MUNICIPAL HIRE
How hire can lend a helping hand
Uncertainty over funding levels is forcing councils to find new ways of managing their fleet operations. Paul Wood looks at how contract hire could help in this respect
ouncils have traditionally adopted a frag- mented approach to fleet provision with indi- vidual transport and fleet managers, specify- ing their own departmental fleet require- ments according to their objectives. Increasingly they are now devolving the process of sourcing complex vehicle provision to an already understaffed procure- ment department, which is more geared to sourcing supply for commodity items.
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As staffing levels look set to be decreased even further, a real possibility exists that these overworked procurement teams will start to adopt the same procurement practices for all items they procure. However, local authority procurement teams don’t always have the specialist operational knowledge necessary to understand what is required of the vehicle.
Clarification is needed At TransLinc we often have to clarify a customer’s specifica- tions and requirements to make sure the vehicles are equipped to do the job properly. This technical knowledge has a value, which isn’t taken into account in a ‘lowest price wins’ tender situation. Councils need to take a real look at how services are delivered to their end users as the model of serv- ice delivery that has worked for them for the past 50 years is ripe for change.
A good indicator that authorities are starting to give serious consideration as to how they operate their services in the future is the current upturn in hire period extensions and the increased use of short term and spot hire, while they wait out the impact of government changes and consider their next move.
But we are still seeing, when faced with having to cut budg- ets quickly, councils putting greater emphasis on reducing the
front-end cost of vehicles through specification change, with- out taking into account the fundamental impact of these spec- ifications on service delivery. The result can be vehicles that are not fully suitable for purpose, and that means greater VOR, higher maintenance costs and a negative impact on end user services.
Holistic approach is best In today’s climate, there should be a move towards a holistic approach with fleet provision across all departments – and even between councils – considered, also taking into account the infrastructure and staffing required to operate services.By consolidating their fleet requirements in this way councils can make significant long-term savings, without impacting the quality of their services. We encourage our clients to look at this wider picture and the larger hidden costs that a fleet operation will incur. We see the vehicle as just a single element of the overall service pro- vision offered by the council – the tool that does the job. But the infrastructure that supports the vehicle and keeps it oper- ating also needs to be acknowledged and assigned a value. From our perspective, the more rigid the tendering process, the harder it is for the council to innovate a solution which meets their service objectives. The more flexible the tender requisites are, the greater chance we have of developing solu- tions that ticks all the boxes for the council. We are starting to notice a trend towards full service provision, with councils looking to consolidate suppliers, services and the internal resources that support them across a range of operational areas that traditionally would not have worked together. Vehicle contract hire offers local authorities the opportuni- ty to outsource some of the costly elements of infrastructure associated with this joined up provision, such as accident
32➧ October 2010 Local Authority Waste & Recycling 31
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