Julie Jenner, ACFO chairman gives her predictions for 2010.

"Cost management was the key phrase for fleet decision-makers in 2009 and amid the green shoots I hope the dawn of a New Year is not marked by a reversal of policy.

"While no-one likes recession, the economic downturn has provided a major opportunity for businesses to closely analyse their fleet operations and pull back from what many would consider to be ‘boom time’ company car policies.

"Throughout 2009 a ‘back to basics’ strategy has seen many organisations review fleet policies that were implemented during the years when, in many cases, HR departments ruled and corporate excess was fashionable.

"In turn that triggered demand for company cars that were frequently more of a ‘fancy benefit’ than a ‘working tool’ and the launch of cash alternative schemes that have in the main proved expensive luxuries for many organisations.

"During 2009 businesses reacted to the continual tightening of CO2-based motoring taxes and the introduction of emissions-based capital allowance rules by ensuring that company car choice lists featured low emission vehicles, which remained fit for purpose.

"The pursuit of a cash-saving low emissions strategy also heralded the introduction of a CO2 company car choice cap - frequently set at 160 g/km but sometimes as low as 140g/km - influenced by both the capital allowance revisions and possibly the April 2010 introduction of a ‘first year’ Vehicle Excise Duty rate that will hit cars over the 160g/km threshold.

"In many cases even historically cash-rich businesses - such as those in the pharmaceutical and finance sectors - have moved away from open choice lists and introduced a more limited company car selection.

"Meanwhile, there has been an increasing realisation from businesses that a focus on occupational road risk management - including efficient and effective management of the ‘grey’ fleet - will also contribute to cash savings if their accident levels are cut.

"Fleet replacement cycle extensions in the early part of 2009 also played their role in helping companies cut costs, but I detect now that with the emergence from the deepest economic gloom new car buying and leasing is returning.

"Therefore, while 2009 was the year of cutting operating costs it was also the year that many fleet operators grabbed the opportunity to implement much trumpeted best practice measures that delivered cost savings.

"I hope that as the UK emerges from recession through 2010 and into 2011 that companies will remain true to the cost-cutting, low emissions, risk averse measures they have introduced and not return to the corporate excesses of yesteryear.

"As businesses looked to cut costs they realised, in many cases, that providing cash allowances in lieu of a company car was not always the most cost-effective strategy.

"Additionally, as ACFO research has shown, employees taking cash have typically opted for an older and less environmentally-friendly car that is not equipped with the latest safety measures.

"Therefore, I think 2010 will herald the return of the company car in increasing numbers, particularly as motor manufacturers introduce ‘cleaner and greener’, fuel-sipping models.

"Contributing to that swing will be a trend for more employers to consider introducing salary sacrifice schemes as part of their employee benefits packages. With manufacturers introducing an ever-widening choice of low emission (sub-120g/km) cars, the option of an environmentally-friendly company car as a tax-saving benefit over salary is likely to appeal to many employees as firms look to bill themselves as the ‘employer of choice’.

"Meanwhile, in the 2009 Budget, the Government promised a series of changes to company car tax in 2012/13, which includes starting the benefit-in-kind tax system at a 10% threshold and not the current 15% to reflect the increasing availability of low emission cars.

"There has also been talk about HM Revenue and Customs abolishing the current 3% company car tax diesel supplement on models that meet Euro6 emission standards.

"With 2010 a general election year, I hope the current Government in its spring Budget or a newly-elected Government in what could be an ‘emergency’ Budget in the summer put forward a reasonable timescale for change.

"In meetings with HM Treasury ministers and officials, ACFO has continually pleaded for advance notification to enable fleet operators to prepare for change in an orderly fashion.

"I would hope that in 2010, the Government - the existing one or the new one - clarifies the company car tax strategy for 2012 and beyond to allow businesses to implement timely policy changes that ensure stability and are not left in limbo and then forced to react in haste.

"Fleet operators should also be mindful that new ‘taxes’ - workplace parking levies, congestion charging - are on the near horizon. Likely to be implemented by local authorities as opposed to central government they, nevertheless, will impact on businesses.

"Today fleet operators are not just concerned with company car choice lists and SMR costs, all manner of travel-related issues land on their desks. The implementation of new ‘taxes’ will impact on company costs and fleet operators should keep an eagle-eye on developments.

"Perhaps the big unknown factor in 2010 is what will happen with residual values. While used car prices recovered significantly in 2009 they remain below their pre-recession levels. In 2010, the marketplace will have to ‘swallow’ not just those company vehicles scheduled for replacement but those that are de-fleeted following a replacement cycle extension.

"The expectation is that used vehicle values in 2010 will recede slightly from the high point of 2009, but to ensure that there is no collapse the disposal process must be proactively managed by fleet operators and the industry at large.

"The last 12 months did not see the industry consolidation or the collapse of fleet suppliers that many predicted would occur in the recession. That means that fleet operators continue to have a wide array of suppliers to choose from.

"But, the cash-shortage has meant that the supply side of the industry has, in many, cases pulled back from R&D investment in new products. As the UK emerges from recession I look forward to new services and solutions being launched in the coming months that will continue to help fleet pro-actively manage costs.

"Finally, 2009 could be viewed as the year to bury bad news. After-all, employees were mostly grateful to retain their job and less worried about whether their next company car was a ‘bells and whistles’ range topper or from lower down the model line-up.

"There has been an acceptance from both employers and employees of the costs associated with fleet operations - tax, fuel, SMR the list is endless – and that with implementation of efficient and effective policies and procedures controls can be applied.

"I hope that in 2010 both parties do not forget the pain of 2009 because ultimately staying on the route that has been established will deliver a greener and safer future for all of us."