Despite high unemployment in the UK, there is a shortage of LGV drivers and it is estimated that the UK will need an extra 150,000 drivers by 2020.
In Nottinghamshire, it is estimated that for every nine vacancies there is only one qualified candidate. (link)
The average age of a (LGV) Large Goods Vehicle driver is 53. Only 2% of drivers are under 25.
Regular readers of this blog will know that I tend to favour green transport – Bicycles, freight by rail, solar power, higher taxes on petrol e.t.c. But, I also know that 99% of the goods that I buy are delivered by LGV vehicles. Lorries are an essential part of the economy – almost as important as perhaps coal miners were in the 1960s and 70s. If one section of workers could bring the UK economy to a standstill, it is LGV drivers.
Why Shortage of Lorry drivers?
1. We don’t value vocational careers / qualifications. Young people don’t see a career in logistics as a long-term career. As a society, we tend to place less value on non-academic qualifications which are essential for the economy.
2. Lack of funding for driver training. It costs £3-£5,000 to gain the necessary qualifications to become a LGV drivers; and only 50% of applicants pass the test. This seems a lot. (Here the Daily Mail blames the shortage of lorry drivers on the EU Regulations which require good driver training – the mandatory Certificate for Professional Competence.)
But, compared to the cost of a three year university degree, training for LGV training is a fraction of the price. (BTW: Given the importance and potential danger of driving LGV vehicles, it is quite right we have very high standards. EU regulations could save lives. The problem is that as a society we are happy to spend £100,000 to put a student through three years of university to get a degree, but we are reluctant to spend £5,000 on LGV training.)
We need both graduates and lorry drivers – but perhaps too much weighting has been placed on university education and not enough on vocational training which is more pressing for the immediate needs of the economy. As I’ve said before, I don’t support the government’s target to get 50% of young people into university.
3. Economic growth. Demand for LGV drivers is a derived demand. With higher economic growth, there will be greater output and consumption, requiring more goods to be transported around the country. As the economy recovers, demand for drivers will grow.
Why not leave it to the free market?
You could argue if there is a shortage of drivers, this will push up average wages and this will create an incentive for firms and workers to spend the £5,000 to get the training. This market incentive will then fill in the job vacancies. This will occur to some extent, but I would argue there is very likely to be a degree of market failure.
1. Free rider problem. A big logistics firm could sponsor people to pay their £5,000 – but then trained LGV drivers could go and work for another company who don’t have the cost of training. Therefore, firms fear that others will free-ride on their investment in training, which discourages them from doing it in the first place.
2. It takes time to attract and train young people to become skilled. If you leave it for market forces – there may come a real shortage when many of current generation retire – this gap of 150,000 lorry drivers could take a long time to fill. Higher wages cannot solve this shortage in the short-term.
3. Immigration easiest solution. The most likely free-market response will be for firms to look outside the UK and encourage immigration of LGV trained drivers from elsewhere. But, this creates a conflict – given the governments target to limit net immigration.
4. Big investment. Many young people would be reluctant to invest £5,000 to get training, when there is no guarantee of passing.
If the government subsidises university education, why shouldn’t we use same principles to subsidise vocational training?
Logistics firms say that their industry is run on slim margins, investing in training is unattractive given how competitive the industry is. In the short term, it is cheaper to pay a little more to attract drivers, rather than plan for the long-term.
In terms of importance to the economy, we can’t underestimate the value of lorry drivers – it may not be the choice of career for young people, we may even resent lorries as they trundle through our village or overtake us when we are on a push bike. But, it is unfair to expect to benefit from all goods and services delivered by lorries without supporting the industry.
There is a strong case for the government to fund more vocational training – of which LGV driver training should be high on the agenda.