Steps to cut grey fleet costs
- Identify the number of grey fleet miles per annum and the cost.
- Get senior management/board level buy-in – make senior managers accountable for mileage reimbursement costs.
- Get union support – explain the need to reduce costs.
- Have grey fleet alternatives in place – pool cars, a car club, daily rental and audio or video conferencing.
- Introduce a travel decision tree/travel hierarchy.
- Consider a mileage cap to restrict the number of miles that can be claimed in a private car.
Case study: Dumfries and Galloway Council
Policy: reduce reimbursement rate and launch pool car scheme
Result: halved size of grey fleet and annual mileage.
In 2008/09, the Dumfries and Galloway Council had 4,000 grey fleet drivers travelling six million miles a year.
Currently, those figures are fewer than 2,000 employees and about three million miles.
The mileage reimbursement rate was reduced as a result of implementing Single Status – a programme to remove pay inequalities across the council, which saw employees lose their essential user allowance.
Essential users were being paid an £822 annual lump sum in addition to 35.1 pence per mile for the first 8,500 miles and 12.6ppm thereafter.
Casual users received 53.65ppm for the first 1,000 miles and 43.65ppm thereafter – up to 8,500 miles.
Above 8,500 miles they were reimbursed at 12.6ppm.
The problem was that many ‘essential users’ were doing less than 1,000 miles a year.
Mileage reimbursement rates for grey fleet drivers were changed to AMAP rates.
Harry Thomson, head of integrated transport and commissioning, says: “The problem with grey fleet was that it wasn’t seen as any person’s responsibility.
“It wasn’t HR, it wasn’t fleet and it certainly hadn’t been under the line manager’s control. However, we realised that it was something we needed to quickly get a grip of.”
In April 2010, the council launched a 100-strong, centrally-controlled pool car scheme, helping to overcome the potential problem of staff refusing to drive their own vehicles on business after the withdrawal of their lucrative reimbursement scheme.
Fleet management software provider Civica developed a pool car module to enable vehicles to be booked electronically and to check driving licences.
CO2 emissions have fallen significantly. Grey fleet vehicles typically had emissions of 150g/km, but the pool car fleet averages 92.8g/km.
Sarah Tooze is a former managing editor of sister title Smart Transport. Prior to joining Smart Transport she worked on Fleet News for more than 10 years, latterly as deputy editor, and won the ‘automotive business journalist’ award in the 2017 Newspress Awards.
Alastair.kendrick - 26/09/2013 11:41
Sorry but this article seems to over simplify the issues and gloss over the tax position. Public sector workers operate what is called the fixed profit car arrangement so they provide a list each year of the taxable element of the allowance paid which gets coded out in most instances. The question is does the AMAP rate give enough to reimburse costs incurred on business travel. This comes down to if figures are on marginal or apportioned costs. If on the latter ( which is the basis adopted by HMRC in setting the rates) then the current HMRC rates are unlikely to cover the drivers costs unless employee is driving a low emission vehicle.