An Independent Review of the Economic Requirement for Trained Seafarers in the UK

7/29/2019 An Independent Review of the Economic Requirement for Trained Seafarers in the UK

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Anindependent

review

of

the

economicrequirementfor

trainedseafarersintheUKFinalReporttoDfTandReviewPanel

December2011


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Contents

Glossaryofkeyterms............................................................................................................................... 41 Executivesummary..................................................................................................................... 62 Introduction ............................................................................................................................. 18

2.1 Background.......................................................................................................................... 182.2 ProjectScope ....................................................................................................................... 182.3 Purposeofthisdocument ..................................................................................................... 182.4 Structureofthisdocument ................................................................................................... 192.5 Stakeholders ........................................................................................................................ 19

3 Methodology............................................................................................................................ 213.1 Overview ............................................................................................................................. 213.2 PreparatoryStage ................................................................................................................ 213.3 Stage1:InitialConsultationsandStudyDesign ....................................................................... 213.4 Stage2PrimaryDataCollection .......................................................................................... 213.5 Stage3:EconomicModelling................................................................................................. 223.6 Stage4Synthesis ............................................................................................................... 22

4 Reviewcontext......................................................................................................................... 234.1 TheUKMaritimeSector ........................................................................................................ 234.2 Seafarersandexseafarers .................................................................................................... 264.3 Seafarertraining .................................................................................................................. 284.4 SupportforseafarertrainingintheUK................................................................................... 314.5 Conclusion ........................................................................................................................... 35

5 Keythemesemergingfromtheliteraturereview ........................................................................ 375.1 Context ............................................................................................................................... 375.2 ThedeclineinthenumberofUKseafarers ............................................................................. 385.3 Therelativeattractivenessofonshoreworktooffshorework.................................................. 415.4 Thecasefortrainedseafarersfromdevelopedmarkets .......................................................... 425.5 Conclusion ........................................................................................................................... 42

6 Internationalcomparison .......................................................................................................... 446.1 ComparisonswithtraditionalEuropeanrivals ......................................................................... 446.2 Comparisonwithemergingrivals ........................................................................................... 47


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8.2 Demandintheshippingsectoroverthedecadeahead............................................................ 648.3 Seafarersupplyandtheshippingindustryskillsgap ............................................................. 678.4 ExseafarersacrossthewiderUKmaritimesector................................................................... 678.5 Overviewofsupplyanddemand:centralforecast................................................................... 698.6 Alternativedemandandsupplyassumptions.......................................................................... 708.7 Thepotentialroleforforeignseafarers .................................................................................. 748.8 AssumingSMarTdiscontinuation ........................................................................................... 758.9 Conclusion ........................................................................................................................... 75

9 TherationaleforcontinuedsupportforseafarertrainingintheUK .............................................. 779.1 Theoriginalrationaleforthepolicyintervention .................................................................... 779.2 Wasthepolicyinterventioneffective? ................................................................................... 809.3 Isthereacontinuingrationaleforpolicyintervention?............................................................ 829.4 Comparisonfromothersectors ............................................................................................. 849.5 Criteriaforassessingalternatives .......................................................................................... 889.6 Conclusion ........................................................................................................................... 89

10 Recommendations.................................................................................................................... 9010.1 Options ............................................................................................................................... 9010.2 LonglistOptionevaluation ................................................................................................... 9410.3 OptionsAnalysis ................................................................................................................... 9810.4 Conclusionandnextsteps................................................................................................... 101

AnnexeA Bibliography ....................................................................................................................... 103AnnexeBDetailofthedemandandsupplyforecasts ........................................................................... 104

12.1 EstimatingUKshippingindustryemploymentintherecentpast ............................................ 10412.2 Estimatingthestartingpointfordemandandsupplyprojections ........................................... 10612.3 Projectingdemandoverthecomingdecade ......................................................................... 10712.4 AddingnonUKsupplytoarriveattheshippingindustryskillsgap....................................... 11312.5 EmploymentofexseafarersacrossthewiderUKmaritimesector ......................................... 11412.6 Projectingdemandandsupplyforexseafarersthroughto2021............................................ 11612.7 Overviewofsupplyanddemand:centralforecast................................................................. 118


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GlossaryofkeytermsAdditionality Theextenttowhichneweconomicactivity(measuredasjobs,incomeand

production)addstoexistingeconomicactivityratherthanreplacesit.

Cadets Atraineeofficer.Thisreportusesthetermcadetandtrainee

interchangeably.

CertificateofCompetecy

(CoC)

IntheUK,thesearecertificatesissuedtoseafarersfollowingasuccessful

assessmentandexamination.Therequiredstandardsofcompetencearesetout

bytheInternationalConventiononStandardsofTraining,Certificationand

WatchkeepingforSeafarers1978asamendedanditsassociatedcode.

Certificateof

Equivalent

Competency(CEC)In

the

UK,

these

are

certificates

issued

by

the

MCA

to

seafarers

of

non

UK

countriestoallowthemtoworkasOfficersonUKregisteredships.TheMCA

checksthatapplicantsforCECsarequalifiedtothesamestandardsasholdersof

UKCoCs.

Comparativeadvantage Asituationinwhichacountry,individual,companyorregioncanproducea

goodataloweropportunitycostthanacompetitor.

Counterfactual Ahypotheticalmeasureofwhatwouldhavehappenedintheabsenceofa

policyinterventionorevent.

DeadweightTonnage(DwT) Ameasureofhowmuchweightashipcansafelycarry.Itisthesumofthe

weightsof

cargo,

fuel,

fresh

water,

ballast

water,

provisions,

passengers,

and

crew.Itisexpressedinlongtonnesof2,240pounds(1,016kilograms).

Demandforseafarers Therequirementbytheshippingindustryforindividualstoworkatsea.Thiscan

bedisaggregatedtofocusondemandforratings,officersandUK/nonUK

seafarers.

Demandforexseafarers Therequirementbythemaritimeclusterforindividualswithaseafaring

background.ThiscanbedisaggregatedtofocusonUK/nonUKexseafarers.

Directeffects Thesearetheinitialandimmediateeconomicactivitiesgeneratedbyan

industry,sector,projectordevelopment.Directimpactsareoftenreferredtoas

firstround

impacts

as

they

coincide

with

the

first

round

of

spending

in

the

economy.

Exseafarer Individualswhopreviouslyworkedatsea,butnowworkoutsidetheshipping

sector(eitherinthemaritimeclusterorelsewhere)

FlagofConvenience Registeringashipinadifferentsovereignstatefromwhichtheshipowneris

based(alsoreferredtoasanOpenRegister).

Flagstate Internationallawrequiresthateverymerchantshipberegisteredinacountry.

Thecountryinwhichashipisregisterediscalleditsflagstate.Ashipoperates

underthelawsofitsflagstate.

Freeriderissue Anexampleofmarketfailure,whereanindividual,oragroupofindividuals,

consumeorpaylessthantheirfairshareofthecostofacommonresource.

Morecommonlyknownasthefreeriderproblemineconomics.

Indirecteffects Thesearethechangesinemployment,incomeandproductionlevelsin

associatedindustriesthatsupplyinputsintotheindustrywherethefirstround

spendinghasoccurred.


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Agency(MCA) policyandpreventingthelossoflifeonthecoastandatsea.

MerchantNavy ThenamegiventotheUKscommercialshippingsector.

Multipliers

Therelationship

between

a

particular

economic

activity

and

the

total

additional

economyactivityitgenerates.

Officer Membersofshipsmanagement.Theytypicallyworkintwodepartments

navigation(alsoknownasdeck)andengineering.

Offshore Activitiescarriedoutatsea.

Onshore Activitiesrelatedtothemaritimesectorcarriedoutonland.

Opportunitycost Thecostofthenextbestalternativenotchosen(forgone).

Rating

Members

of

ships

crews

that

assist

officers

across

all

departments.

Seafarer Individualswhopredominatelyworkatsea.Theyaretypicallyfoundinthe

shipping,energyandleisureshippingsegmentsofthemaritimesector.

Shippingsector Thepartofthemaritimesectorthatisconcernedwiththecarriageofgoodsand

passengers,aswellasthecharteringofvessels.

StandardsofTraining,

Certificationand

Watchkeeping(STCW)

Basicqualificationstandardsformasters,officersandwatchpersonnelon

merchantshipsasrequiredbytheInternationalMaritimeOrganisationthrough

theSTCWConvention.

SupportforMaritime

Training(SMarT)

AUKGovernmentschemethatgivesfinancialassistancetorecognisedtraining

providers(i.e.shippingcompaniesandothersponsoringorganisations)

providingmerchantnavytraining.

TonnageTax Analternativetocorporationtax,wherebytaxisleviedonafixednotional

profit,calculatedbyreferencetothenettonnageofships,insteadoftheactual

profitsearnedfromshippingactivities.


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1 Executivesummary60SecondSummary

ThemaritimesectorisamajorcontributortotheUKseconomyandofstrategic

importance.Aswellasthemoreobviousatseaoroffshoreactivities(the

shippingsector)inwhichseafarerswork,thesectoralsoconsistsofasizeable

onshorecomponent(themaritimecluster)whichrelies,tosomeextent,ona

steadysupplyofexseafarerstofunctioneffectively.

Themaritimesectorisdifferent,bywayofcertaindistinctcharacteristics;chief

amongstthese

is

the

highly

mobile

nature

of

both

labour

and

shipping

companies.Sincetheshippingsectorandmaritimeclusterarecloselylinked,

changestothepolicyenvironmentinonearelikelytohaveconsequencesonthe

other,andultimatelythewiderUKeconomy.

Giventheimportanceofthesector,theUKGovernmentprovidesapackageof

supportmechanisms.Presently,oneofthekeyshippingindustrysupport

mechanismstheGovernmentprovidesisasubsidyforseafarertrainingknown

asSMarT.SMarTisworth12millionin2011/12andcoversupto40percentof

alltraining

costs.

It

provides

an

incentive

for

shipping

companies

to

train

new

cadetsonboardshipsastheyarecompensated,inpart,forthecosts.Upon

completionofthetraining,theseseafarersarefreetomovetoanothercompany

whichbenefitsfromtheirskillsbuthasnotcontributedtotheirtraining.

