The government has urged business to take advantage of a £50m grant scheme to boost the training and recruitment of 50,000 new customs brokers for the coming trade border with the EU, despite industry warnings that the scheme is insufficient and “flawed”.
Customs, logistics and haulage industry leaders said the drive to expand capacity in the customs sector before border checks come into force in January next year was facing headwinds caused by Covid-19 and the uncertainty around EU-UK trade talks.
“I urge the intermediary sector and businesses to take advantage of the help on offer now,” said Michael Gove, the cabinet office minister, adding that brokers, freight forwarders and express parcel operators will play a “critical role for businesses” from January.
But despite the new business opportunities, industry leaders warned that the incentives were too small to entice enough customs businesses to risk aggressive expansion at a time when many were facing cash flow crunches and hiring freezes as a result of coronavirus.
One industry executive described the government’s approach as “like the Somme”, blindly throwing people and resources at the problem without thinking strategically.
Richard Burnett, chief executive of the Road Haulage Association, the UK industry body whose members operate more than 100,000 trucks, said the government had been “complacent” on the issue.
“Government thinks that businesses are going to invest in this, but they don’t understand the market and the scale of risk that they are asking businesses to take in a financially challenging period.
“It takes six months to a year to train one person properly and as it stands today we have five months to do this. No matter which way you turn this is flawed,” he said.
Those involved in consultations for the scheme have complained to the Financial Times of a lack of detail, lack of listening and lack of co-ordination from HM Revenue & Customs with too many questions still unanswered.
HMRC said this was unfair, and that there had been “intensive engagement” with industry, including the decision last month to introduce a phased implementation of the new import controls in recognition of the impact of Covid-19.
The government is offering grants of up to £3,000 to cover recruitment costs and up to £12,000 in contribution to salary for new employees. Training costs will be covered up to £1,500 per employee. The grants will be available until June 30 2021, or until the fund runs out.
The government will have invested a total of £84m to boost customs training, including a new online customs academy, which has run 3,000 courses so far. Bifa, the international freight forwarders’ association, has trained another 1,700 people since 2019, leaving a huge shortfall.
Bifa has warned that much of the industry was waiting to see how much EU trade would actually survive given the additional bureaucratic costs. Many members were also reluctant to accept new clients that have no experience of customs procedures, because the liabilities could be too large.
Robert Keen, the director-general of Bifa, welcomed the additional funding but sounded a note of caution around whether the grants would be sufficient to motivate his members to invest in new hires.
“We can only keep our fingers crossed that it produces the thousands of additional customs experts that the government agrees will be needed come January 1 2021,” he said.
Among the key issues raised with the government is how companies that have hit the EU’s state-aid limits of €200,000 over three years as a result of the Covid-19 crisis will still be able to access the grant funding.
This issue remains unresolved, although officials in HM Revenue & Customs are said to be looking to find ways to circumvent the problem.
In an attempt to widen the reach of the scheme, the government has also opened it to businesses that intend to manage customs formalities in-house, as well as workers who want to retrain while furloughed from another job.
Marco Forgione, director-general of the Institute for Export and International Trade, a professional body providing support to business, welcomed the additional flexibility for businesses but questioned why individuals could not apply for the grants.
“There has to be flexibility not just for business, but also for individuals. As the furlough scheme unwinds these courses offer a real lifeline and opportunity of a new career. We’ve got to build capacity because there is going to be a lack of capacity come January 1 for sure,” he said.