The water sector is facing a pivotal moment. On October 9, 2025, the Competition and Markets Authority (CMA) issued its provisional redetermination of the 2024 Price Review (PR24), granting five water companies an additional £556 million in revenue over five years. This represents only 21% of the £2.7 billion requested, resulting in an average 3% increase in customer bills, on top of a previously approved 24% increase.

This outcome underscores a critical shift in the sector's financial landscape: capital is constrained, and water companies must deliver more with less. This decision is more than a financial adjustment; it is a call to rethink how the sector operates. Traditionally, investment has focused on infrastructure. Now, the spotlight shifts to another equally critical resource: the workforce.

Strategic Workforce Deployment: A Competitive Advantage

Our Water Industry Labour Report 2024 demonstrates that strategic workforce planning is not an optional consideration—it is a business imperative. The report, which draws on insights from over 4,000 professionals across the sector, highlights the challenges and opportunities for water companies:

• Talent Retention: Nearly a quarter of the workforce is considering leaving the sector, a trend that risks exacerbating existing skills shortages.
• Training and Development Gaps: 42% of professionals report insufficient access to relevant training, limiting innovation and adaptability.
• Operational Efficiency: Scalable labour models and clear IR35 determinations enable companies to deploy the right people, in the right place, at the right time.

By addressing these areas, organisations can achieve measurable improvements in both operational and environmental outcomes, without relying solely on increased capital expenditure.

Navigating a Capital-Constrained Future

The CMA’s redetermination caps the majority of proposed funding increases, meaning water companies must do more with less. For CFOs, COOs, and HR leaders, this requires a shift in perspective: workforce strategy must sit alongside infrastructure investment at the heart of business planning.

Effective workforce planning allows companies to:

• Optimise labour utilisation and reduce dependency on temporary or expensive external resources.
• Build resilience to respond to regulatory changes and environmental pressures.
• Enhance employee engagement and retention, mitigating the risk of a skills exodus.

Labour as a Driver of Transformation

In a sector under increasing financial and environmental pressures, people are the differentiator. Infrastructure alone cannot deliver the efficiency, sustainability, and innovation required. Organisations that embrace workforce strategy as a driver of transformation will be better positioned to meet both regulatory expectations and customer demands.

The CMA’s PR24 verdict is more than a financial recalibration—it is a wake-up call. By strategically deploying talent, investing in training, and adopting flexible labour models, water companies can not only navigate the current constraints but emerge stronger, more resilient, and more sustainable.

To explore how workforce strategy can deliver tangible outcomes for your organisation, download our Water Labour Report and join the conversation on the future of people in water.

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