Somerset County Council’s Executive Board rejected three tenders that would have covered its entire 480-vehicle fleet.
But the council has come under fire for saying it was ‘disappointed’ not to have reached an outsourcing arrangement.
Announcing its decision, it said it had hoped to extend a strong partnership with private industry and benefit from industry expertise and buying power.
But the board concluded that the tenders were not affordable.
Councillor Sam Crabb, portfolio holder for resources for the council, said: ‘Obviously it is disappointing to the council, and to our three bidders, to reach this conclusion, after all the hard work put in by the bidders and the council team.
‘We are, however, taking many positives out of this process and have been particularly impressed by the way in which tender companies have engaged with the council.
‘We have thoroughly reviewed our current in-house service and can see the potential for improvement and service development.
‘Although we will not have the benefits of risk transfer and innovation which the private sector would have brought, we feel we can develop the present arrangements and give our many customers a greatly improved service.’
But industry expert Stewart Whyte, director of management company Fleet Audits, said it seemed the council had not done its homework.
He said: ‘I’m surprised that they tried to put everything into a single outsourcing deal, when the industry has very little history doing trans-sectoral deals. They have to recognise that if three bids have come in and said it’s going to cost a lot, they have to develop their in-house operation and not keep trying to find a cheaper way to outsource it.’
Fleet companies are constantly advised not to give up total responsibility for their fleet when they outsource in a bid to free up time and save money.
Fleet managers’ association Acfo says that although handing over the running of a fleet to a specialist company can be a sensible move for some companies, it is imperative at least one member of staff within the organisation has some sort of fleet role.