StakeholdersfromtheshippingsectorhaveindicatedastrongpreferenceforUK

seafarersattheofficerlevel,andthereisalsoastrongpreferenceforUKex

seafarersinthemaritimecluster.Thesepreferencesdonotnecessarilyextendto

seafarersattheratinglevel,wherethereappearstobeagreaterdegreeof

substitutabilitywith

non

UK

labour.

Projectionsmadeaspartofthisstudyshowagapbetweenthedemandfor,and

supplyof,trainedUKseafarers.Theperiod2016to2019willseethisgappeak.

By2021thegapisexpectedtobec.3,500inthecaseofdeckandengineofficers

atsea,andover1,600inthecaseofexseafarers(mainlyexofficers)inthe

maritimecluster.Thoseshortfallsareequivalentto10percentand9percent,

respectively,oftotalprojecteddemandinthosesectors.Thesegapswouldbe

evengreaterifSMarTwerediscontinuedwithoutaneffectivereplacement.

ThedemandgapforUKseafarersisunlikelytobefilledbymarketforcesalone,

perhapsforcingshippingcompaniestoadoptsecondbestsolutionsintheform

ofnonUKofficersandtechnicalratings.Moreover,alackoftrainedUKseafarers

willresultinareductioninUKexseafarersavailabletothemaritimecluster,

reducingitscompetitivenessovertime.Logically,onthisbasis,thereappearsto

be a continuing rationale for a policy intervention to support maritime training.


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considerationbythepanelandtheMinister;acontinuationofSMarT;the

introductionofalevyandgrantsystem;oranapprenticeshipmodel.

Theseviews

represent

Deloitte

and

Oxford

Economics

conclusions

on

the

basis

oftheavailableevidenceandwithintheremitofthestudy.

[continuedoverleaf]


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Background

TheMinisterforShippingwishestoconductanindependentassessmentofthe

economicrequirement

for

seafarer

training

in

the

UK.

Thisreportpresentstheindependentfindingsfromtheresearch,tobereviewed

bytheindustrypanel,beforerecommendationsforfutureactionaremadeto

theMinisterforShipping.

Method

ForthepurposesofthisstudythedemandforseafarersreferstoUKbased

shippingcompanies'needforseafarersworkingatsea.Demandforonshore

seafarersor,

more

precisely,

ex

seafarers,

refers

to

UK

based

shipping

companies'needforexseafarersanddemandinotherUKbasedorganisations

whereanexseafarerisrequired.SupplyreferstothestockofUKtrained

seafarers.

InordertoassesstherequirementforUKseafarersandexseafarers;assessthe

efficiencyandeffectivenessofasistraining;anddevelopoptionsforfuture

fundingfortraining,thefollowingmethodologyhasbeendeployed:

A

literature

review

of

academic

articles,

policy

documents

and

press

articles;

Astakeholderconsultationconsistingofonetoonediscussionswith

panelmembers,anindustryworkshopandanonlinesurvey;

Developingabespokeeconomicmodeltoprovideaviewonfuture

realisedandderiveddemandfortrainedseafarersandthefuturesupply

ofUKtrainedseafarers;and

A

synthesis

of

the

above

to

answer

the

key

research

questions

to

provideanindependentviewonthewhetherthereisacontinuedneed

forGovernmentinterventionand,ifso,howisthemostefficientand

effectivewayforthistobedone.

Maritime:auniquesector?

Analysisconfirmsthatseafarertrainingisaverycomplexissue:bothintermsof

definingtheparametersoftheproblemandbecauseoftheunique

characteristicsofthemaritimesector.

Themaritimesectordifferstoothersectorsintheeconomyinanumberofways.

Namely:

Acriticalroleinfacilitatingtrade:themaritimesectortransportsover

90percentoftheUKsvisibleimportsandexports.

High levels of labour mobility: the labour market for seafarers is


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Lengthandnatureoftraining:thetrainingrequiredtobecomea

certificatedseafarercombineselementsofacademicandvocational

study.

Currently,

cadets

finish

training/qualifying

almost

debt

free,

but

similartothemedicalandlegalprofessions,itcantakeaprolonged

periodoftimetoachieveseniorofficerstatus.Newlyqualifiedofficers

needaminimumof18monthsseaserviceandapproximately6months

atcollegetogainaChiefMateorSecondEngineerCoC.Actual

promotiondependsonemploymentpotentialinthevariouscompanies.

Seafarertraining

ThebasicstructureforseafaringtrainingintheUKfollowsanapprenticeship

styleformat.

While

seafarers

are

trained

in

a

tertiary

capacity,

shipping

companiesplayasignificantroleduetooffshoretrainingrequirements.

ThemodernofficertrainingprogrammeintheUKinvolvesdevelopingamastery

acrossarangeofseafaringskillsincludingnavigation,seamanshipandship

stability,aswellasothermoreobviouslytransferableskillssuchasIT,business

andlaw,engineeringandelectrics.Therearecertainminimumacademicand

physicalrequirementstobecomeanofficer,andthelengthoftimetoachieve

thestatusofJuniorOfficerisnormallythreeyears.

UnlikeOfficertraining,therearenominimumacademicqualificationsforRatings

qualifications,althoughpotentialRatingsmustalsomeetmedicalandeyesight

requirements.StudentsstudyingtobecomeRatingsmustalsoundertake

compulsorytrainingandspendtimeatsea.

AllcountrieswhicharesignatorytoSTCWandprovidetrainingleadingtoOfficer

oftheWatchmustincorporateseaserviceintheirtraininginordertoissuea

STCWCoC.TheUKdoesdifferinthewaytrainingisprovidedhowever.For

example,

the

Danish

and

Dutch

front

load

their

training

to

students

of

a

much

youngerageaspartoftheirtertiary/furthereducation.TheUKtraining

programmeisregardedasmarginallysuperiortootherEuropeanschemes.

Thecostofseafarertrainingislargelybornebyshippingcompanies(although

thereareasmallnumberofcharitablesponsorshipsavailable),withassistance

fromGovernment.Inthissense,fundingforseafarertrainingdifferstomany

otherindustriesintheUKinthatemployersreceivesupportfortraining

[prospective]employees.Manyotherindustriesdonotreceivethiskindof

support,

whilst

others

in

the

national

interest

only

receive

complete

support

at

givenstages.Fromoneextremetotheother,examplesoftrainingsupport

include:

Theprofessionalservicesindustrywhere,onceemployed,professional

qualificationsarepaidforbythefirm,andindividualsmaybepaidless

toreflectthiscontribution;


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Demand

Forratings,thereisatendencytodemandandemploycheaperforeignlabour

whichis

in

greater

abundance

from

emerging

markets.

For

officers,

however,

thereappearstobeapreferenceforUKseafarersduetoqualificationlevels,

experience,andalsotheeaseinemployingUKresidents.

Theacademicliteraturesuggeststhatcompaniesarecontinuingtotrainand

recruitalargenumberofBritishseafarersintohighlyspecialisedandtechnical

rolesduetotheconfidenceplacedbythesecompaniesontheUKseafarer

trainingprogramme,certificationproceduresandproventrackrecordofBritish

seafarers.

Supply

Attractingthenextgenerationofseafarersisrecognisedasachallengebythe

relevantauthorities.

TheEUhasidentifiedthemaritimesectorasanareaitwishestoencourageand

remainstronginforacombinationofeconomic,environmentalandnational

interests,andworkisalreadyunderwayfromUKstakeholderstoensurethatthe

industryhasareadysupplyofpotentialentrants(fundingissues

notwithstanding).EU

Maritime

State

Aid

Guidelines

acknowledges

this

and

allowsforanexceptiontothegeneralruleswhichdiscouragestateaid.

Finally,whileSMarTaimstoprovidefundingtoshippingcompanieswiththeaim

ofincreasingtheintakeoftraineesintotheindustry,suchapolicywillnot

achieveitsfullpotentialifthereisalackofdemandfromshippingcompaniesfor

UKseafarersduetocostconsiderations.

Afreeriderissue

Thedirect

costs

of

training

are

currently

borne

jointly

by

shipping

companies

and

Government,andthereissomeevidenceofafreeriderissue.

Seafarers,exseafarers,shippingcompaniesandGovernmenteachbenefitfrom

thisfundingindifferentways.Itreducescostsatthepointoftrainingfor

seafarers,exseafarersandshippingcompanies,andfortheGovernmentthe

contributionoftheaforementionedthenconferswiderbenefitsfortheUK

economy.

However,

ex

seafarers

contribute

significantly

in

an

on

shore

capacity

for

third

partieswhomdonotneedtofundtrainingbutnonethelessbenefitfromthe

skillsthataccruedirectlyfromSMarTandindirectlythroughtimeatsea(though

thirdpartieswillstillhavetofundseparatetrainingtoreadyseafarersforon

shoreroles)

Recentevidencefromthecoauthorsofthisstudy,OxfordEconomics,suggests


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Tacklingtheissue

Thedrivertreebelowintroducesthequestionsposedandansweredin

consideringafuturecourseofactionfortheGovernment.

HasSMarTbeeneffective?

TheactualimpactofSMarTin2009isnotthesimpledifferencebetweenthe450

cadettraineesin1998and925cadettraineesin2009(beforeandafterthe

introductionofSMarT).Thisisbecauseitishighlylikelythatintheabsenceof

SMarT,thenumberofnewcadetsbeingtrainedwouldnothaveremainedstatic

at450eachyear.

Thenumber

of

cadets

will

have

been

influenced

greatly

by

other

factors

includingtheintroductionofthetonnagetaxin2000whichitselfincludesan

obligationthatparticipatingcompaniesmusttrainatleastoneofficertraineefor

each15officerpostsinexistenceonthevesselsthatitoperates.

OurconsultationsshowthattheindustryfirmlybelievesthatSMarThasbeen

ff ti i i i th b f d t d th f t i d UK f


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IstherelikelytobedemandforUKseafarersinfuture?

ForecastsmadebyOxfordEconomicssuggestthattherewillcontinuetobeagap

betweenthe

demand

for

trained

UK

seafarers

/ex

seafarers

and

the

supply

of

trainedUKseafarers(whereseafarersinthiscasereferstoofficers).

