure, are delivered for a successful investment cycle. 

This means capitalising on early momentum and adapting to lessons learned to increase delivery. AMP8 still offers the opportunity to make visible and sustained performance improvements.  

Rebuilding public confidence must start with a legacy of high‑performing infrastructure investment that delivers genuine value to communities and the environment and attracts the top talent.