Re-evaluating financial standing is not welcome
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ON TOP OF THE problems of rising costs, unreliable banks and awful winter road conditions, there has come an increase in financial standing requirements from 1 January, which was reported in CM last week ('Financial standing requirement for hire-and-reward 0-licences increases', 7 January).
The requirement of financial standing for the professional transport sector has been raised to £8,100 for the first vehicle, up from £6,200; and to £4,500 for each vehicle thereafter, up from £3,400.
This change is down to EU law and the fall in the value of sterling.
Et.; law says those member states outside of the Eurozone must re-evaluate their financial standing every five years, and sterling is down 30% against the euro compared with five years ago. The euro rates — €19,000 and €5,000 — haven't changed. Raising the barrier at this stage seems crazy. The question is what to do about it. I would like to start with the wayTraffic Commissioners assess financial standing.
Rules are too restrictive
Cash should be working and not standing idle.
I don't want hauliers on the road who can't afford to operate safely any more than the TCs. hut the current rules are too restrictive and are in urgent need of review.
The Senior TC. Philip Brown, is getting to grips with his new role — which should help bring greater transparency and consistency, and a welcome duty to consult with stakeholders, such as the Road Haulage Association (RHA).
One of Brown's first tasks is to review the directions and guidance to TCs; and the financial standing issue should be his top priority. The RHA has submitted some suggestions, and I hope we can discuss the issue further.
We have, for some time, been trying to find a formula with which financial standing can be secured. Eighteen months ago, the RHA was close to a deal with a major bank that would have made presecured, draw-down, loan facilities available to members. The deal
had Brown's support and was with the bank's lawyers when it was swept away when the financial crisis broke. The RHA continues to pursue the idea, but there is no easy solution.
There is a broad recognition that the revaluation is unwelcome, especially in the current climate; and I detect no great enthusiasm for the change at the Department for Transport. It is ironic that the lesser financial standing rule for restricted licence holders (ownaccount) — just £3,100 for the first vehicle and £1,700 thereafter — is unchanged. These operators are not covered by the EU Directive; just by a bit or UK "gold-plating'.'
And then there is the customer angle. Undoubtedly costs are on the rise, and pressure on a hauliers' financial standing has to be added to the list — and, inevitably,regained from customers. •