Basedoncertainassumptions,agapisforecasttodevelopbetweendemandfor,

andsupplyof,trainedUKseafarers,peakinginthe20162019period.By2021

thisgapwillhavereducedslightlytoc.3,500inthecaseofdeckandengine

officersatseaandover1,600inthecaseofexseafarers(mainlyexofficers)in

themaritimecluster.Thoseshortfallsareequivalentto10percentand9per

cent,respectively,oftotalprojecteddemandinthosesectors

Doesmarketfailurepersist?

Inothermarkets,economictheorypredictsthatthegapmentionedabove

would,overtime,closeashigherdemandwillleadtoincreasedwagesfor

seafarersandexseafarers,whichinturnwouldincentivisemorestudentsto

trainasseafarers,increasingsupply.

However,thismaynotoccurinthecaseofseafaringduetothenatureoftheUK

trainingprogramme.Theatseacomponentoftrainingwillmeanthatevenif

thereis

an

increase

in

the

number

of

students

wishing

to

complete

cadet

training,unlessshippingcompaniesarepreparedtoaccommodatethese

increasednumbersthetotalsupplyoftrainedseafarerswillnotincrease.

Onthisbasis,itispossibletoconclude:

thewholedemandgapforUKseafarersisunlikelytobefilledbymarket

forcesalone;

rather,shippingcompaniesarelikelytoreacttoashortfallinsupplyof

UKseafarers

by

turning

to

second

best

solutions

in

the

form

of

non

UK

officersandtechnicalratings;and

accordingly,themarketfailurefortrainedUKseafarersisexpectedto

persistandrequirescontinuedintervention.

Whatarethepolicyoptionsforintervention?

Eachoftheoptionsoutlinedbelowarepredicatedonthefollowingthree

assumptions,whichhavebeenmadetakingintoaccounttheevidencereceived

andanalysis

conducted:

ShippingcompanieshaveapreferenceforUKtrainedseafarers.

Companiesinthemaritimeclusterhaveanevenstrongerpreferencefor

UKtrainedexseafarers.

By 2021, there will be gap between demand for and supply of UK


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Onthebasisoftheresearch,eachoftheaboveoptionshasbeenarbitrarilyscoredonthe

followingmeasurestoprovideanoverallindicationofsuitability:

ThecostoftheremedytoGovernment:The(broadbrush)financialcostofthe

remedy.

Effectiveness:Theextenttowhichremediesarelikelytobeeffectivein

eliminatingthemarketfailure.

Longrunsustainability:Whetherthisremedyislikelytobeviableinthelongrun

(10years)

Acceptability:Whobearsthefinancialcostoftheremedyandwhetheritwill

commandindustrywidesupport.

Easeof

implementation:

How

quickly

the

remedy

could

be

implemented

and

the

extenttowhichitdoesnotdisruptexistingschemes.

Efficiency: Whetherthisremedymightrepresentthebestuseofresources.

Detailedscoringfortheabovemeasurescanbeseeninthemainbodyofthedocument.

Thefigurebelowsummarisesthedifferentoptionsalongthesimplifiedaxesof

effectiveness(includinglongtermsustainability)anddeliverability(intermsofcost,ease

ofimplementationandacceptability).


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TheLongListSummary

Thefigurebelowsummarisesthedifferentoptionsalongthesimplifiedaxesof

effectiveness(includinglongtermsustainability)anddeliverability(intermsofcost,ease

ofimplementationandacceptability).

Key:

1acreatingarequirementforcadetstoworkfortheshippingcompanytheyservedwithinasupernumerary

capacitywith

1bgreaterrelianceonotherexistingfundingschemesfortraining

1crequiringindividualstudentstobearthefullcostoftraining

2aimposinganobligationonshippingcompaniestotrainUKseafarers

2bintroducinganindustrywidelevyandgrantsystemtofundseafarertraining

2cintroducingtaxbreaksfortraining

2dmovingtowardsanapprenticeshipbasedmodelforUKseafarertraining

2e

fundamentally

revising

the

structure

of

UK

seafarer

training

3a2010SMarT

3b2011SMarT

Note:thepositioningoftheoptionbubblesisapproximateandillustrative

BasedonDeloittesandOEsunderstandingofthesector,individually,noneofthe


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TheShortList

Theanalysisbelowconsiderseachofthefiveoptionsintermsoftotalcosts,coststo

Government,benefits

and

thus

benefit:

cost

ratios

as

a

means

of

comparing

each

option.

Benefitassumptions

Asimplemeansofcalculatingtheeconomicbenefitofaseafarer,andalsoexseafarers,

trainedthroughSMarTistoassesstheproductivitydifferentialbetweentheaverage

workerinthemaritimesectorandtheUKproductivityaverageforallworkers.

Bythismethod,foreachyearinworkaSMarTbeneficiarygeneratesapproximately

14,500inadditionaloutputrelativetotheoutputofaUKworkerdisplayingaverage

productivity.

ByisolatingtheneteffectsofSMarTintermsofnumbersofcadetstrained,itispossible

tocalculatethenetbenefitstotheUKeconomyoveraworkinglife(assumingthatthis

productivitydifferentialholdsandaworkinglifeinthisrespectaverages20yearsabove

the810yearsspentatseabutlessthanastandardworkinglifeofover40years)

TheseareusedtogiveanindicationofbenefitsarisingfromSMarTand,inconjunction

withcosts,andindicationofValueforMoneyfortheindependentpanelandShipping

Ministertobasesubsequentanalysisanddecisionson.Fullresultsarepresentedinthe

mainbody

of

the

analysis

(page

102).


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Studentbearingfullcostoftraining

Thecostsofthisoptionarelikelytobesignificant,bothintermsofwhatstudentsare

requiredto

pay

as

well

as

potential

costs

to

Government

arising

from

non

collection

as

manyseafarersareatseaand,asresultnondomiciled,forextendedperiods,theyarenot

subjecttothetaxsystemandcollectionthroughPAYEmightnotbefeasible.

However,themainissuerelatingtothisfundingoptionisthemovefromapositionof

zerocosttostudents(adjustmentstosubsequentwagepaymentsnotwithstanding)to

fullcoststostudents.Thisislikelytomakeacareerasaseafarermuchlessenticingand

assuch,relativetotheotherpolicyoptionsavailable,thebenefittocostratioislikelyto

besignificantlylowerthanotheroptions.Thisapproachislikelytoexacerbatethe

demandand

supply

gap

of

UK

seafarers

demonstrated

in

this

study.

Levyandgrantsystem

Thiswouldinvolvetheidentificationofparticipantsandcollectionofgrantcontributions

thatwouldthenbepaidtoshippingcompaniesandotherorganisationsproviding

seafarertraining.Ascostsaresharedmorewidelythaninthestatusquo,thebenefitto

costratioforGovernmentsinitialoutlayishigh.

AmodifiedSMarTandanindustrylevyarenotmutuallyexclusive.Aswellasalevyand

grantsystem

in

isolation,

it

would

be

entirely

feasible

to

modify

the

components

of

SMarTandintroduceanelementofindustryfundingalongsideGovernmentfunding.

However,itshouldbenotedthatresearchsuggeststhattheintroductionofanewlevy

(regardlessofsizeandpurpose)couldworktodetershippingcompaniesandother

maritimecompaniesfromlocatingintheUK.Further,insomeinstancesalevycould

offsetbenefitsfromthetonnagetaxandcouldnotbeintroducedinisolation.

Insummary,alevywouldlikelymakeforamoreagreeabledistributionofcostsacrossthe

widermaritimesectorandsolvethefreeriderissue,althoughwenoteitmaynotbea

popularchoice

amongst

stakeholders

and

identification,

monitoring

and

collection

costs

couldbehigh.

SMarT

ThebenefitsfromcurrentSMarTprovisionhasbeenestimatedat58millionagainsta

costof30million(12millionofwhichcomesfromGovernment).Accordinglythe

benefit:costratioforGovernmentinputsishigherthanthetotalbenefit:costratio.

Increasedprovision(perthe2010originalSMarTfunding)wouldleadtogreaterbenefits

andhigher

benefit:

cost

ratios.

This

is

because

the

calculated

benefits

to

each

additional

UKtrainedseafareraregreaterthantheassociatedcosts.Withoutconsideringthefiscal

environment,theoptimalpolicysolutionwouldbetrainUKseafarerstothepointwhere

totaldemandforUKseafarersisfulfilledandgapsarezero.

Apprenticeshipscheme


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GiventhatseafarerscontributesignificantlytotheUKeconomy,andthatSMarThashad

apositiveupwardeffectonthenumberoftrainedcadets(c.200perannumabove

tonnagetaxinducedtraining),additionaltrainingislikelytobebeneficialtotheUK

economy.

Moreover,jobsthatcouldotherwisebetakenbycompetentoverseaslabouraremore

likelytobetakenbyUKcitizensanimportantconsiderationintermsofgenerating

employmentgrowthintheUKpercurrentpolicyimperatives.

Ifthecurrentfiscalsituationwasstronger,theargumentforincreasedGovernment

fundingofSMarT(orsimilar)wouldalsobestrongereachseafarertrainedislikelytobe

netbeneficialtotheUKeconomy.

However,given

the

current

situation,

and

the

analysis

above,

Deloitte

and

Oxford

EconomicsfeelthatthethreemainoptionsopentoGovernmentare:

1.AcontinuationofSMarTwhichcouldfeatureanincreaseinfundingbackto

2010levelsoramoretargetedprogrammetowardsofficers(given

substitutabilityatratingslevel)basedon2011fundinglevelseachwouldhelp

fillsomeofthegapoutlinedinthisstudy.

2.Theintroductionofalevyandgrantsystemunderwhichshippingcompanies,

Governmentand

third

party

beneficiaries

all

pay

a

more

equitable

share

of

trainingcosts,presumingassociatedissuescanbeovercome;and

3.Anapprenticeshipmodelifseparatediscussionsonthisbearfruit,

apprenticeshipscouldbeusedtoprovidethetrainingrequiredforUK

seafarers.

TheseviewsrepresentDeloitteandOxfordEconomicsconclusionsonthebasisofthe

availableevidenceandwithintheremitofthestudy.

