Concerns over its grey fleet led Colin Hutt to build a flexible company car scheme where the driver is in control. He has tripled the size of the fleet in just two years
Walking into the reception area of the Construction Industry Training Board’s (CITB) head office in Norfolk, it is clear that safety is high on the agenda. The British Safety Council Sword of Honour, which recognises commitment to excellent health and safety management standards, is proudly on display, while visitors are required to watch a four-minute safety video before being allowed to access any other part of the site.
It is a focus that has also driven the company’s fleet policy.
“Health and safety is absolutely the number one key priority, not just because of the plant machinery and the activities that go on here, but we want to try and be as good with the fleet as we are with the training and everything else we do,” says Colin Hutt, category and contacts manager (fleet and insurance).
“When I joined in 2012, the CITB had, for a couple of years, stopped issuing company cars and said it was car allowance only.
“However, with the car fleet dwindling and the grey fleet increasing, it was concerned over controls it had over that and what people were driving, and wanted to bring that under control,” Hutt adds.
“I was brought in to develop a new car policy and, having talked to various people in the organisation, staff unions and representative groups, we developed one that was designed to encourage people to take a company car rather than car allowance.”
It has been a resounding success. The CITB has more than 600 drivers – both business-need and perk – and when the policy was launched at the end of 2013, just 100 were in company cars. Today, that number has more than tripled to 336.
“Under the old company car policy, the CITB had decided that if vehicles needed replacing, it was going to supply Ford Focuses and the only choice drivers had was the colour. That really wasn’t conducive to people wanting to join the scheme.”
Using the Crown Commercial Services (CCS) framework, Hutt looked at the kind of vehicles available if wholelife costs were compared to the provision of the car allowance. “We wanted to ensure that, whatever anyone chose, it wasn’t going to cost the CITB any more than the cash allowance,” he says.
The CITB used the framework to appoint Lex Autolease to provide a wide range of services, including contract hire with maintenance, fleet and accident management. “The whole caboodle,” says Hutt.
“We wanted to go sole supply because I didn’t want to have to deal with six or seven different leasing companies for every car we ordered.
“I’d rather have one leasing company, one number for drivers to call and one set of invoices to keep it as simple as possible.”
Drivers are able to view the vehicles available to their grade through a bespoke portal provided by Lex Autolease. “That gives them thousands of vehicles to choose from,” says Hutt. “Now we’ve got a lot more happy drivers who now have a wider choice of vehicles they want to drive.
“This encourages people to join the scheme and we are getting more opting in all the time: we’ve got 280-odd people taking the allowance and 300-odd company car drivers and it’s moving towards company cars again.”
There are some restrictions on vehicle choice, however.
Cars have to have four or five doors, CO2 is capped at 130g/km and fuel economy has to be more than 50mpg. “Other than that, it’s a free choice,” Hutt says.
“We’ve also built in flexibility whereby all but the senior managers can contribute an optional £50 a month to open up the choice list further, so if they want something that’s a little bit better or want the estate version, they’ve got that choice.
“Typically, at the lower grade we’ve got people in Ford Focus Titaniums and Nissan Qashqais, and if they want to pay £50 a lot of people are choosing cars like Audi A3 or BMW 1 Series.”
He adds: “The fantastic thing is that the driver is in control. If they want the 2.0-litre car with the higher spec they pay slightly more tax; if they are happy with the smaller engine and lower spec, producing less CO2, they are going to save money. It’s entirely up to them.”
Drivers are not allowed to alter a vehicle’s standard specification, but all vehicles must be fitted with rear parking sensors. This has virtually eliminated claims from people reversing into objects.
When the company car policy was launched, the CITB partnered with the Licence Bureau to introduce a licence check regime, including gathering additional information on grey fleet vehicles.
“Our policy makes it clear what sort of vehicle is acceptable if a driver takes the car allowance,” says Hutt.
“It has to be less than seven years old and have done less than 140,000 miles. It must be comprehensively insured and it must not be a two-seater convertible or a commercial vehicle such as a pick-up because it’s got to suit the image of the CITB.
“We had a lot of resistance when we first implemented these restrictions because people didn’t like to be told that their car was no good and that they needed to nominate another one to use on business.
“Some people were saying they hardly did any business miles, and we’d say that’s not the point: we’re providing you with an allowance – and it was quite a generous one – and the terms and conditions around that allowance are that you provide a vehicle that fulfils this criteria,” Hutt adds.
“Once we’d explained that to them there has not been a single person who hasn’t complied to the policy.”
Annual checks are made on all those vehicles, and this has created a comprehensive database.
“This allows us to contact anyone approaching the seven-year limit to say they need to nominate another vehicle, or would they like a company car?
“Quite a lot of people say they would at that point, which is what we want.
“Having drivers in company cars is so much safer because, whatever you do with the grey fleet, there is still an element of risk. But at least we’ve got a process that makes it a little more certain, as the cars are checked every year.”
Hutt wants to bring the grey fleet more in line with the company car fleet: in 2018 he is aiming to reduce the maximum age of a grey fleet vehicle to five years, as well as introducing a CO2 cap that matches that of the company car fleet.
“Part of our corporate social responsibility is that we want to reduce our impact on the environment and the business on the whole is looking at lots of things to do with carbon emissions and the environment,” he says.
“Cars are obviously quite a big part of that and our 130g/km cap will almost certainly come down in the next couple of years.”
Average emissions of the company car fleet have fallen from 135g/km in 2012 to 100g/km now, and the average CO2 on the cars being added to the fleet is just under 100g/km.
“Our grey fleet average is 120g/km which is still 20g/km higher than the company car fleet, but it’s not bad and it suggests that if we did introduce a CO2 cap it probably wouldn’t be too onerous,” says Hutt.
The ability to create a company car policy from scratch has led to a great deal of job satisfaction for Hutt.
“The other fleet roles I had were with companies that had established fleet policies and there were a lot of things that I couldn’t change,” he says.
“It may have been because I didn’t have the authority or there was no will to really change things in the way we needed to because of the amount of contentious issues it could pull up.
“One of the things I liked about the job I was offered here was the CITB was basically saying ‘we want you to create a new car policy and you can do whatever you like’ and that was fantastic.”
Change, however, is never far away in fleet, and May 1 saw Hutt’s job title evolve from fleet and insurance manager to product and category manager (fleet and insurance).
“I get the feeling the focus is going to be more on procurement and cost rather than just managing the fleet,” he says.
“There is a lot of restructuring going on in the company. The change is recognising that running the fleet is not just about providing company cars, it’s everything to do with transport.
“It’s to do with fuel purchasing, it’s to do with different types of travel – taxis and trains – and it’s to do with everything that touches on fleet.”
Working in fleet
I kind of accidently moved into fleet. My background was in insurance with Aviva (then Norwich Union) before I joined Circle Anglia in 2003 as purchasing insurance manager. About a year into the job, it merged with Circle Housing and the fleet manager left, so my boss at the time said ‘we need someone to help out. Can you manage a fleet?’ I said ‘well, ok’, and fell into it then. I found it thoroughly fascinating, and it grew from there.
We’ve had a number of drivers opt for plug-in vehicles for their tax benefits and we expect this to continue. We’ve also taken on three electric Nissan e-NV200 vans to carry out delivery rounds on our site and we are probably looking to add another one or two. We have used diesel vans for this in the past but they only do seven-10 miles a day and never leave the site and this has caused some particulate filter problems. We’ve got three charging points on site so the electric vans have been a good solution.