FLEET MANAGEMENT
Mark Gibson of ING Car Lease, one of the top ten fleet operators in the UK, argues that public sector organisations have unique fleet needs.
W
hile we would certainly encour- age public sector fleet managers to
audit their fleet performance on a regular basis, the short term savings created by de- fleeting will not necessarily translate into long term gain. An initial headline saving of around half a million pounds on a fleet of 100 cars – based on 5,000 miles annually – will soon get swallowed up by the costs of managing a ‘grey fleet’.
Grey fleet is an issue that seems to rear its head on a regular basis in the public sector. Essentially, it refers to any non-company procured vehicle that is used for business miles. This could include employees who use their vehicles regularly for business purposes, doing high mileages, as well as those who only use their vehicles once or twice a year on public sector business.
Evidence suggests grey fleet vehicles tend to be older and have higher carbon dioxide emissions than their leased counterparts. Along with the environmental impact, there are also implications on the organisa- tion’s duty of care to its employees. While a company car scheme will be controlled and transparent – using fleet insurance at the appropriate level, servicing vehicles regu- larly and checking driving licences – the grey fleet often lacks these checks.
Responsibilities
Many employers fail to realise that, when vehicles are used for business purposes, the same duty of care obligations apply regardless of the vehicle’s ownership. That means the employer is obliged to ensure the vehicle complies with health and safety legislation, as well as obtaining proof from the employee that it is safe, fit for purpose, insured for business use, maintained and that they hold a valid driving licence for the vehicle.
While no-one in fleet management has yet been prosecuted under corporate man- slaughter legislation, the first prosecution has now come about and the level of fines imposed demonstrates that the Act has teeth. There will not be an NHS fleet man- ager out there who wants to be the first to be prosecuted and fined for poor manage- ment of the grey fleet.
Structured employee car ownership plans 78 | national health executive Sep/Oct 11
(SECOPs/ECOPs) can mitigate some of these concerns, as the organisations running them will have been through a long analysis process before going ahead. However, the problem often comes with drivers who slip under the radar, such as those who do not use their vehicles for business very often or for whom business mileage is very low.
Checklist
To comply with duty of care requirements, there are three simple things a fleet man- ager overseeing a grey fleet can do; have a reasonable policy stating how an employee can use their own vehicle and what pa- perwork is required of them; ensure em- ployees are aware of the policy; and have a process to ensure that policy is followed. Simple though it sounds, this can become an administrative nightmare.
However, the answer is not necessarily the removal of the grey fleet. Before any deci- sions are made, it is vital to undertake a genuine analysis of the travel policies and activities within the organisation. This means assessing how many business jour- neys are made; average journey length; and the form of transport taken. In most cases, this will lead to a holistic approach that in- cludes company cars, ECOPs, daily rental, public transport and non-ECOP personal cars. It is often beneficial to bring in an ex- pert company to oversee the holistic fleet solution, as they will be able to manage all duty of care obligations and supply any ve- hicles required.
Public relations
One of the biggest challenges for fleet manag- ers in the public sector is public perception.
However, when managed correctly, an or- ganisation’s fleet can actually reduce costs, as well as mitigating risk and administra- tive hassles. Most public sector bodies will protect their cost base by giving a fixed vehicle allowance, set at a level to attract the right quality of personnel to the or- ganisation, and the employee will pay the excess. In the case of the Jaguar XF, this could mean the employee pays private use contributions (PUC) which save the or- ganisation around £45,000 per year on the potential cost without contribution, as long as all cost elements including Class 1a NIC and fuel are managed within a comprehen- sive fleet policy. When looking at a total fleet, the public sector can potentially save millions of pounds by being creative with benefits packages and reducing National Insurance payments and taxation.
The reality is that these headline-grabbing luxury cars are very much the exception rather than the rule in the public sector, which has a far lower average value vehicle and carbon dioxide emissions levels than its corporate equivalents.
FOR MORE INFORMATION
ING Car Lease, Phoenix House, Cookham Road, Bracknell, RG12 1RR T: 0870 402 8242 E:
info@ingcarlease.co.uk W:
www.ingcarlease.co.uk
Recent tabloid coverage of Strategic Health Authority spending has been less than posi- tive when it comes to car leasing, highlight- ing instances of a Porsche Boxster, Audi A5 Coupe, Mercedes CLS, BMW 330 and Jaguar XF being provided within the £1m a year to- tal bill. This isn’t the first time the public sec- tor has come under fire for what is perceived as excessive spending on fleet.
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