Werecognise

that

opinion

may

differ

amongst

stakeholders

and

the

panel

reviewing

this

document,butunderstandthattheywillbringtheirownexperiencetobearonthe

recommendationtotheMinisterofShipping.


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2 Introduction2.1 Background

TheMinisterforShippingwishestoconductanindependentassessmentoftheeconomic

requirementforseafarertrainingintheUK.

Thisassessmentmustascertaintherequirementforseafarers,UKcitizenandforeign

born,bothonshipandonshore,andconsequentlytheneedfortrainingforthose

seafarers.

Theresearchshouldalsoconsidertheefficiencyandeffectivenessofasistrainingandthe

wayit

is

currently

funded,

before

laying

out

a

series

of

options

for

future

funding

provisiononthebasisprojectedtrainingrequirementsandbestpracticeforother

vocationaltrainingprogrammes.

Finally,theresearchwillthenbescrutinisedbyanindependentpanelthatwillselecta

preferredoptionfortheMinistertoconsider.

DeloitteandOxfordEconomics(OE)havebeencommissionedtoundertakethe

independentassessment.

2.2 ProjectScope

DfTstermsofreferenceforthestudyare:

toreviewtheUKrequirementfortrainedseafarersatseaoverthenextdecade;

toreviewtheUKrequirementfortrainedseafarersashoreoverthenextdecade;

toexaminetheextenttowhichtheaboverequirementshavetobemetbyUK

seafarers;

toreview

the

effectiveness

and

efficiency

of

the

existing

funding

arrangements

andthefutureneedforGovernmentinterventiontoensurethesupplyoftrained

seafarers;

toidentifyoptionsforsupportingthetrainingofseafarersandmake

recommendationswhichaddresstheissueofvalueformoneyandarereflective

offutureUKrequirementsfortrainedseafarers;and

toexaminewhetherprevioustrainingtargetsarereflectiveoffutureneeds.

Issuesoutsideofscope

ThefocusofthisindependentreviewhasbeentheeconomicrequirementforUKseafarer

training.However,itshouldbenotedthattheUKGovernmentprovideswidersupporttothe

UKmaritimesectorthroughmeasuressuchasthetonnagetaxandotherinvestment

incentives.Further,theEuropeanCommission(andindividualMemberStates)alsohasa


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presentsthefindingsfromanindustrywideconsultationonseafarertrainingin

theUK,includingtheresultsofaworkshop,panelmemberdiscussionsandan

onlinesurvey;

presentsforecastsontheexpectedsupplyanddemandforUKtrainedseafarers

andexseafarers;

containsanalysisofthemarketfailureandareviewofpo0tentialremedies;and

containsasetofrecommendationsandproposednextsteps.

ThisfinalreportalsocontainsmaterialpreviouslysubmittedtoDfTaspartofthereviews

interimreport.

2.4 Structureofthisdocument

Thisreportisstructuredasfollows:

Chapter3outlinesthereviewsmethodologicalapproachandactivities

undertakenbyDeloitteandOE;

Chapter4placesthereviewincontextbyprovidingafactualoverviewoftheUK

maritimesectorandtrainingarrangements;

Chapter5

draws

out

some

key

themes

from

the

literature

on

the

subject

of

seafarertraining;

Chapter6containsselectedinternationalcomparisonsofothercountries

approachestoseafarertraining;

Chapter7hasanoverviewoftheresultsofastakeholderconsultationexercise

carriedoutaspartofthisreview;

Chapter8presentsasummaryofthemodelledforecastsforseafarerdemand

andsupply;

Chapter9considerswhetherthereisanongoingrationaleforsupporting

seafarertrainingintheUKandhowalternativesupportmeasuresmightbe

assessed;and

Chapter10setsoutthefinalindependentrecommendationsofDeloitteandOE

answeringthereviewtermsofreference.

Furtherdetailsoftheassumptionsusedinthemodellingexerciseandabibliographyare

placedin

annexes.

2.5 Stakeholders

InadditiontoDfT,thereareanumberofotherstakeholdersgroupsintheUKmaritime

sector.AselectionofthesestakeholdersislistedoverleafinTable2.5.a.


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Stakeholdercategory Examples

Tradeunions NautilusInternational,UNITEandNationalUnionofRail,

Maritimeand

Transport

Workers

(RMT).

Professionalbodies InstituteofMaritimeEngineering,ScienceandTechnologyand

TheNauticalInstitute.

Maritimecollegesand

universities

InternationalAssociationofMaritimeInstitutions,Maritime

SkillsAllianceandtheAssociationofMarineElectronicand

RadioColleges.

Aspart

of

this

review,

a

number

of

these

stakeholders

were

invited

to

the

stakeholder

workshop1and/orweresentanonlinesurveytocompleteanddistributeamongsttheir

membership.


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3 Methodology3.1 Overview

AssetoutintheProjectInitiationDocument,DeloitteandOEhaveusedafivestage

methodologyproposedforthisreview.ThisfinalreportmarksthecompletionofStage5.

Figure3.1.a:Reviewmethodology

Thespecifictasksundertakenineachworkstageareexplainedintheremainderofthis

chapter.

3.2 PreparatoryStage

Duringthisstage,DeloitteandOEcompletedthefollowing:

attendedaninceptionandprogressmeetingwithDfT;

agreed

a

workshop

date,

location,

time

and

participant

list

with

DfT;

and

agreedadefinitionforUKseafarerswithDfT.

3.3 Stage1:InitialConsultationsandStudyDesign

Duringstageone,DeloitteandOE

h d d t d t d t t i i i i f di


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launchedanonlinesurveytocollatecomparabledatausingDeloitteDEXand

grantedaccesstorelevantstakeholdersonthebasisofemailsentby

membershiporganisationstotheirmembersapproximately115responses

werereceived;and

heldastakeholderworkshopattendedby16stakeholderorganisations,aswell

asrepresentativesfromDfT.

3.5 Stage3:EconomicModelling

Duringstagethree,OEdevelopedabespokemodelofthedemandandsupplyforUK

trainedseafarersandexseafarersto2020consistingof:

aview

on

the

future

realised

and

derived

demand

for

trained

seafarers

and

ex

seafarersfromthedemandformerchantshippingandthemaritimeclusterand

othermacroeconomicfactors;

aviewofthefuturesupplyofUKtrainedseafarersandexseafarersbasedon

currentseafarerstatisticsandstock/flowmodellingofpotentialindustryinflows

andoutflows;

aviewoncurrentvacancylevelsandskillsgaps(intandemwithqualitative

outputsfromDeloittesworkinstagetwo);and

baselineprojectionsandtwoscenariosaroundthisbaselinetotakeaccountof

alternativefutures(e.g.withrespecttointernationalflowsoflabour)

InkeepingwiththedefinitionstobeoutlinedinChapter4,themodelconsideredthe

distinctionbetween:

ratingsandofficers;

theshippingsectorandmaritimesector;and

UKandinternationalseafarers.

Theresultsoftheonlinesurvey,aswellasfurthercollectionofstatistics,wereusedto

calibratethemodelandgenerateforecasts.

3.6 Stage4Synthesis

Duringstagefour,DeloitteandOEcarriedthreetasksinlightoftheearlierresearch:

assessedmarketfailurewithrespecttothetrainingofUKseafarers;

assesseddemandandtraininggaps;and

assessedefficiencyandeffectivenessofpotentialremedies.

Theoutputsfromthisstagewereusedtoinformthefinalrecommendationsandprovide

anindependentviewandreasoningonthefollowingkeyresearchquestions:


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4 ReviewcontextThis

chapter

sets

out

the

context

to

this

review.

It

presents

some

descriptive

statistics

aboutthemaritimesectoringeneral,andtheshippingsectorandmaritimeclusterin

particular.Thelatterpartofthechapteroutlinesthecurrenttrainingregimeforseafarer

trainingintheUKandassociatedsupportschemes.

Thischapterisintendedtoactasaprimerforthoseunfamiliarwiththesectorand

seafarertraining.Forthosealreadywellacquaintedwiththeissues,thischaptercanbe

skipped.

4.1

The

UK

Maritime

Sector

TheUKmaritimesectorisverydiverse,coveringarangeofactivitiesandservices,beyond

shipping.Thesectorincludescommercialshipping,ports,maritimelegalandfinancial

services,leisureshipping,educationandtraining,commercialfishing,oilandgas,

defence,energy,conservation,manufacture,maritimetechnologiesandresearchand

agriculture.

WhilstsomemedianarrativeshavesuggestedthattheBritishmaritimesectorisindecline

duetowelldocumentedfallsinemploymentintheshipbuildingsectorandshipping

industries,it

remains

a

significant

contributor

to

the

UK

economy.

As

OE2

point

out,

the

industryisalargeremployerthanthegeneralmedicalpracticeindustryandmakesa

largercontributiontoUKGDPthancivilengineering.Thesectorisresponsiblefor1.8per

centoftotalUKemployment,1.9percentofUKGDPand1.6percentoftotal

governmentrevenue.

DataontheentireUKmaritimesectorisnotreadilyavailable.However,oneofthemost

recentstudiesbyOE3examiningtheeconomicimpactofthesectortotheUKsuggested

thatin2009thesector:

directlycreated227,000jobsandanadditional304,000jobsthroughindirect

andinducedeffects;

directlycontributed13.1billiontoUKGDPandanadditional13.4billion

throughindirectandinducedeffects;and

generated3.1billionintaxreceiptsfortheExchequerdirectlyandafurther

4.7billionthroughindirectandinducedeffects.

However,itshouldbenotedthattheabovedataonlyrefertothemaritimeservices

sector(definedasports,shippingandmaritimebusinessservices).Itdoesnotinclude

maritimeactivitiessuchastraining,oilandgas,defenceandmanufacturing,suggesting

theabovefiguresmayunderestimatethefullcontributionofthesector.

Forthepurposesofthisreview,thesectorissplitintotwosubsectors:

the shipping sector which covers the part of the maritime sector that is


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Source:http://www.marinetraffic.com/ais/,DeloitteAnalysis

Whilethereissomeoverlapbetweenthesesubsectors,withmanybusinessesoperating

inboth,stakeholdershavesuggestedthisisthemostcommonlyusedsplitandalignswith

thedefinitionofseafarersandexseafarers(seebelowandglossaryalso).

