HUMAN resource experts have advised fleets not to scrap their company car fleets in the wake of NatWest's decision to remove 5,000 perk cars from its fleet. Nicholas Bennett, head of compensation and HR practice at Buck Consultants, said many employers were interested in cash allowances and PCPs, and would like to reassign the company car benefit and reduce their fleet administration.

'But they are worried that they must remain competitive, and many employers know the true cautionary tale of companies that switched to cash, or even to diesel, and then had to retract because of the loss of staff and the inability to attract newcomers,' he said. NatWest's decision was characteristic of the city-based financial services industry, said Bennett, adding that in other areas of the economy employers had a real need to keep the company car as a benefit that ranked alongside pensions as the most popular feature in a remuneration package.

IT specialist Logica offers its staff a cash allowance, but is not going to turn its back on the company car in an industry where the recruitment and retention of calibre staff is paramount, according to Martin Hannan, Logica's car fleet manager. 'When the new company car tax structure comes out, based on carbon dioxide emissions, current arguments may be stood on their head, so it's premature to be shedding company cars at the moment in an industry like IT,' he said.

Scottish Equitable offers a cash allowance to its 400 'perk' car drivers who cover fewer than 4,000 business miles a year, but has had an uptake of just 15. Lynda Milne, Scottish Equitable's fleet manager, said: 'We are looking at personal leasing at the moment, but only for our perk car drivers. We need to identify savings, if any, and then consider the personnel issues. It's not just a question of saying to drivers 'here is the cash and there is a leasing company'.'