Kieran Smith

The shortage of LGV drivers in the UK is heading towards crisis point as a “perfect storm” of circumstances will see the current 50,000 gap in the workforce widen unless rates of pay and working conditions are rapidly improved, according to recruitment specialist Driver Require.

Its latest report 'Investigating the UK’s LGV driver shortage' says the shortage of LGV drivers has been growing steadily over the past 10 years, with demand currently 370,000 drivers but only 320,000 currently working.

The UK has so far been able to get around this shortage due to a combination of recession and Eastern European immigration, but Driver Require fears "the situation could rapidly worsen due to impending regulatory changes".

Driver Require CEO Kieran Smith said: “For the first time since 2005, we have increased LGV driver requirements with no continental EU nationals to make up the deficit. Meanwhile, the UK has become a less attractive place to work for foreign LGV drivers due to a 'perfect storm' of conditions: the culmination of Brexit, the associated drop in the exchange rate and the government’s crackdown on limited company operators via the IR35 legislation, which comes into effect in April 2020.”

The implementation of IR35 in the private sector in April could trigger an exodus of foreign drivers to Germany and the 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 to crisis point which, in the short term, would inflate LGV driver pay to unprecedented levels".

According to Driver Require the only way to avoid a short-term crisis will be for operators to accept increased agency driver rates to discourage them returning to continental Europe or quitting in favour of better-paid jobs.

Smith said: “HMRC is working hard to close the limited company loophole and force payment of taxes. Meanwhile, haulage companies are under extreme margin pressure from their customers and agencies are also under pressure following 10 long years of having their margins squeezed by their haulage customers.

“If IR35 is implemented in April, we can assume that 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 to continental Europe.”

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In the short term, if the driver shortage worsens, pay rates could be inflated until enough drivers return to the market to restore supply. But Driver Require warns that "even if higher agency rates are agreed in the short term, the systemic issue of an 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".

Smith said: “Driver Require calls on the HMRC to rigorously enforce the IR35 legislation to discourage rogue operators undermining ethical players and to quickly create a level playing field. By accepting the inevitable increase in agency pay and charge rates, we hope to avoid a potential short-term driver supply shortage triggered by an exodus of LGV drivers from the UK haulage sector.

“In the longer term, we appeal to the authorities to drive improvements to LGV driver working conditions both in the haulage companies and on the UK road network. Meanwhile, we expect that market forces will maintain higher pay rates for LGV drivers, which in turn should result in greater retention and an easing of the supply shortage.”