ContributionoftheshippingsectortotheUKeconomy

TheUKshippingsectorisakeyelementofthewidermaritimesector.Itisestimatedthat

90per

cent

of

the

UKs

visible

trade

is

transported

by

sea

(globally

ships

carry

77

per

cent

ofworldtrade)4

.

AsOEnote5theshippingsectorhas,ingeneral,enjoyedbuoyantgrowthoverthelast

decadefollowingtheintroductionofthetonnagetaxin2000.OEestimatethatthatthe

shippingsectoralonecontributedaround13billiontoUKGDP(direct,indirectand

inducedeffects)in2009comparedtonearly10billionin2007.In2009,thesector

supported268,000jobsandgenerated3.7billionintaxreceipts6

.AnearlierOEreport7

,

alsofoundthattheshippingsectorwasmoreproductivethanmanyotherindustries,

giventhe

finding

that

each

worker

within

it

produced

11.4

per

cent

more

GDP

than

the

averageworkerintheUKeconomy.

Thedeadweighttonnage(dwt)oftradingshipsontheUKregisterwas17.3milliondwtin

2009,representinganincreaseof531percentfromthe1991figureof2.7milliondwt.

TheUKregisteredtradingfleettotalled701shipsin2009.However,shipsontheUK

registerarenotnecessarilyownedbyUKinterestsandviceversa.

In2009,UKcompaniesdirectlyowned21.5milliondwtandhadacontrollinginterestin

35.5milliondwt.Inaddition,UKcompaniesmanaged64.4milliondwt.Thetotalworld

tonnageoftradingvesselsin2009reached1,249milliontonnes8

.AccordingtoUNCTAD9

statistics,theUKisranked13outof35flagsofregistrationonJanuary2010byshareof

worldtonnage(ithas1.39percentofworlddwt).However,itisinstructivetonotethat

thisfigurerepresentsanincreaseofover11percentfrom2009.

TheUK,andEuropemorewidely,remainmajorcentresofshippingtraffic.Figure4.1.b
http://www.marinetraffic.com/ais/http://www.marinetraffic.com/ais/


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locationatthistime.Fromthissnapshot10

,itisclearthatEuroperemainsamajorglobal

hubwiththemosttrafficpassingthrough.

Figure4.1.b:

World

sea

freight

traffic,

September

2011

Source: www.marinetraffic.com/ais/;DeloitteAnalysis

WithinEuropeitself,oneisabletoseelargetrafficflowsthroughUKports.AsEuropeis

importantinaglobalshippingcontext,likewisetheUKappearsveryimportanttothe

Europeanshippingtrade(andthereforeglobalshippingtrade)ifonelooksattrafficalone.

Forexample,a2010reportbyMarisec,showsthatnineoutofthetop20nationsinterms

ofmillionsofgrosstonnesofshippingareinEurope.TheUKranksfifthamongstthese

ninenations.

TheUKshippingindustryissubjecttoanumberofregulationsandpiecesoflegislation

fromanumberofsources.Theseinclude:

VariousUnitedNationsagenciessuchastheInternationalMaritime

OrganisationandInternationalLabourOrganisation:Forexample,compliance

withtheILOs2006MaritimeLabourConvention(MLC)11

whichprovides

comprehensiverightsandprotectionatworkfortheworldsseafarers;

Europeanmaritimelegislation:Forexample,compliancewithEUmaritime

safetystandardslegislation;and

UKlegislation:Forexample,theminimumtrainingobligationaspartofthe

tonnagetaxregimerequiringcompaniestotrainoneofficertraineeforeach15

officerpostsinexistenceonthevesselitoperates.

The Maritime and Coastguard Agency (MCA) an executive agency of DfT is responsible
http://www.marinetraffic.com/ais/http://www.marinetraffic.com/ais/


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Dataisnotavailableforalltheelementsthatmakeupthemaritimecluster.However,OE

haverecentlyestimatedthecontributionsoftheportsindustryandmaritimebusiness

servicessectoras:

theportsindustrycontributing16.9billiontoUKGDP,supporting337,000jobs

andraisingover5.7billionintaxrevenue;and

themaritimebusinesssector,centredintheCityofLondon,contributing3.8

billiontoUKGDP,supporting68,000jobsandraising1.4billionintaxrevenue.

In2009,UKportshandledover500milliontonnesoffreighttraffic(morethananyother

Europeancountry),althoughsince1999domestictraffichasfallenby26percent12

.

4.2 Seafarersand

ex

seafarers

Seafarersarethoseindividualswhopredominatelyworkatsea.Theyaretypicallyfound

intheshipping,oilandgasandleisureshippingsegmentsofthemaritimesector.Upon

leavingtheshippingsector,exseafarersoftenmoveonshoretoworkinthemaritime

clusterorgoontoworkinthewidereconomyinaroleunrelatedtothemaritimesector.

Seafarerscanbecategorisedas:

Officers:whoaremembersoftheshipsmanagement.Officerstypicallyworkin

twodepartments

navigation

(deck)

and

engineering.

Whilst

on

duty

(called

a

watch),aDeckOfficerisresponsibleforsteeringandmanoeuvringtheship,

controllingnavigationandcommunications.EngineeringOfficersareresponsible

foroperatingandmaintainingmechanicalandelectricalequipmentthroughout

theship.

Ratings:areseafarerswhoassistOfficersacrossalldepartments.

NewlyqualifiedDeckOfficersjoinattherankofOOWDeckOfficersandcanprogressto

becomeChiefMate/OfficerandfinallyMaster.EngineeringOfficersbeginasOOW

Engineering,moving

to

2nd

Engineer

and

then

Chief

Engineer.

Rankings

for

ratings

vary

by

DeckandEngineeringandincludeThirdMate,Bosun,AbleandOrdinarySeaman.

ThefigurebelowchartsthenumberofUKnationalseafarersactiveatsea.

Figure4.2.a:NumberofUKnationalseafarersactiveatsea,20022010*


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cent.Onereasongivenforthisdeclineistheinsufficientnumberofnewentrantscoming

toseafaring(seechapter5),althoughthenumberofofficertrainees(cadets)has

increasedsince2002.Asecondreasongivenforthedeclineinactiveseafarershasbeen

themove

by

many

certificated

officers

onshore

to

work

in

the

maritime

cluster.

Accordingly,theyarenotcurrentlyatseaandhencedonotappearintheabovestatistics.

Datareceivedfromtheonlinesurveyconductedaspartofthisreviewsuggeststhatless

than25percentofcadetswhobegintrainingfortheCoCfailtocompletethe

qualification,suggestingthatthemajorityofthecurrentcohortofcadetswillgoonto

becomeofficers.

OneconsequenceofthedeclineinUKseafarernumbershasbeenanageingofthe

stock

of

seafarers.

As

the

number

of

new,

younger

seafarers

entering

the

active

stock

of

seafarersislessthanthoseleaving,theageprofileofallseafarershasbeengettingolder.

AsFigure4.2.bbelowshows,twothirdsofUKcertificatedactiveofficersareover40

yearsold.

Figure4.2.b:AgeprofileforCertificatedOfficersandRatings,2010

Source:DfT/NationalStatistics UKSeafarerStatistics 2010

The2010ManpowerUpdate14

providessomeglobalcontexttothedemandandsupply

forseafarers.Thereportindicatesthatthereisaslight(2percent)shortageofofficers

globally.However,thisshortageismoreacuteinspecialisedareassuchastankers.

Interestingly,demandforseafarershascontinuedtogrowinaglobalcontextinspiteof

therecession.Crucially,itishighlightedthattheshortageisexpectedtopersist(eveninaconservativelevelofdemandgrowthscenario)unlessmaritimetrainingisincreased

andmeasuresaretakentoreducewastagerates.

Chapter8containsthisreviewsestimatesoffuturedemandandsupplyforseafarers

basedonnewresearchandstakeholderconsultations.


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Table4.2.a:Annualnetsalaryperofficerrank

Rank Containers Tankers Offshoresupplyvessels

Master

54,331

59,925

55,165

ChiefEngineer 51,077 56,393 51,379

SecondEngineer 41,000 45,695 44,036

AveragePay 48,803 54,004 50,193

Source:Deloitte/OEAnalysison2011paydataprovidedbyNautilusInternational

From2011paydataprovidedbyNautilusInternationalonselectedshippingcompanies

holdingagreements

with

the

union

in

the

container,

tanker

and

offshore

supply

vessel

sectors,DeloitteandOEanalysisshowsbywayofanexamplethatofficersofdifferent

rankswhoworkaboardtankersreceivedthehighestaveragesalaryofc.54,00016

this

mayreflecttheaforementionedshortageofofficersontankers.

Incomparison,seafarersaboardsupplyvesselsandcontainersreceivedaloweraverage

salary(50,193and48,803respectively).Whilstthesefiguresaremeanaveragesand

maybebiasedupwardsordownwards,theycomparefavourablywithmeanUKaverage

salaryofc.24,00017

.

Thisdata

also

shows

that

seafarer

pay

has

increased

in

the

last

three

years

across

all

categorieswithintheshippingindustry18

.Theofficerswhoreceivedthehighestgrowthin

payoverthethreeyearswerethosewhoworkedaboardsupplyvessels,atarateof3.9

percent,althoughtheseofficersalsoreceivedthelowestnumberofleavedays 183days

ofleavep.a.Annualpayforseafarersaboardcontainersgrewtheleastoverthepast

threeyearsatarateof2.2percent althoughseafarerswithinthiscategoryreceive233

daysofleavep.a.,thegreatestamongstthefourcategories.

Datahasnotbeenavailableonannualsalariesofratingsorexseafarers.

4.3 Seafarertraining

Traditionally,seafarertrainingintheUKfollowedaninformalsystemofapprenticeships

wherebytraineesorcadetswereattachedto,andworkedwith,mastermarinersand

chiefengineerstoacquireskillsandexperience.Recentchangesnotwithstanding,the

currenttrainingstructureforbothratingsandofficersmaintainsthebasicapprenticeship

styleformat,withshippingcompaniesplayingasignificantroleinthetrainingofcadets19

.

