Dealers should expect ‘significant price inflation’ in the valeting industry as suppliers are meeting rising employment costs due to the uncertainty caused by Brexit.

The valeting industry is primarily supported by a pool of staff made up of self-employed contractors with suppliers able to increase and decrease levels of recruitment depending on seasonal demand.

Heath Evans, Assured Group managing director, said: “There are some major challenges facing the valeting industry.

“Brexit has caused a lot of uncertainty and we have seen our recruitment pool drop by 40% this year.”

The British Retail Consortium’s recent ‘A Fair Brexit for Consumers:The People Roadmap' report shows 56% of retailers say EU colleagues are concerned about their right to remain in the UK.

Of those surveyed, 13% of retailers have raised prices to offset rising employment costs and 25% are considering future price rises to offset employment costs.

The BRC report also said 39% of EU nationals are considering leaving the UK and 22% said there have been EU nationals that have already left their business as a result of Brexit.

Evans said: “In our experience we are seeing people leave the UK due to the uncertainty with Brexit and the drop in value of the pound.

“We are also seeing a shift where people are no longer willing to work on a self-employed basis.”

He said that while matching the peak periods the valeting industry sees around plate-change months is a factor, there are wider issues that go beyond that if the industry doesn’t address what is going on.

“There are muted discussions across the industry as a whole about moving away from self-employed status and offering worker status to try and help boost recruitment.

“There is significant price pressure in the dealer, rental and refurbishment industries and it’s at the level where there will have to be significant price inflation if valeting companies are to attract staff.”

Worker status would mean those in the valeting industry would have to guarantee national minimum wage, statutory holiday pay as well as things like statutory sick pay and maternity leave.

Evans said he is working on creating a new automotive valeting industry association where problems around recruitment, Brexit and pricing can be discussed officially among peers.

He said: “It’s early days but I’m hoping to get something set up before the end of this year.

“We’re already in discussions with the HMRC about employment status and there have also been discussions with dealers about price increases in order to help meet the challenges we’re facing.”