How the merger of Environment Agency for Wales, Forestry Commission for Wales and Countryside Council for Wales in 2013 brought efficiencies and is already saving the vehicle fleet almost £1 million. John Maslen reports

Government fleets are under pressure to achieve more with less as budgets are stretched and limited resources have to go further. In recent years, this has inspired the creation of public sector ‘superfleets’, where several organisations combine their spending power, so they can deliver services more cost-effectively.

A merger of public sector organisations into Natural Resources Wales (Cyfoeth Naturiol Cymru) in 2013 created one such fleet.

The new body manages the landscape, forests and water resources in Wales and was formed from the merger of the Environment Agency for Wales, Forestry Commission for Wales and Countryside Council for Wales.

Bringing the three agencies together is expected to save more than £100 million over 10 years and, like every department, the combined fleet is expected to deliver efficiencies to help achieve this goal.

The merger brought together vehicles from the three organisations into a single fleet of about 1,000 cars and vans, making it one of the largest in Wales.

Since then, a focus on delivering savings without affecting services, combined with a reduction in headcount within the new organisation, has reduced the fleet to 590 vehicles, including 150 cars, with overall cost reductions approaching £1m.

Savings have been delivered through innovation and the combined management expertise of executives brought together from the three merged fleets.

Bruce Cochrane, mechanical engineer and fleet manager for Natural Resources Wales, who spent nearly 30 years with the Forestry Commission before his current role, says: “There was a change but although they were three fleets operating very differently, the fundamental principles were the same.

“We have to match the fleet to users’ needs, with fit-for-purpose vehicles at the right cost.  From that point of view it was a natural progression from one area of the business to the new business.”

The first challenge was to create a single fleet from a legal perspective, before introducing a transport strategy that supported the wide-ranging needs of the new organisation.

The changes required extensive fleet management knowledge to identify the issues that needed to be tackled. For example, the Forestry Commission fleet was crown exempt, so vehicles had to be registered for taxation purposes to make sure they were compliant.

Cochrane adds: “You had to go into the detail and that involved people from all the different organisations coming together to programme and map out the changes to create the Natural Resources Wales fleet and become legally compliant.”

Executives on the combined fleet have decades of transport experience, including Gareth Roberts, who oversaw the Countryside Council for Wales fleet, recognised with a Fleet News Award in 2013 for its initiatives to manage grey fleet, and Tom Marshall, formerly from the Environment Agency’s fleet.

The team of 10, reduced from a total of about 20 under the three previous organisations, sits within corporate services, part of the finance department.

Cochrane adds: “We have members of staff from each legacy body. When we came together, the first thing we had to do was sit down and look at the fleet, how we used it and how the business was changing.

“One of the things that was quite clear was that we had an over-capacity and we had to do a bit of a rationalisation across the fleet.”

In-house maintenance has been switched to an outsourced model, while funding requirements are a mixture of outright purchase and lease, along with rental and some grey fleet support. This can be used to avoid a fleet vehicle being left unused for a substantial length of time, such as for transport to the train station for an onward journey.

Every fleet vehicle operates under a ‘bookable and pool’ system, which allows staff to switch vehicles based on the changing requirements of their jobs.

Cochrane says: “We had three lease car employee schemes from the legacy bodies. We looked at the models for them and we worked it through and the outcome was that we terminated those schemes.

 “There is no private use. All mileage is business-related. Some people may need a vehicle full-time because of the nature of their work, but when they don’t need that vehicle, other people have access to it.

“For example, if you make the vehicle available when someone is on annual leave, that represents a 15% improvement in fleet availability.”

An electronic vehicle booking system, developed in-house, allows drivers to book vehicles online and choose the one that best suits the needs of their project.

Employees are urged to pick the right vehicle for the journey, so small cars or vans are chosen for road trips, particularly over long distances, whereas 4x4s are an option for towing and off-road work. Cochrane says: “We are trying to make best use of assets, reduce mileage and save fuel.”

As vehicles are shared, there is a focus on leaving them in good condition, ready for the next user. Cleaning facilities are provided, along with a valet service.

There is also a travel hierarchy (see fleetnews.co.uk/travel-decision-tree)that urges employees to work through a series of steps to decide on the correct transport choice for their journey.

“This includes asking whether a journey is necessary at all,” Cochrane says.

Natural Resources Wales employees are encouraged to use software such as Skype to reduce the need for travel, supported by the widespread availability of phones, laptops and tablets.

According to the 2015 accounts for Natural Resources Wales, mileage across the fleet fell by nearly 800,000 miles in the 2014/2015 financial year, although some of this can be attributed to changes in staffing levels.

To help monitor costs, PIN-protected fuel cards are provided for each vehicle, which can also be used to buy additional items such as screen wash.

The shared-vehicle approach also means vehicles can be moved around the business to balance their mileage before defleet, with an aim to achieve an average of five years/60,000 miles.

The Natural Resources Wales fleet team replaces approximately 20% of the fleet each year. Cochrane says the staged replacement allows the team to adapt the fleet to the requirements of the organisation as it develops.

He adds: “There are funding challenges, but we inherited quite an old fleet (leased vehicles were on five-year contracts but outright purchased vehicles were dependent on the availability of capital funding) so we have taken time to show that by reducing the vehicle age profile you can reduce repair costs and off-road time. The benefit is a more productive member of staff because they are not tied up with a breakdown.”

Natural Resources Wales also recently cut its annual insurance costs by more than £40,000 with a shift from third-party to fully-comprehensive cover. Savings have been achieved by incorporating costs such as claims handling, accident management and at-fault repair costs within the insurance premium.

Cochrane said: “It has also provided better financial control with a known premium figure compared to unknown at-fault expenditure.”

Other developments have included the introduction of three Nissan Leaf electric vehicles, while the fleet team is reviewing its diesel-only policy and expects to see the introduction of small petrol engines in future.

“We want to make sure our fleet is dynamic and moving to suit the changing circumstances,” Cochrane says.

The fleet is also assessing the benefits of telematics to provide much more detailed analysis of fleet movements. It is being trialled on 10 vehicles.

During the second quarter of this year, the fleet will also begin charging a proportion of fleet costs back to individual cost centres to provide them with a clearer view of what they spend on transport.

“Fleet will still be accountable for the repair and monitoring of the budget, but the actual cost of operating the fleet will be based around the usage of the user, so teams have an incentive to think about the ways they travel and how they can reduce their costs,” Cochrane says.

 

Teamwork brings benefits for taxpayers

The creation of Natural Resources Wales established a new fleet community as experts from three organisations now share ideas and best practice.

Cochrane says: “We are actually a fleet community and we have formed a really strong fleet team. We work really closely together and I think that is a major success of the change.

“We can look back and see how we did things, but it is not necessarily the way we will take it forward. We sit down and have a discussion about what is right for Natural Resources Wales.”

Cochrane says there are lessons to be learned as the business continues to move forward and face new challenges.

He adds: “We still have a long way to go, but that’s the job; finding new ways of working and delivering better value for money for the taxpayer.

“We work for the taxpayer and we want to make sure their money is used in the most efficient way.”