Getting it right

Once upon a time, the choice in business travel by car was simple, if a little stark: employees who needed to travel a lot had company cars; everyone else with a low travel demand used public transport or their own cars against a mileage payment. That all started to change in the mid-seventies, when the “perk” car market exploded, exactly because of taxation, economic policies and employment pressures. Sound familiar?
    
In recent years what used to be called “the fleet market” has changed dramatically. There has never been so much choice, with so many schemes claiming market superiority as well as specific advantages in overall costs/driver tax burdens etc.
    
The fact is that many of these schemes do represent an optimum solution to particular sets of circumstances – but it is clear that many are sold on the basis of the wrapping, with no clear understanding of how and why they should be producing a result. Sadly, it is true that some of these schemes are designed to exploit fleet operator lack of knowledge about the realities of the market place and the tax system.

Understand your aims
It is vital that employers have a clear idea what “the fleet” is for. Depending on circumstances for the business this can be anything from 100 per cent business use to 100 per cent private/perk use – or anything in between. So it is clearly necessary to understand what the actual need is, and build the policy and delivery to meet the need optimally. It is always worth remembering that the fleet must serve the business – not the other way round!
    
In looking at the need it is vital to collect accurate data about the current situation and assess that against what should be happening. When looking at any new scheme based, for example, on exploitation of the HMRC tax-free mileage reimbursement rates (AMAPs), there is an obvious need to have a clear picture of what business mileage levels are being claimed – and why. It is pointless looking at a scheme that assumes a cost benefit for average mileage levels of 8,500 business miles pa if your fleet is only averaging 5,000 pa.
    
Similarly the assessment of carbon reduction opportunities must be based on what employees might select under the allocation policy. It is important to recognise the value of low fuel consumption as a cost and tax reduction support, but there needs to be a mechanism to get people into these models – difficult if the choice list makes it easy and attractive to drive a larger model with relatively poor consumption.
    
A major issue is the fact that most employers do not have an experienced “fleet manager” any more. The job is often a part-time role with the “technical stuff” handled under an outsourced arrangement with a leasing/ contract hire company. But given the complexity and range of choice in the market, it is still important that someone in the organisation has an external point of reference.

ACFO’s role
ACFO (formerly the Association of Car Fleet Operators) has, since the 1970’s, provided a clear, unbiased forum for “fleet mangers” to come together to network and exchange ideas and techniques. Membership is open to any organisation with a “fleet” interest although nowadays many members deploy alternative schemes like ECOS (Employee Car Ownership Scheme), cash allowance or mixed strategies.
    
Regional meetings provide a friendly and non-threatening environment for delegates to mix and mingle, talk or just listen to the industry buzz. It sounds very mundane – but in reality the quantity and quality of information exchanged freely is very high. The natural flow of information is from the people representing the larger fleets down to those with small fleets – but it’s not all one-way! Many innovations and techniques have come from enthusiastic fleet managers with just a handful of cars and/or vans.
    
Currently the three key topics across the fleet market remain:

• Control of the fleet budget
• Green fleet agenda
• Duty of Care/road safety

One of the characteristics of fleet is the diversity, with every fleet operator looking at different priorities. Cost control is a long-term and on-going issue for all fleets: other factors tend to come and go depending on the national environment. So there are no specific quick fixes for these: the priority needs to be set depending on where on the scale the fleet is currently. And that of course needs an awareness of how the fleet performs in absolute terms and against similar fleets with similar patterns.
    
A significant part of the debate includes ways to collect and use operational data to help gain better control of the whole “fleet” envelope. ACFO members know only too well the old adage “You can only manage what you measure”. Clarifying the really useful statistics has already helped many operators to cut costs and more recently, fuel use (therefore the carbon dioxide output) and accident rates.
    
ACFO has a huge body of expertise across its membership of all these areas and indeed many member fleets have been used as Best Practice case studies in Green Fleet and Road Safety studies. All of this information is accessible by members both on meetings and online at our website (www.acfo.org).

