While the full consequences of the Government’s Comprehensive Spending Review are yet to reach public sector fleets, the people responsible for managing the company cars and vans are making provisions for improved efficiencies and lower overheads.

At the second Fleet News Public Sector Roundtable, options discussed included cutting the number of vehicles on the fleet, tackling fuel bills, reducing annual mileage and reassessing funding methods.

Summing up the mood in the room, Graham Hine, University of Warwick transport manager, said: “We are mindful of the spending review but we are not sure of the level of cuts.”

Hine stripped out 5% of his costs last year. He is now looking at acquisition policies, vehicle tyre, rationalisation and overall operations.

Councils are under pressure to outsource more of their fleet operations, but those at the roundtable sounded a warning.

“If you are outsourcing it has to be the right decision for the right reason, not a knee-jerk reaction to the need to reduce cost,” said Phil Clifford, fleet and technical manager at St Edmundsbury Borough Council.

Hine added: “We feel it is cost effective to do it in-house. The university likes to control its activities.”

He is planning to switch from contract hire to outright purchase.

“I’ve demonstrated the potential savings with outright purchase – over a five-year cycle we expect to save around £500,000 over 60 vehicles, around £100,000 per year factoring in all the running costs,” he said.

“We are now looking at this and we will try to find the money.”

Switching funding methods is something the Driving Standards Agency would like to consider – but in reverse.

It currently outright purchases its motorcycles which creates issues with the seasonality of testing – for around four months of the year, 80% of the DSA’s motorcycles are not used.

But there’s a problem. “No-one leases bikes,” said Paul Baldock, DSA operational support manager.
Cutting the replacement cycle from five years to three would improve the DSA’s wholelife costs thanks to lower servicing costs and no more MOTs.

However, that would require the nod from procurement and finance because it would require greater funds for buying the bikes.

And procurement departments can often muddy the water, according to other fleet managers.

“HR, purchasing and others will be making decisions where they don’t understand the consequences – they won’t know if they are being charged too much, they won’t know what to look for or where to go, so they won’t be saving money,” said Hine.

The role and efficiency of buying groups came in for criticism with some fleets claiming they can achieve higher savings by going direct to a manufacturer for a bulk deal.

The fleets indicated a desire to work under a pan-government framework instead of the many splinter framework agreements created by neighbouring local authorities. These affect the level of discount that can be negotiated and have resulted in low uptake among public sector bodies.

The level of commission that buying groups take from the deal was also cited as a reason for making the framework more expensive, although fleets recognised that buying groups save time – typically three to four months – because they have already done much of the tendering work.

John Harris, head of commercial development at Milton Keynes Council, is looking at a 7% cut next year. He intends to have greater uniformity across the fleet to reduce instances of vehicles standing still.

“Some sacred cows will have to be sacrificed,” he said.
Harris is also looking to increase utilisation of the council’s workshop by competing for third-party work with local dealers. “I expect this will be something that other councils with workshops will have to do,” he added.

University of Birmingham transport manager Monica Guise, who is considering buying six-month-old vehicles to reduce upfront costs, is also looking to manage occupational road risk with more assessments and updated business systems.