Uponcompletionoftraining,cadetsreceivebothanacademicqualificationanda

professionalqualificationand,incontrasttoothercountriesseafarertraining

programmes,theUKseafarertrainingsystemallowsstudentstoimmediatelyenterintoa

definedprofession(seeChapter6forinternationalcomparisons).Thecombinationof

practicalandacademictrainingmeansseafarertrainingissimilartoothersandwich

coursesthatcombineworkexperiencewithclassroombasedstudy.

Therearecertainminimumstandardsthatallpotentialseafarersmustmeetbefore


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The1978InternationalConventiononStandardsofTraining,Certificationand

WatchkeepingforSeafarers(STCW)adoptedbytheInternationalMaritimeOrganisation

(IMO),asamendedin1995istheprimaryinfluenceonseafarersstandardsinthe

MerchantNavy20.

124

of

the

192

countries

are

signatories

to

the

convention,

meaning

that,withonlylimitedexceptions,allprofessionalseafarersaroundtheworldmusthold

certificatesthatareSTCWcompliant.

Individualcountriesareresponsibleforensuringtheirnationaltrainingschemesare

compliant.IntheUK,theMCAisresponsibleforensuringtheprovisionsofSTCWare

compliedwith.IthasdevelopedasuiteofNationalOccupationalStandards(NOS)thatare

consistentwithSTCW.

Certificates

of

Competency

(CoCs)

are

issued

to

those

seafarers

who

meet

these

requirements.TherearemultipleCoCscoveringthedifferentcrewdutiesandofficer

ranks.BroadlyspeakingthesedividebetweendeckdepartmentCoCs,engineeringCoCs

andWatchRatings.ACoCisvalidforfiveyears,unlessotherwisestated21

.Eachmaster,

officerandradiooperatorintendingtoserveatseamustrevalidatethecertificateatleast

onceeveryfiveyears.WatchRatingcertificatesdonothaveanexpirydateanddonot

needtoberevalidatedeveryfiveyears.

Asnotedabove,basedontheonlinesurvey,aroundaquarterofcadetsfailtocomplete

their

CoC.

Data

from

the

online

survey

suggests

that

75

per

cent

or

more

trainees

who

completedtheirfirstCoCwentontoworkwiththeshippingcompanytheyhadtrained

with.However,itshouldbenotedthatthemajorityofshippingcompaniesdidnot

guaranteeajobuponcompletion.ThisisconsistentwithasurveybyNautilus

Internationalin2010ofcadetswhichfound75percentofcadetsoptimisticaboutfuture

careerandemploymentprospects22

.

OfficerscanonlyserveonaUKshipiftheyholdaUKCoCoraUKCertificateofEquivalent

Competency(CEC).ACECisissuedbytheMCA,allowingseafarerstoworkasofficerson

UKregisteredships.Anequivalentprocessapplies(asprovidedforunderSTCW)forUK

seafarerswishingtoworkonforeignshipstheywillneedtoapplyforaCECwiththe

relevantmaritimeauthorityofthecountrywheretheshipisregistered.

Figure4.3.abelowshowsthenumberofUKCECscurrentlyinissueandthenationalityof

thoseofficersholdingthem.

20ChangestotheconventionwereadoptedinJune2010(knownastheManilaamendments)thatwillcomeinto

forcefrom

January

2012.

Among

the

most

relevant

changes

to

this

review

were:

Improvedmeasurestopreventfraudulentpracticesassociatedwithcertificatesofcompetencyand

strengthentheevaluationprocess(monitoringofParties'compliancewiththeConvention);

Revisedrequirementsonhoursofworkandrestandnewrequirementsforthepreventionofdrugand

alcoholabuse,aswellasupdatedstandardsrelatingtomedicalfitnessstandardsforseafarers;

Newcertificationrequirementsforableseafarers;


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Figure4.3.a:NationalityofnonUKofficersholdingCEC,2010*

Source:DfT/NationalStatisticsUKSeafarerStatistics 2010

*ThesearenonUKnationalsholdingequivalencycertificatesrequiredtoserveonaUKregisteredship.Notall

willbeworkingonUKshipshowever.

MoredetailsaboutOfficerandRatingtrainingroutesareprovidedbelow.

Officertraining

ThemodernofficertrainingprogrammeintheUKcomprisesoftimespentatseaand

timespentonshoreatanauticalcollege.Traininginvolvesdevelopingamasteryofa

rangeoftraditionalseafaringskillssuchasnavigation,seamanshipandshipstability.In

addition,deckofficersstudycoursesinIT,businessandlaw,whilstengineeringofficers

studymarineengineeringprinciples,thermodynamics,shipconstructionandelectrics.

Themainentryroutestobecominganofficerareshownbelow.

Figure4.3.b:Officerentryroutesandqualifications


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Ratingtraining

Unlikeofficertraining,therearenominimumacademicqualificationsforratings

qualifications,

although

potential

ratings

must

meet

medical

and

eyesight

requirements.

However,thatnotwithstanding,potentialratingsusuallyneedtopossesthree

GCSEs/ScottishStandardGradesbetweenGradeA*andD.

CandidatesstudyingtobecomeDeckRatingsundertakesafetyandprofessionaltraining,

coupledwithseatime,toobtainaNavigationalWatchRatingcertificate(RatingGrade2).

TheycanthenprogresstobecomeaGrade1DeckRatingandmayobtainanAble

SeamansCertificationfollowingcompletionoftheEfficientDeckHandCertificate,the

ProficiencyinSurvivalCraft&RescueBoatscertificateandfurtherseaservice.

EngineeringRatings

study

for

the

Engine

Room

Watch

Rating

Certificate.

Other

Ratings

in

specialistroles,suchasthoseservingontankerships,arerequiredtohaveadditional

trainingandvocationalqualifications.

CateringRatingqualificationsarethoseassociatedwithfoodpreparation,cookingand

serving.CookscanobtaintheMCACertificateofCompetencyasShip'sCookandother

ratingsmayobtainsuitablequalificationsissuedbythecateringindustryingeneral.

Seafarertrainingproviders

TheMerchant

Navy

Training

Board

lists

around

15

institutions

that

offer

seafarer

education,trainingprogrammesandcoursesleadingtoanOOWCoC23

.Theseinclude

dedicatedmaritimecollegesaswellasuniversitieswithatraditionofmaritimetraining

andresearch.Thereareover300trainingcentresintheUKwhichhaveMCAapprovalto

delivervariousformsoftrainingcourses.Anumberoftheseinstitutionsarealsorunfor

profit.

SMarTfundingispaidtothetrainingproviderunderSMarT,atrainingproviderisa

sponsoringcompany(usuallytheshippingcompany).

4.4 SupportforseafarertrainingintheUK

TheUKGovernmenthashistoricallyprovidedsupportforseafarertrainingintheUK.

PreviouslysupportforUKseafarershadbeenprovidedthroughGAFTSandDOCS.

Bythe1990sthedeclineinthemaritimeskillsbasehadbecomecriticalandmanywere

arguingforGovernmentintervention.Afterassessingthesituation,theGovernment

adopteditsfirstevercomprehensivepolicyforshippingoutlinedintheGovernment

WhitePaperBritishShipping:ChartingaNewCoursein1998.Itisthispolicywhichlaid

theground

for

the

main

instruments

for

the

recovery

of

shipping

one

of

which

was

the

SMarT(SupportforMaritimeTraining)scheme.

ThefocusofthisreviewisprimarilyonSMarTandaccordinglyothersupportmechanisms

forseafarertraining,andthemaritimesectormoregenerally,arenotdescribedindetail.

Nonetheless,itisimportanttoplaceSMarTinthecontextofwiderinitiativesdesignedto

promote the UK shipping sector and maritime cluster Other initiatives include the


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maybeprohibitiveformanypotentialcadetsandshippingcompaniesmayfacea

disincentivetocommittothiscostiftheyfearcadetswillnotstaywiththempost

completionchoosinginstead,togotoanotherareaofthemaritimesectorwhichpays

more(what

is

known

as

the

free

rider

issue

in

economics).

Hence,

there

is

often

a

role

forgovernmenttoplaytocorrectforthismarketfailure.

Accordingly,theaimofSMarTistoprovidegovernmentfundingfortherecruitmentand

trainingofcadetsintheUKand,asaresult,increasethenumberofofficertrainees,

whichinturnbenefitsthewholesector.

ItshouldbenotedherethattheoriginalaimofSMarTwasnotjustcadets.Thescheme

wasoriginallydividedintofivedifferentcategorieswiththeobjectiveofcoveringthe

training

process

in

full.

This

included

recruitment,

training

and

funding

of

cadet

programmesandalsocoveringallpossiblepathsofseafarersskilldevelopment.The

schemeprovidesupto50percentofactualtrainingcoststoemployers.Unlikeother

vocationaltrainingschemes,SMarTfundingisprovidedtoemployerstosupportexisting

employees,ratherthanbeingdirectedattheunemployed25

.

SMarTisadministeredbytheMarineTechnologySupportUnit(MaTSU),whichitselfisan

independentunitofAEATechnologyplc.MaTSUactsasanAdministeringBody(AB)in

accordancewithcontractspecifications.AlthoughSMarTisadministeredbyMaTSUfor

thepaymentoffunds,itistheMCAwhichmanagestheschemeandholdsthebudget

TherearefiveSMarTprogrammeswhichareapprovedbytheMNTBandMCA.

SMarT1:thisiswherethebulkoffundingisdirected.Itisfortraineesservingin

asupernumerarycapacity(i.e.theyarenotregularactivemembersofthecrew

duringtraining)andinvolvesfollowinganapprovedprogrammeoftraining

leadingtoafirstcertificateofcompetencyasadeck,engineerordualofficer.

CompletionofthistrainingleadstotraineesreceivingtheirfirstSTCWCertificate

ofCompetency.

SMarT2:thisisforjuniorofficertraineesandleadstoasecondSTCWcertificate

ofcompetencythisisshorebased.

SMarT3:isforratings,officersandotherexperiencedseafarersfollowingan

approvedshorebasedprogrammelasting52weeksorless.

