From FN50 misfit to an essential part of the fleet landscape, Provecta has come a long way
Nick Sutton describes his business as a cross between former England rugby manager Sir Clive Woodward and actress Kate Winslet.
It has the strategy, leadership and innovation of Sir Clive combined with the ethical values and integrity of Ms Winslet.
Extending the Kate Winslet analogy a bit further, Provecta is certainly more art house than mainstream cinema.
Before Zenith came along (Zenith Vehicle Contracts acquired Provecta two weeks ago, creating one of the largest leasing, fleet management and vehicle outsourcing businesses in the UK) it was sitting there in the FN50, surrounded by contract hire companies and offering just one financial product – an Employee Car Ownership (ECO) scheme.
So Nick – currently chief executive of Provecta, as well as group development director for Zenith – was Provecta just a misfit?
“We provide a significant service,” comes the robust response from Mr Sutton, a slim and eloquent man who is an amateur jockey in his spare time.
“If we were such a misfit you wouldn’t have other companies providing ECO schemes too. But we specialise in it and do it to a greater depth than anyone else. And that’s what attracted Zenith to us.”
So that’s me put in my place.
“Provecta remains as an ECO specialist,” continues Nick, “while Zenith offers a broader range of fleet solutions.
“The change to capital allowances next year is going to create a situation where companies will be looking for a blend of products accessed from a single supplier.
"Provecta will be a company that can provide that.”
Provecta Car Plan, to give the company its original handle, was formed in 1995.
The idea was to tap into those companies that wanted to ditch the administration and tax burden of running a traditional company car fleet with a new product.
It started with just two employees, but has now grown to 60 and has just moved into new premises in Reading.
“We started with a blank piece of paper and simply tried to create a service that wasn’t being provided,” says Nick.
Provecta has certainly survived, undoubtedly helped by the changes to CO2-based company car taxation in 2002, as many drivers and companies took the opportunity to disband company car schemes.
But now, with increasing evidence of companies shifting back the other way – stimulated by the renewed focus on health and safety driving issues, plus long-term uncertainty over Approved Mileage Allowance Payments (AMAPs) used for ECO calculations – are the days of Provecta’s ECO offering numbered?
“Not at all. We see it as a big opportunity,” comes the response.
“Companies have realised that simply giving employees cash for a company car takes away any form of control.
"With our ECO scheme you get the health and safety control without taking away the flexibility and choice HR often demands. That’s why Zenith bought us – for our expertise and our people.”
That’s a good point. But Nick has more.
“The other element is AMAP rates.
"This is a big problem for the Government because there are five million public sector employees.
"It is not viable to give them each a company car, so the only option is for them to use their private car on essentially Government business.
“Getting rid of AMAPs would affect a significant number of key voters, so I don’t think it will happen. In the future, AMAP rates may be linked in a simplistic way to CO2. But the big prize is to get this ‘grey fleet’ into newer, more efficient vehicles.
“Imagine taking the collective buying power of the public sector to manufacturers – and then putting those public sector workers in a scheme like ours…”
Nice thought – and one that would certainly be beneficial. Imagine the newly-formed Provecta at number one spot in the FN50 – that would get the attention of a certain J Walden esq at Lex.
I put it to Nick, though, that far from incentivising more efficient cars, ECO schemes actually encourage more polluting cars than those supplied under company car schemes.
It’s a fact, thinks Nick, that the accusations originate more from vehicles in the cash-for-car grey fleet which, he says, can be up to seven years old.
Provecta ECO scheme cars, though, are younger, the oldest typically four years old.
“We also work with companies to incentivise employees into lower-carbon vehicles through the Provecta ECO scheme,” says Nick.
To support this proposition, Provecta has recently launched a three-tier ‘green fleet’ consultancy service called Footprint.
The software assists companies to measure and reduce a fleet’s carbon footprint, as well as improving running costs.
The other issue that concerns me is the complexity of ECO schemes – once in, difficult to get out. But Nick says that a certain amount of upheaval is inevitable if a company is prepared to make a major change in car acquisition policy.
Again, Nick counters that Provecta’s ECO focus is relevant.
“Go to a specialist, not a generalist,” he says. “The problem is that there are 57 versions of ECO in the marketplace and some are quite complex.
But Provecta’s is an arm’s length policy – it’s not a company car by another name.
Drivers can trade up or down, and each driver has their own credit agreement.
“The cars are extremely portable too. If an employee leaves a company, they can take the car with them. If not, the cars are protected by early termination insurance.
"Whatever happens, the firm is not left holding a vehicle that’s difficult to allocate elsewhere.”
Nick reckons that Provecta’s form of ECO can help fleet managers successfully control and drive down CO2, provide a suitable health and safety envelope for cars outside company car schemes, and provide overall fleet running efficiencies.
“We don’t have all the answers for every fleet manager,” concludes Nick.
“But for fleet managers considering the ECO route we can certainly help them. And, as I said before, those companies wanting a broader range of services can now access those through the Zenith arm of the company.”
So, back to my central question: Provecta – an FN50 misfit?
It’s certainly different.
But different – passionately different, even – with a single-minded purpose.
And a resolve to improve and adapt the product to continually make ECO relevant.
Aquisition by Zenith, Provecta is no longer looking from the outside in. It’s a regular member of the FN50 landscape.
Nick Sutton is an amateur jockey.
At the weekends, as he has for the past 25 years, Nick changes into his riding gear and races horses.
“It’s a unique sport,” says Nick.
“There’s a risk involved, of course, but it’s one of the few sports where you, as an amateur, can be sat in the same changing room as a world champion.”
And what about successes?
“I’ve had my moments,” Nick responds coyly. “They’re all sweet.”
The top 10 manufacturers in the Provecta fleet
ECO schemes are a way for user-choosers to exercise their, well, choosing power.
Or so goes the traditional view of ECO schemes.
But Provecta’s fleet is more mainstream than premium – reflecting the fact that many drivers on Provecta’s fleet are work-need drivers.
How does it work?
Employees are given a monthly salary advance which has been calculated on their tax bracket, annual mileage and the company car they would have received.
They can then access a wide variety of new cars at fleet discounts, and are free to upgrade or downgrade according to choice.
Full servicing, maintenance and road tax is included in the monthly fee along with early termination and GAP insurances.
The contract includes a final guaranteed ‘buy back’ residual value.
Employees can keep the car, sell it for potentially more than the buy back, or return it as they would a company car.
Provecta claims its ECO scheme can provide company cost savings of between £800 and £1,200 per car per year over a traditional company car scheme.
Tips from the top
Golden rules for success
Listen to what the customer is saying. Provide them with what they want and not what you want to sell. Perseverance is key, too.
Do you have a company creed?
We have the touchstones of innovation, responsibility, efficiency and good value.
If you weren’t boss of Provecta, what would you be doing now?
I would be more involved in Greenstone Carbon Management, a company I formed two years ago. It helps major FTSE 500 companies prepare strategies to reduce their carbon emissions.
What is the best piece of advice you’ve been given?
It came from an ex-jockey friend of mine – there’s no point in getting older if you don’t get any wiser with it.
In moments of frustration, what do you kick?
Rather than kick anything I usually shut my office down, change into my running gear and go for a long run. That usually works.
What keeps you awake at night?
ECO or company car – what do you drive?
I practise what I preach, so it’s an ECO Volkswagen Golf GTI.