It was recently announced in a House of Commons transport committee report that a supply chain levy could come into force within the next two years, should the driving industry fail to recruit enough lorry drivers to recover the UK’s national driver shortage.
The proposed levy would involve charging companies in areas of the supply chain where margins are greatest – such as large online retailers and oil giants – and would help to assist with the building of new facilities and the training of drivers.
Since the covid-19 pandemic, the UK’s national driver shortage has worsened.
With an upsurge in demand for goods across UK supermarkets, petrol stations and other marketplaces, the need for drivers continues to increase. Unfortunately, a combination of an ageing workforce, poor working conditions, Brexit and IR35 have made it much more challenging to attract and retain individuals within these roles and the industry is buckling under the pressure.
Read more on the fundamental causes of the driver shortage here.
Impact of the levy on the driving industry
Industry body, The Road Haulage Association (RHA) have commended the report and have praised it for highlighting the importance of acknowledging the experiences of small and medium-sized enterprises (SME) in this scenario.
With the majority of hauliers falling into the SME category, it is important that these businesses are given a voice to fairly reflect upon the industry challenges they are facing first hand, whilst offering essential contributions towards solutions. Through collaboration across the industry, RHA MD, Richard Smith believes that drivers experiences on the nation’s roads can dramatically improve (RHA).
In addition, British politician, Huw Merriman has discussed the positive effects of the levy in helping to improve rail freight facilities. He has proposed that the government focus upon utilising the country’s already efficient rail infrastructure in order to reduce the demand for long distance hauls on the road.
By moving towards a “multi-modal model” in which long distances are served by rail and shorter distances by road, the structure will not only “help the country meet its decarbonisation goals” (Rail Freight) by 2050, but will also make the industry “more attractive to drivers who want to operate over shorter distances” and spend less nights away from home (Personnel Today).
Contrastingly, the RHA have raised concerns over the impact of the levy on SMEs and worry that this would cause a financial strain or limit the growth of SME hauliers.
With there being such a short space of time for the industry to turn things around, the RHA are concerned over the added pressure that the levy will present. As the industry have already faced the struggle of attracting and retaining drivers over the past few years, there is a concern that the they cannot make the necessary rapid changes, when majority of the issues such as IR35 are out of their control (RHA).
Over previous years, the government have implemented several measures to tackle the UK’s HGV driver shortage, including the expansion of HGV driver testing capacity, the restructuring of tests and £7000 funding for the Large Goods Vehicle Driver apprenticeship scheme, to name a few.
Although the government have made several attempts to support the driving industry in attracting and retaining talent, the moves have been criticised for suggesting that the driver shortages are for the government to fix.
Nonetheless, the report has been criticised for ignoring the role of the government in issues across the sector. David Wells, Chief Executive of Logistics UK highlighted that the report places the blame for the shortages on the driving industry alone and fails to take into consideration that the industry has been “hit by factors outside of its control”, including the loss of European workers due to Brexit and the impact of the covid-19 pandemic on drivers qualifying for work.
Describing the situation as a “national disgrace”, Wells places focus on the thousands of HGV drivers who are unable to access safe and secure locations when stopping overnight. If the government were to take ownership and invest in increasing the number of motorway service areas, drivers would be provided with better overnight rest areas and would be more satisfied with their welfare; ultimately boosting retention rates in the sector.
In the Road Freight supply chain report, the House of Commons highlighted the need for the government to recognise driver facilities as key infrastructure assets by enforcing a number of actions:
- The Government should use the findings of its current lorry parking survey to set regional targets for building additional parking capacity. It should set up a joint Government-industry taskforce to ensure these targets are met.
- The government should also set minimum standards for driver facilities, including security for drivers and vehicles; clean toilet and shower facilities; food options, including healthy choices; and sufficient provision for female drivers.
- The government in consultation with the sector, should also develop a binding code of conduct setting minimum standards for employers’ and other businesses’ treatment of HGV drivers.
By setting targets for improving driver facilities and enforcing minimum standards for working conditions, the government can demonstrate their dedication towards supporting the industry and will encourage more HGV drivers to remain in their roles instead of exiting the industry.
- The government should ensure that the road haulage sector funds its own driver training, with the committee adding that it makes “no sense that HGV drivers should have to pay their own training fees when we face continued shortages”.
If driving businesses fund training for their drivers, we should see an increased attraction toward the industry and uptake in individuals looking to enter the field.
- Making HGV driver skills bootcamps permanent, with parts of the scheme targeted at underrepresented groups. This could be funded by the apprenticeship levy.
HGV driver skills bootcamps would provide a faster and more flexible route to becoming a HGV driver and would help boost the amount of young people entering the industry for a long-term career.
The next two years form a crucial part of how the driving industry is set to evolve in the future and will determine if a levy is to be enforced to recover our UK supply chains.
To boost attraction and retention of these roles, driving recruitment businesses must continue to educate potential candidates on the common industry myths, and the government must enforce action to help improve the welfare standards of those working in a sector which is imperative to our supply chain.
Certainly, the UK driver shortage will not be fixed with quick, short-term remedies. We are hopeful however that with prioritisation, a long-term strategy, consistent government backing and a possible levy, that much needed stability will be injected back into the UK’s supply chain.