The shortage of commercial vehicle drivers in the UK is heading towards crisis point, says a new report from Driver Require.
The company’s latest White Paper outlines the current and prospective state of the LGV driver market. It warns of an impending ‘perfect storm’ that will likely bring the shortage of LGV drivers to crisis level unless rates of pay and working conditions are rapidly improved.
The report says the shortage of LGV drivers has been growing steadily over the past ten years. Demand is currently estimated at 370,000 drivers with only 320,000 currently working in the sector, leaving a shortage of 50,000.
To date, the UK has been able to avoid this shortage becoming critical due to a combination of recession and Eastern European immigration, which alleviated increasing demand, but Driver Require fears the situation could rapidly worsen due to impending regulatory changes.
“For the first time since 2005,” Driver Require’s CEO, Kieran Smith, said, “we have increased LGV driver requirements with no continental EU nationals to make up the deficit. Meanwhile, the UK has become less attractive for foreign LGV drivers due to the culmination of Brexit, the associated drop in the exchange rate and the government’s crackdown on limited company operators via the IR35 legislation.”
The report explains how the implementation of IR35 in the Private Sector in April, exacerbated by Brexit, could trigger an exodus of foreign drivers to Germany and Benelux countries for better pay and conditions, while British drivers may leave to pursue other careers. The result could be a rapid worsening of the LGV driver shortage which, in the short term, would inflate LGV driver pay to unprecedented levels.
The only way to avoid a short-term crisis, says the report, will be for haulage operators to accept increased agency rates so that agencies can pass the uplift on to agency drivers, to prevent them returning to continental Europe or quitting driving in favour of other jobs.
Kieran Smith added: “The problem with this is that the government is unlikely to help increase salaries and benefits to LGV drivers, while HMRC is closing the Ltd Company loophole and forcing payment of taxes. Meanwhile, haulage companies are under extreme margin pressure from their customers and agencies are also having their margins squeezed by their haulage customers.
“If IR35 is implemented in April, few hauliers will want to accept an increase in agency charges, so we can foresee agency LGV driver net pay falling and an exodus of thousands of foreign drivers.”
But Driver Require warns that the overall shortage of LGV drivers can only be addressed by sustained improvements to remuneration and working conditions which are sufficient to attract qualified LGV drivers back onto the road.