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Spending Review could bring opportunities for fleet industry

By / 7 years ago / Latest News / No Comments

Sir Philip found that the daily rental price for a D-sector car varied between £27 and £119, and that rental services accounted for £29 million of Government annual spend.

Highlighting the issue could lead to an opportunity for companies in the fleet sector to help drive efficiencies, executives have claimed.

Stuart Walker, brand director, Automotive Leasing, LeasePlan's specialist public sector fleet, said: 'We are exploring more and more with the public sector fully managed, outsourced fleets. For private sector fleets in excess of 250 vehicles, it's estimated 60% are using outsourcing but this is much lower for similar sized public sector organisations, somewhere near 25%.

'Businesses have made substantial savings in recent years by outsourcing their fleet management to specialist providers and the public sector can learn from this experience._

'There are examples of public sector organisations, like Ashford Council, that have reaped significant benefits from outsourcing their fleets, including significant financial savings, reducing emissions and improving employee health & safety. It's time more government bodies followed suit and planned their vehicle needs for the long-term.'

The CEO of rental consultancy Nexus, Neil McCrossan, said of Sir Philip Green's findings: 'Our first-hand experience has already shown up a serious lack of execution on the ground when it comes to managing vehicle rental and mileage allowances. So I am not at all surprised he found a £92 difference in prices paid for daily rental – if I am surprised, it's that the discrepancy wasn't bigger!

'It's not only the different costs paid for the same rental that is the issue but also how rental is managed. There are Government rental contracts where the administrative overhead could be cut by 75% we estimate, with no loss of efficiency, just by using systems and expertise that are readily available.

'Across Government, hundreds of millions of pounds are spent every year on vehicle rental and the payment of private mileage allowances to staff using their own cars on Government business. However there is no overall control and co-ordination of this spend. It seems that every arm of local and national Government, all the emergency services and the military each run their own tender exercises. A major commercial operation would not allow all its individual departments to tender for the same service separately, so why does Government?'

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