GUEST COLUMN

Mark Harrison, economic research and employment policy manager at The Food and Drink Federation (FDF), on how labour and skills shortages are grinding gears across the food supply chain

Labour and skills shortages are hitting the whole food and drink supply chain and manufacturing is no exception. FDF members are reporting shortages of HGV drivers, engineers, production operatives, and agency workers that have escalated over the summer. NOT JUST COVID 70% A number of factors have caused these shortages. EU workers have returned to their country of origin, often due to the pandemic, Brexit, or both. Changes to the UK immigration system have made it far more diffi cult and expensive to recruit labour from the EU. And the ‘pingdemic’ and increasing numbers of staff self-isolating has added signifi cant additional short-term pressure.

Further factors are causing particularly acute shortages in the haulage sector, with the Road Haulage Association estimating the UK is more than 100,000 drivers short of what it needs. An ageing workforce meant many drivers retired or found alternative employment during the pandemic, while licence tests for new HGV drivers were suspended for months. The introduction of IR35 off -payroll tax regulations has also led to some drivers leaving the profession. In July, the FDF surveyed 128 businesses from across the food chain on the driver and other labour shortages. Some 70% stated they were short of drivers, leading to hundreds of tonnes of food being wasted each month, while 87% said their current logistical issues were worse than those faced during the fi rst Covid-19 lockdown. The challenge of bringing ingredients in and transporting goods out on time has led to some FDF members pausing production or reducing output.

And things are expected to get worse before they get better. More than 80% were concerned about the impact of Covid-19 restrictions easing, hospitality opening up over the summer, and meeting Christmas demand. More than half, 59%, were ‘very concerned’ or ‘highly concerned’ about Christmas.

While food chain businesses were clear on the challenges, they were also clear on the solutions. More than 90% thought that increasing driver testing capacity, driver testing speed, and funding driver training were important solutions. However, a similar proportion also thought international recruitment would be important, for example a temporary visa for HGV drivers modelled on the seasonal workers pilot.

As well as a risk to availability and consumer choice, none of the 128 businesses ruled out increasing prices if driver wages continue to rise at their current rate, with 40% stating price rises were defi nite.

In our recent report Eating into Household Budgets, the FDF warned of

SHORT OF DRIVERS the risks of consumer food price IN JULY infl ation during the next three years, due to a host of costs, ranging from global commodity prices to new government regulation, coinciding with the challenges brought about by the pandemic and Brexit. NFU members will be well aware that the current labour shortages extend far beyond HGV drivers.

Nearly two-thirds of respondents to our survey reported a shortage of temporary agency workers, more than half a shortage of processing operatives, and a quarter a shortage of engineers and technicians. The FDF, NFU, and a number of other food chain organisations are working with Grant Thornton to produce a comprehensive assessment of the food chain labour market and how we can ensure that the workers and skills the sector needs for the future can be secured.

Beyond the solutions to the immediate crisis in haulage, food businesses and the government need to come together to ensure that both domestic skills provision in the UK and our immigration systems are fi t for purpose, to ensure our food chain and the wider economy can thrive and grow into the future.