Aspects of fleet management
So much for the “advert” for ACFO membership. What readers should be considering is their ability to manage all the various aspects of “fleet management” to the right degree. This has to be much more than outsourcing the daily fleet management to a leasing company: control of all the policy aspects needs to stay as an in-house responsibility, as does the whole business of “managing on-road risk”. Buying in some driver training might appear to put a tick in the box for “Duty of Care” – but is it enough?
    
Increasingly, traffic police investigations of serious and/or fatal road traffic collisions asks about the purpose of the journey – and if it was a business journey then they are likely to follow through with an investigation into the employer’s policies and practices. In addition to any criminal investigation – which will of course include the top management itself – the effects of the no win no fee legal system means that employers face ever-increasing risks of claims from injured 3rd parties (or their survivors) on the basis that pursuing an employer is always likely to be more productive than chasing the driver.
    
Retaining ownership of the policy also helps to clarify when it is time to change the fleet organisation.
    
Business patterns change. Tax rules and allowance thresholds change. New car models change and evolve. Employee expectations change – and budgets get severely challenged. In short, this is a fast-moving environment and what was the ideal policy four years ago may be wide off the mark in your fleet, today.
    
ACFO tries to support members in several very practical ways. Internally we collect and publish Best Practice guides in specific areas of fleet management. Our latest Guide was developed specifically to support public sector employers in how (and when) to carry out checks of drivers’ documentation. Health & Safety regulations make it pretty clear that “if an employer commissions a journey on the public roads, the employer carries the Duty of Care” – irrespective of the ownership of the vehicle being used. We have templates for Driver Handbooks and Driving at Work Policies, all based on very practical information from within the membership.
    
Across the nine ACFO regions covering the UK, there are at least four meetings each year, with presentations and displays of the latest models, devices and regulations. These may cover tyre performance, new engine/ drive trains/fleet software or new tax rules.
    
Nationally ACFO works with several government departments and agencies to ensure that the needs of “fleet operators” are properly represented when new rules and legislation is being framed. Our input, covering the whole spread of public/ private and charity sectors/large and small fleets and range of operating circumstances has been very valuable in protecting employers from excessive administration and red tape; and drivers from clumsy taxation layers.

Fit for purpose
It is pretty fundamental that the vehicles in use are actually capable of meeting the expectations of clients, employees and the fleet budget. “Free choice” for user-choosers may be a good system in some car fleets – but certainly not in all. In the van market, fitness for purpose is even more important, with payload weight and volume much more important than driver preferences. Again, the Duty of Care issue is an important consideration.
    
Given the size of some member fleets, there are usually several members who have some experience of just about every make and model on the market – and can offer an opinion tempered by direct knowledge.
    
In the same way, new systems coming to the market have been tested by several prominent members, who can advise on the specific circumstances where any new scheme might – or might not – work well. One current consideration across all ACFO regions is the debate about “Salary Sacrifice” schemes which seek to optimise fleet costs and provide softer employee benefits. In some ways this tends to reverse the “get rid of company cars” philosophy which was prevalent just a couple of years ago.
    
By examining the current market, the types of models on offer and employee travel patterns, such schemes evolve to optimise the overall fleet/business travel market. The next new thing might not be suggested by a current supplier – if they don’t yet offer such a deal! That is why it is absolutely essential for the business to retain some level of contact with and even expertise in the fleet market – to provide a counterbalance to even the best suppliers in terms of what’s best and when to change.
    
Joining ACFO is easy. We are a single-tier organisation with a single membership subscription (currently just £170 + VAT pa. That’s probably less than one month’s rental of one of the smallest models on any fleet!)
    
ACFO membership provides free access to the meetings, to a wealth of information and advice on www.acfo.org, and a weekly e-mail NewsFeed delivered direct to the named delegate’s mailbox.