Tuesday 14 July 2020

Driver shortage fears worsen as immigration from EU plummets

Image courtesy Driver Hire Group Services

The much-feared Brexit cliff-edge has receded once again, with contingency planning put on ice as the UK set out on the road to a Christmas general election, in a bid to finally break the ongoing deadlock.

Following the news of the EU’s extension of the Brexit deadline to the end of January, Road Haulage Association (RHA) chief executive Richard Burnett said businesses would be relieved that a no-deal scenario had been averted, but warned that the fresh extension was “only prolonging the agony of uncertainty”, and preventing hauliers from planning ahead.

“We need a deal and a transition period to keep the supply chain moving,” he said.

“Government must make best use of this extra time to get firms who import or export goods border-ready.”

But those fleet operators involved in cross-border work are far from the only ones that continue to be impacted by the continuing wrangle over the UK’s exit from the EU – not least because of significantly declining immigration from the other member states.

That was the message from the Freight Transport Association (FTA) last month, as it warned that logistics companies were struggling to fill job vacancies, in part due to the plunging number of EU workers entering the country, which is now more than 50 per cent lower than its peak in 2015-16.

FTA has asked the government to “recognise how reliant the industry is on EU workers” and to “amend its future immigration policy to welcome these vital individuals post-Brexit”, following the publication of its Logistics Skills Report 2019 – which highlights the contribution of declining EU net migration to a concerning 43 per cent rise in transport and storage sector job vacancies over the last two years.

Sally Gilson, head of skills campaigns at FTA, said: “The logistics sector is facing serious challenges in the recruitment and retention of labour: 59,000 HGV drivers alone are urgently needed to keep just to keep operations afloat.

“Businesses within the logistics sector are reliant on access to EU workers to help fill job vacancies; these workers currently constitute 13 per cent of the entire logistics workforce… without adequate levels of staff, operations will come crashing to a halt and businesses will cease trading.”

The FTA report cites national statistics indicating that EU net migration is at its lowest level since 2012, with the most recent decrease accounted for by a drop in those coming to the UK for a firm job placement over the last year. This is widely accepted to be the consequence of sustained Brexit uncertainty, combined with the weakness of the pound.

The FTA is also concerned that government proposals to roll out an Australian-style points-based immigration system after Brexit may compound the problem. It would likely see those traditionally perceived as “higher skilled” workers favoured, with an emphasis on education and wage levels.

Sally Gilson added: “FTA is urging government to build its future immigration policy on what the UK economy needs to remain functional – not arbitrary academic levels and minimum salary requirements.”

FTA highlights migration policy recommendations likely to be implemented after the UK leaves the EU, whereby EU migrants would have to meet the skill level and minimum salary that non-EU citizens currently do when arriving on Tier 2 work visas.

“The minimum salary threshold is currently £30,000 for non-EU workers,” emphasised the FTA report.

“The logistics sector and logistics-related occupations share a higher proportion of jobs paying below £30,000 per annum. This proportion within logistics occupations is 86.7 per cent, and for the logistics sector an estimated four in five jobs pay less than £30,000.

“With a smaller proportion of 68.6 per cent of all jobs in the UK paying below this threshold, it is clear logistics would be disadvantaged by such a policy and would therefore have to find ways to improve recruitment of UK nationals in order to grow and retain staff.”

The report also highlighted how problems recruiting younger people continued to be a factor; 60 per cent of HGV drivers are now over 44 years old, while just 19 per cent are under 35.

“Not enough young people are considering logistics, especially HGV driving, as a career option,” it found.

“There are several reasons for this, including the cost of licence acquisition, lack of understanding of the sector, poor sector image, working hours and lack of quality driver facilities. As a result of these factors and the reliance on labour from the EU within various roles, the sector is facing serious labour shortages over the next five to 10 years.”

Meanwhile, the RHA has also been putting pressure on government over depleting driver numbers. Last month Richard Burnett led a delegation from the all-party parliamentary group (APPG) for road freight and logistics to 10 Downing Street, to deliver the findings of an inquiry by MPs into the skills shortage.

The report, which drew on submissions from operators and other stakeholders from across the industry, found that the sector is unable to meet current demand levels, respond to growth or replace staff who are leaving at an untenable rate.

A letter delivered to accompany the findings has urged the prime minister to intervene specifically to help reverse the growing HGV driver shortage.

The APPG report was also sharply critical of perceived shortcomings in the apprenticeship levy, which it found was not working for the sector – having reaped just £20 million from the scheme as compared to the almost £300m it has contributed in payments of the levy.

The report calls for increased funding so that the cost of training apprentices is adequately covered, and the approval of new standards, adding that the absence of a C+E driving standard shows that the scheme is out of touch with industry.

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