Thread by @pmdfoster

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Remember that £50m grant scheme to help create “new” customs agents? Turns out the £15k grants are often subsidising poaching agents from one company to the other... My latest via @FT
on.ft.com/3ouAAeg

@FT How is this possible? Well, because under the terms of the scheme, you only have to show that you are increasing the capacity of YOUR business to do customs forms - not the industry as a whole /2

gov.uk/guidance/grant…

@FT So that means that if you hire someone already working in customs from a rival company (and there's a limited pool of talent) then that hire qualifies for the £15k grant - £3k for recruitment and up to £12k for salary. The result? Poaching. /3

@FT This has angered several customs agents/brokers that @FT has spoken to who think the £15k grants should be used for hiring NEW entrants to the profession, not subsidising the shuffling of the deck, as it were. /4

@FT How do we know this is happening?

Well, recruitment agencies emailing companies offering for EG “a very professional candidate, currently working at a well-known customs agent”, while flagging the grants available to offset hiring costs. /5

@FT The result is that since January salaries have gone from c £25k for a customs broker of 2-3 years standing who can work unsupervised....to about £35k now, according to one recruitment agent we spoke to /6

@FT This is partly supply and demand....but customs brokers say it is being aided and abetted by the grant scheme that was intended to swell the ranks of the industry....so how many agents has the scheme created? Good question.../7

@FT The Grants scheme is run by PricewaterhouseCoopers and, according to the website, the grants have funded "the recruitment of almost 600 new customs agents" - but how many are really 'new'? Short answer is we don't know /8

customsintermediarygrant.co.uk

@FT We asked @HMRCgovuk for numbers, but they didn't provide any.

They did say the average salary of grant-aided hires in latest wave is £24k, from which they deduce they're mostly likely to be "new entrants" - but given experienced salary was £25k in Jan, not clear that's right/9

@FT @HMRCgovuk In any event, given industry estimates we'll need 50,000 more trained staff to do 260m extra customs declarations a year after Jan 1 2021, even 600 isn't that many. As both industry has been warning for a long time, there is a huge shortage... /10

ft.com/content/be64c4…

@FT @HMRCgovuk Given that shortage, it's not surprising that salaries are going up.

The new Trader Support Scheme for GB-NI customs work (which needs to be actually working by Jan 1, as opposed to July 1 for EU-GB) is also trying to hire, per one source, 75 experienced agents /11

@FT @HMRCgovuk The difficulty, as @RHARichardB explains is that it takes 18 months at least to get new people fully up to speed - and to do that, the newbies need to learn from old hands. Hence more pressure to land existing talent. /12

@FT @HMRCgovuk @RHARichardB The govt says the grants scheme was designed to be "flexible" - and companies say that it has been administered in a light touch way. Not too much bureaucracy and money comes in quick time /13

@FT @HMRCgovuk @RHARichardB But perhaps what this story demonstrates, again, is the how Whitehall/Government has consistently failed to get to grips with the realities of industry business when it comes to trying to force the adjustment/preparedness issue before we hit the coming hard #Brexit /14

@FT @HMRCgovuk @RHARichardB As have written before, #Covid19 was a real set back, because to many companies were too buys surviving - furloughing staff etc - to focus their attention on tooling up for the new border. But if it takes 18mths to train someone, it is now objectively too late /15

@FT @HMRCgovuk @RHARichardB What this story might indicate is a looming supply crunch on expertise to handle the new declarations/paperwork - and rising salaries that will, ultimately create rising costs for business, which will in turn pass it on to consumers. /16

@FT @HMRCgovuk @RHARichardB The first place that might feel the pinch is Northern Ireland - as @MichaelAodhan and others have warned - recalling the leaked Treasury slides from the election warning of costs for NI retailers/consumers /17

https://twitter.com/pmdfoster/status/1202960167354216454?s=20

@FT @HMRCgovuk @RHARichardB @MichaelAodhan Of course, on one level, these salary rises should drive the market to adjust, attracting more recruits into the business and once capacity is achieved, salaries should stabilise, or even correct themsleves downwards if we reach over-capacity down the line. /18

@FT @HMRCgovuk @RHARichardB @MichaelAodhan For it's part the government @HMRCgovuk is apparently not unduly worried. It just urges everyone to apply for the grants. And adds: "We’re on track to have the right people in place with the right skills by the end of the transition period.”

Let's hope they're right. ENDS