SMarT4:isforofficersalreadyholdingcertificatesofcompetence.They

undertakeshorebasedtrainingtorevalidatetheircertificatestomeetthe

requirementsofSTCW95.ThiscategorywasscheduledtocloseinJuly2002,asit

wasexpected

that

all

officers

would

have

re

validated

their

certificates

by

this

date.

SMarT5:isforratingsandexperiencedseafarersundertakingapprovedtraining

leading(morethan52weeks)tospecifiedlevel2VocationalQualification(such

asapprenticeships)andservinginasupernumerarycapacity.Italsoappliesto

f h l l l d h d f


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beabletoprovideandmonitorthetrainingopportunitiesnecessaryfortrainees

tomeettherequirementsoftherelevantapprovedtrainingprogrammesleading

toaUKCertificateofCompetency.

TobeeligibleforpaymentunderSMarT,traineeshaveto:

beanationalofaMemberStateoftheEEA;

ordinarilyresidentintheUK;

proficientinspokenandwrittenEnglish;and

sponsoredbyatrainingprovider.

UnderSMarT,

Training

providers

are

typically

shipping

companies

themselves

(sometimes

inconsortia).

TheSMarTschemehasbeenapprovedbytheEuropeanCommissiontocomplywithState

aidguidelinesunderArticle107(3)(c)TFEU26,firstin1998andthenagainin2004(when

SMarT5wasintroduced).

Inits2004clearanceofSMarT,theECnotedtherationalefortheschemeasaddressing:

thecontinuingseriousshortfallinofficerrecruitment;

afalling

proportion

of

cadets

continuing

to

second

certificate

training;

areportedhighdropoutrateduringofficertraining(asmuchas25%);

theaboveaverageageprofileamongsttheUKofficerpopulation;

lownumbersofratingsprogressingtoofficerqualifications;

increasingdemandforhighlyskilledratingsand

decliningopportunitiesforunskilledratings.

TheECsclearanceisbasedonthesupernumerarySMarTschememeetingthegeneral

criteriaofbeingproportional,nondiscriminatoryandtransparentand,where

appropriate,relatingtotrainingcarriedoutonboardshipsenteredinaCommunity

register.

ThefinancialcostofSMarTtoGovernmentvariesbetweenitsdifferentlevels.Thetotal

supportavailableforUKseafarertrainingwasrecentlyrevised12millionforthe

financialyear20111227

.Figure4.4.achartsthetotalcostofSMarTsinceitsintroduction.

Figure4.4.a:

Annual

cost

of

SMarT


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Source:DFT

Totalannualfundingrosefrom7.5millionin20012toapeakof15.6millionin2010

11,beforefallingto12millionfor201112.Intermsofcumulativespend,atotalof110

millionhasbeenspenttosupportUKseafarertrainingthroughSMarT.

Figure4.4.bbelowshowsthenumberofnewcadetsstartingunderSMarT1since1999.

Figure4.4.b:

Officer

trainee

starts

under

SMarT,

1999

2010

Source:DfT/NationalStatisticsUKSeafarerStatistics2010

Datafrom

the

online

survey

shows

that

around

half

of

all

shipping

companies

received

SMarTfundingforalloftheircadets,withfundingtypicallycoveringbetween25and50

percentofthetotalcostoftraining.

OnthebasisofamoregeneralquestionondropoutratesfromCoCcourses(irrespective

offundingsource),itwouldbereasonabletoassumethedropoutratesfromSMarT

funded cadets is also less than 25 per cent over a three year period though it is not


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On12December2010ParliamentaryUnderSecretaryofStateforTransport(Mike

PenningMP)announcedapackageofmeasuresrelatingtothemaritimeindustry

followingtheSpendingReview.WithregardstotheSMarTscheme,MCAmaintainedthe

programmewith

12million

allocated

for

the

financial

year

2011

12.

The

majority

of

this

moneywouldbefocusedonsupportinginitialtrainingforcadetsstudyingatjuniorofficer

level(SMarT1).MCAestimatesthatthefundingwillallowforthetrainingofupto1,000

newcadets.MrPenningalsoconfirmedthatfundingwillbeavailablebeyondnextyear

forallcadetsstartingSMarT1trainingin2011/12,andthosealreadyundergoingSMarT1

training,forthedurationoftheirstudiestotheirOfficeroftheWatchCoC.

Inaddition,itwasconfirmedthatfundingwouldremainavailablein201112forratings

trainingandforratingstoofficerconversiontraining,aswellassomefundingtosupport

thefirst

instalment

of

SMarT

2.

However,

for

the

remaining

parts

of

the

SMarT

programme,includingSMarT2trainingbeyondthefirstinstalment,theGovernment

confirmedthatitspositionwasthat,undercurrentcircumstances,itismoreappropriate

thatthecostofthisadditionaltrainingshouldbemetinfullbyemployers.

TheDfTalsonotedthatitwouldbeconsideringthecontinuingrationaleforGovernment

supportformaritimetrainingandskillsdevelopment.Asaresult,nonewtraining

providerswouldbeallowedtojoinSMarT,whichalsoincludesjoininganexisting

consortium.

Othersupportschemesforseafarertraining

AswellasSMarTthereareanumberofotherschemesforseafarertrainingintheUK.

TwoexamplesarethoserunbyTrinityHouseandMaritimeLondon.

Figure4.4.c:TrinityHouseMerchantNavyScholarshipScheme

TrinityHouseistheGeneralLighthouseAuthority(GLA)forEnglandandWales.Incorporated

byRoyalCharterin1514,TrinityHouseisalsoamajormaritimecharity,whollyfundedbyits

endowments.The

Corporation

spends

around

4m

each

year

on

its

charitable

activities

includingwelfareofmariners,educationandtraining(throughascholarshipscheme),andthe

promotionofsafetyatsea.

TheTrinityHouseMerchantNavyScholarshipSchemeprovidesfinancialsupportforyoung

peopleseekingcareersasofficersintheMerchantNavy.Cadetsmust;

bebetween16and18yearsoldwithaminimumof5GCSEsatGradeCorbetter,

andmusthavepassedtheDepartmentofTransportmedicalexamination.Theymust

alsobeBritishandpermanentlyresidentintheBritishIsles;and

undertakea

three

or

four

year

programme

split

between

nautical

college

and

time

at

seainavarietyofBritishmanagedvessels.CadetscantrainaseitherDeckor

EngineerOfficersorpursueaMarineCadetshipencompassingbothdisciplines.

Figure4.4.d:MaritimeLondonOfficerCadetScholarship


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contributortotheUKeconomy.TheUKremainsamajorshippingcentreglobally,andits

maritimeclusteriswidelyacknowledgedasbeingbestinclass.

One

of

the

factors

contributing

to

the

sectors

contribution

is

a

well

regarded

training

programmeforseafarers.Thistrainingcombinesclassroombasedlearninganda

significantelementofatseaexperience.

Inresponsetoadeclineinthemaritimeskillsbased,theUKGovernmentintroduced

SMarTasamechanismtosupportandpromoteseafarertraining.Theschemesoughtto

remedythemarketfailurewherebythosecompaniesthatfinancedcadettrainingdidnot

alwayscapturethefullbenefitoftheirinvestment.Sinceitsintroduction,thenumberof

traineecadetshassteadilyincreasedreachingc.850newstartersin2010.

Dueto

wider

macroeconomic

pressures,

the

SMarT

scheme

is

being

re

examined

in

light

ofthecontinuingeconomicrequirementforseafarertrainingintheUK.


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5 Keythemesemergingfromthe

literaturereview

Theissueofseafarertraininghasbeenexaminedbyanumberofresearchersand

policymakers.Awealthofmaterialwasproducedaroundtheintroductionofthetonnage

taxintheUKandsubsequentresearchhassoughttoexamineandexplaintrendsinUK

seafarernumbers.Thischaptersummarisesthekeythemesemergingfromtheliterature

thatwillinformtherecommendationsofthereview.

Thisliteraturereviewhascoveredacademicjournals,previousreportsandspecialistand

generalpress

articles.

It

is

not

an

exhaustive

review

of

the

literature,

rather

focusing

on

keythemesarisingfromit.

5.1 Context

Oneofthekeymotivatorsfortheliteratureonseafarersandseafarertrainingwasthe

1998WhitePaper,BritishShipping:Chartinganewcourse.

Figure5.1.a:SummaryofBritishShipping:Chartinganewcourse

BritishShipping:

Charting

anew

course

(1998)

Bythe1990sthedeclineinthemaritimeskillsbasehadbecomecriticalandmanyarguedthat

thisrequiredeffectiveandimmediateattention(e.g.ObandoRojasetal,1999;Selkouand

Roe,2002).Worriesthatthedeclinewashavinganegativeimpactonthemaritimecluster

promptedthegovernmenttointervene.TheGovernmentsoughttobringtogethermaritime

stakeholdersinordertofindawayofreversingthesituation.Aftersomedeliberation,the

governmentadopteditsfirstevercomprehensivepolicyforshippingoutlinedinthe

governmentWhitePaperBritishShipping:ChartingaNewCoursein1998.

Under

the

backing

of

John

Prescott,

then

Secretary

of

State

for

the

Environment,

Transport

andtheRegions,theWhitePaperraisedmanyissuesandpolicysuggestionsthatstillremain

highlyrelevanttoday.ThefourcentralaimsofpolicyidentifiedbytheWhitePaperwere

increasingskills,encouragingemployment,increasingtheUKsattractivenesstoshipping

enterprisesandgainingsafetyandenvironmentalbenefits.

TheWhitePaperemphasisedtheshippingindustryasbeingoneofparticularimportanceto

theUK.Thiswasbasedonourdependenceonseatransport,thesustainabilityintermsofthe

environmentshippingoffers,theneedformaritimeskillsinoffshoreindustriesandforreasons

ofnationalsecurity.Itwouldbefairtosaythattheretheindustrystillholdsthesepotential

advantages

for

the

UK.

