FCA Partly To Blame For HGV Driver Shortage?
Urgent Government planning is taking place to tackle the HGV Driver shortage. But how did FCA policy help cause a nationwide shortage of HGV drivers?
You may have heard of a UK-wide shortage of HGV drivers available to keep Britain on the move. Stories of empty shelves, delayed deliveries are now standard with news outlets.
A fair amount of blame is being laid at the door of Brexit. One theory is that Eastern European drivers can no longer come to the UK and work. We haven't seen any evidence for that, although we have seen evidence to suggest that EU drivers don't want to risk being quarantined after positive Covid tests whilst in the UK. But yes, for one reason or another, there is a shortage of drivers from the EU.
What is not mentioned is the significant drop in homegrown drivers training to become HGV drivers. A few weeks ago, we were given a tip-off to explain why the number of UK HGV drivers starting training had declined, and that blame was partially placed at the door of the Financial Conduct Authority, so we decided to take a closer look at the concerns.
Is there really a driver shortage?
First of all, we needed to confirm that there was a drop in UK trainees. We called 18 of the UK's top HGV training schools. All of them reported a reduction in the number of UK drivers seeking to become qualified HGV drivers. They reported an average drop of approximately 30% compared to 4-5 years ago.
Next, we asked them to give their views on what they believed the main reasons for this were. Representatives from every training school mentioned the same thing, HGV Driver Training Finance packages and the lack of finance providers. Drivers were asking if finance were available, and most calls would end shortly after the driver being told that finance wasn't available.
In 2016 there were eight national providers of finance for those wanting to become HGV drivers. In 2021 there is zero; not a single finance provider is left to provide funding for potential UK drivers. Without driver training finance, drivers need to find the funding upfront to pay for their training. Saving £5,000 in cash is going to be a tough ask for most people today. It isn't always a shortage of people wanting to become HGV drivers; it's a shortage of people who can raise funds to become HGV drivers.
But why is there no longer one HGV Training Finance provider in the UK? Well, sadly, we can only speculate because those providers have now gone and left the industry. There is no longer any way for us to get in touch with them to ask. We can, however, speak to the HGV training schools and ask them if the finance providers gave any explanations before they left.
Their views were that Finance providers were finding it almost impossible to enforce debts following the guidelines laid out by regulators. Drivers would often fail their HGV tests and then refuse to pay their finance provider. When the credit provider tried to enforce the debts, customers would resist and complain to the Financial Services Ombudsman. These complaints would cost the finance provider another £650 each.
The HGV driver shortage is a complex issue; not all of the blame (maybe not even anywhere close to a majority) can be laid at the door of the FCA. But the lack of HGV driver training finance packages is hindering a recovery in the number of drivers entering the industry.
That is something that we think they could address.