Fleet News

Government agrees £270m leasing deal

The government has agreed a multi-million pound deal that will lead to the overhaul of public fleet management.

The procurement deal gives thousands of public sector fleet managers cheap leasing rates.

It is the first step in a programme that will see other elements of public sector fleet management come under national framework agreements.

The authority leading the framework, NHS Purchasing and Supply Agency (NHS PASA), which alone operates more than 30,000 vehicles, will save an extra 1% on top of its already very competitive lease rates through the deal.

The new deal, launched last week, is a collaboration between several major public sector organisations including the Office of Government Commerce (OGC). It is worth up to £270 million over three years and accounts for around 100,000 cars. The OGC called it a “major advance for car leasing within the government”.

As one of the biggest ever deals of its kind, it uses huge economies of scale to drive down the cost of leasing.

All public sector fleets are able to use the scheme with claimed savings of 2-3% on previous prices, with some of the most popular models being available at much greater discounts.

The scheme is also designed to save time and administration, with all information on a website available to public sector fleet managers. Any fleets that opt out will have to demonstrate they could get better deals on their own.

Steve Newton, category manager – fleet, collaborative management and a key player in the deal, said the next step is to go to the fleet management industry and create the same offering there, using the buying power of the combined public sector to get the best deals. Such a deal was likely to happen in the next 12 months.

Mr Newton claimed that the sheer volumes involved in the deal had not forced leasing companies into joining if they felt it was not financially worthwhile.

He said that despite the very competitive rates it would create, the streamlined system and opportunity for extra business made it a very attractive proposition to the leasing firms involved.

The suppliers include Appleyard, Arnold Clark, Arval, Automotive Leasing, GE, Lex, Lloyds, Lombard, Masterlease and TCH.

All have signed a Government Master Hire Agreement with standard terms and conditions across the framework.

Public sector fleet managers will have access to a website that will give them all the details of their procurement, and includes environmental information on their vehicles.

Government departments have been criticised by the Sustainable Development Commission in the past for their lack of knowledge of the environmental impact of their fleets, and Mr Newton said this scheme should help to make it clearer.

“The website even allows you to put caps on vehicles, tailored to your departments specific needs, so that you cannot exceed prescribed CO2 levels,” he added.

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