Similartotheissuesfacedtoday,theerosionoftheindustryintermsofbothregisteredflagsin

theUKandtheskillspoolofUKseafarerswasattributedtoamultitudeoffactors.Suchfactors

includechangesinthepatternoftrade,globalisation,lowwageforeigncompetitionanda

declineininterestamongstyoungpeopleintheUKshippingindustry.Ascanbeseeninthe

literaturereview,manyofthesefactorscontinuetoresonateatleastasmuch,ifnotmore


38/125

wellasdirectlyrespondingtotheissuesraisedintheWhitePaper,thisliteraturehasalso

examinedseafaringandmaritimeissuesinthelightofwidereconomicandsocialtrends,

suchasglobalisation,securityissuesandmigration.Aswellasacademicresearch,during

thisperiod,

policymakers

such

as

the

European

Commission

have

also

published

position

papersonseafaringandthemaritimesector.

Forthepurposesofthisreview,thekeythemesfoundincontemporaryliteratureofthe

lasttenyearsthataremostrelevanttoseafarertrainingandSMarTarepresented.Much

oftheliteraturehasnotfocusedonseafarertrainingandSMarTinisolation,preferringto

considertheirimpactinconjunctionwiththetonnagetax.

DeloitteandOEhaveidentifiedthefollowingthreekeythemesarisingintheliterature:

reasonsproposed

for

the

decline

in

the

number

of

UK

seafarers;

therelativeattractivenessofonshoreworktooffshorework;and

thecaseforhavingtrainedseafarersfromdevelopedmarkets.

Theseissuesarediscussedinmoredepthbelow.

5.2 ThedeclineinthenumberofUKseafarers

Asdiscussedinthepreviouschapter,oneoftheaimsofGovernmentsupportforthe

maritimesector

has

been

to

expand

the

skills

base

through

the

provision

of

more

trained

seafarers.Thiscanrefertobothofficersandratings.Theliteraturehastendedtoconfirm

thattoofewseafarersarebeingtrainedintheUK.Forexample,Lewarn(2009)29

notes,

thereisthefeelingthatannualintakesofratingshavebeeninsufficienttoprovideforthe

requiredmaritimeskillsbase.

ThisisnotjustaUKrelatedphenomenonbuthasalsobeenexperiencedbymuchofthe

EU.ThereportoftheTaskForceonMaritimeEmploymentandCompetitivenessand

PolicyRecommendationstotheEuropeanCommission(June2011)30

foundthattherehas

beena

trend

increase

in

the

recruitment

of

non

EU

seafarers

at

the

expense

of

EU

ratings.Europeanofficerrecruitmentandretentionalsoremainsproblematic,thoughthis

hasbeenmaskedduetotheuseofpersonnelfromthenewMemberStates.

FocusingspecificallyontheUK,theliteraturehasproposedanumberofreasonsto

explainthedeclineinseafarernumbersinspiteofSMarT.Theseinclude:

globalcompetitionforseafarers;

unattractivenessoftheshippingindustryandmaritimesectorforyoungpeople;

retainingexistingseafarers;and

Ahighdropoutrateamongstcadets.

Thefirstreasoncanbecategorisedasademandsideexplanationforthedecline,whereas

theotherthreereasonscanbethoughtofassupplysideexplanations.Theliterature


39/125

simpleasshippingcompanieschoosingtoemploynonEUseafarersoverUKandEU

seafarersforcostreasons.EvidenceofthiscanbefoundintheUKunionsbackingforan

amendmenttotheEmploymentBillof2008whichhighlightedthatissuethatthenational

minimumwage

was

not

being

applied

to

foreign

seafarers

31

.

Accordingtoa2005BIMCO/ISFManpowerSurvey,only25percentoftheglobalsupply

ofseafarerscamefromthedevelopedworld/OECDwhilsttherestwasmadeupof

seafarersfromEasternEurope,Africa,LatinAmerica,theFarEastandtheIndian

Subcontinent.

ThistrendissupportedintheanalysisofPettit,Gardneretal(2004)32

whoassertthatas

theshippingindustryhasadaptedtothegloballabourmarket,theUKhasincreasingly

employedforeignseafarers.Thishasinturnledtoasignificantdecreaseinthenumberof

UKnationalstrainingasseafarercadets.ItissuggestedthattheuseofforeigncrewsbyBritishshipownersreducesthetrainingpotentialbyreducingthenumberoftraining

sponsors.

Effectivelyshippingcompaniesareonlyincentivisedtoinvestfullyintrainingandcareer

developmentiftheythemselveshavealongterminterestandcommitmenttothehost

country.AnecdotalevidencecitedsuggestsfirmswithsuchcommitmentintheUKare

fewandfarbetweenandthereforethepriorityistoemploycheaplabourwhichisin

greaterabundancefromtheemergingmarkets.

ReflectingtheinfluenceofglobalisationonthemarketforUKseafarers,thepolicy

implicationdrawnbytheliteratureisthattargetedattentionneedstobegiventothe

demandsideofthemarket.WhileSMarTisdesignedtoimprovethetrainingand

recruitmentofseafarers,Gekara(2008)cautionsthatsuchapolicywillnotachieveitsfull

potentialifthereisalackofdemandfromshippingcompanies.IfUKofficersaremore

expensiveincomparisontotheirforeigncounterparts,unlessthereisaclearquality

premium,shippingcompanieswillfaceincentivestoemploynonUKseafarers.Thus,

therepotentiallyexistsatensionbetweenemployerswhowishtoreducecostsby

employingcheap

foreign

seafarers

and

the

Government,

who

wish

to

boost

growth

in

the

nationalskillsbase.

Attractingyoungpeopleandretainingexistingseafarers

Theliteraturenotesthatinrecentyears,theshippingindustry,andthemaritimesector

moregenerally,hasstruggledtoattractyoungpeoplefromtheUK.Theimpactofthis

phenomenonisthatasolderseafarerstransitiontobecomingexseafarers(eitherby

movingonshoreorretiring),theyarenotreplacedbyyoungerseafarersfromtheUK.

Botheconomic

and

sociological

explanations

have

been

offered

to

account

for

this

lack

of

supplyofUKseafarers.Oneofthemostcitiedreasonsisignoranceofseafaringasa

careerbyyoungpeopleandthedeclineinthecostoftravel.ArecentECreport33

argues

that,unlikeinthepast,thefallingcostofglobaltravelcoupledwithshortertimespent

onshorewheninporthasmeantseafaringisnolongertheonlywayforyoungpeopleto

see the world


40/125

supplymerchantnavyofficers.Thisisperhapssomewhatsurprisinggiventherelatively

favourablepayconditionscomparedtootherprofessions.

However,theviewthatthereislowawarenessofseafaringisnotuncontested.Many

trainingcollegessurveyedbyGekaradisagreedwiththeassertionthatinterestinthe

sectorhaddeclinedsignificantly.

Attractingthenextgenerationofseafarersisrecognisedasachallengebytheauthorities.

TheEUhasidentifiedthemaritimesectorasanareaitwishestoencourageandremain

stronginforacombinationofeconomic,environmentalandnationalinterests.A2009

communicationtotheEuropeanParliament35

outlinedanumberofpotentialmeasuresto

addressdecliningnumbersofnewentrants.Furthermore,the2011TaskForcegroup36

recognisedsomeadditionalkeycomponentsthatarelikelytobesuccessfulinattracting

andretaining

Europeans

to

maritime

employment,

specifically

related

to

the

topic

of

this

review,namelyhumancapitalimprovements.

Retainingexistingseafarers

AnotherreasoncitedfordecliningnumbersofUKseafarersarethelowlevelsofretention

amongstexperiencedseafarers.Oneexplanationforthisaretherelativelylowwagespaid

toseafarersrelativetocomparablesectorsalthoughthismaybemoreamatterof

perceptionratherthanactualdifferences.Asdiscussedinthepreviouschapter,mean

averagewage

levels

of

officers

(albeit

from

a

small

sample)

compare

favourably

with

othersectors.

Accordingtoa2007/8survey37

ofcurrentseafarersatsea,themajorityofrespondents

didnotfeeltheyreceivedafairwageforwhattheydid.Thiscanhavetwoeffects.Firstly,

itmaymotivateexistingseafarerstoleavetheshippingsectorandeithermovetoan

onshoreroleoranothersectorentirely,whichinturncanreduceincentivesforshipping

companiestotrainUKseafarersandinsteadencouragethemtolookabroad.Secondly,it

candissuadepotentialentrants.Thereasonscitedastowhythewageisnotperceivedas

faircover

factors

such

as

the

time

spent

away

from

family/friends,

lack

of

internet

access

andoftenatoughenvironment.

Itisimportanttocapturethisnuanceasapotentialexplanationofthedifference

betweenperceptionsofwagesandactuallevelsofwagescomparedtootherindustries.

Theliteraturesuggeststhatitisnotsimplyamatterofseafarersbelievingtheirwageis

inadequateperse,butratherthatitisnothighenoughgiventhefactorsdescribed.The

isolationfromland,friendsandfamilycombinetooftencreateverystressfulworking

conditionswhich,inturn,produceanenvironmentinwhichseafarersbelievetheyshould

be

compensated

more

than

they

are.

Highcadetdropoutrate38

Despitetheintroductionofmeasurestoarrestthedeclineinseafarernumbers,muchof

theliteraturereportstotalnumberscontinuingtodecline.Oneofthereasonsforthis,as

statedinanumberofECreports,isthedropoutrateoftraineecadets.Thissuggeststhat


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academicand/orphysicalcapacityofapplicantsasareasonbehindthedeclineandhigher

dropoutrates.Arelatedfactorisaperceptionthatcadetsaretooyoungwhenstartingon

thecourseasmentionedbytrainingproviderscitiedinGekara(2008)above.

However,asacounter,Gekaraalsoreportsthatcadetsthemselvesputhighdropoutratesdowntopoorsupport(bothfinancialandemotional) whenconfrontedwiththe

coursecontent,thetoughlifeatsea,alackofadequatefacilitiesincolleges,inadequate

onboardtraining,abusiveandinsensitiveseniorofficersduringseatimeand

inappropriatedeploymentofcadetswhiletrainingatsea.Further,somecitedcareerand

futureopportunityanxietiesasareasonfordroppingout.RecentsurveysbyNautilus

Documents

An Independent Review of the Economic Requirement for Trained Seafarers in the UK