Fleet News

Nexus criticises public sector waste

Vehicle rental management business, Nexus, has hit out at Government waste in procurement, management and use of vehicle rental.

Neil McCrossan, CEO for Nexus believes there is a serious lack of execution on the ground when it comes to managing vehicle rental and mileage allowances.

“I know about the vehicle rental industry; I have been involved in it for 30 years so I believe I am well qualified to comment on the waste and inefficiencies I see in this area,” he said.

“Across Government, hundreds of millions of pounds are spent every year on vehicle rental and the payment of private mileage allowances to staff using their own cars on Government business. However there is no overall control and coordination of this spend.

“It seems that every arm of local and national Government, all the emergency services and the military each run their own tender exercises. A major commercial operation would not allow all its individual departments to tender for the same service separately, so why does government?

“Some of the tenders issued by Government are for contracts worth millions of pounds per year. However the majority are much smaller contracts. The Government is not only wasting money running inefficient tender exercises, it is also failing to capitalise on the savings to be made from consolidating its spend and providing an efficient access route for Government users to plug into.

“I strongly believe that to maximise efficiency, this activity could all be brought together into a single procurement exercise and accessed through a single portal available to all Government users. Every rental provider could participate in – and benefit from – this approach.

“What I see in vehicle rental, I have to believe is true in other areas of Government procurement and I believe that it’s wasteful, inefficient and the country cannot afford it. For example, I know of a Government rental contract currently where over 40 staff are used to manage the provision of rental vehicles. As taxpayers we are paying for that. Using services and systems that already exist, that contract could be run by 10 to 15% of the present headcount.”

At a time when the government has made it clear that savings have to be made, Nexus urges it to cut back-office functions that can be easily and more cost-effectively serviced by specialist suppliers.

McCrossan also highlights the need for the government to tackle the costs associated with grey fleet usage and offers an easy solution.

“Nexus has pioneered a system that allows users to input business mileage and the type of vehicle to be used and the amount paid per mile. This then compares the cost of a staff vehicle, to rental costs. If rental is cheaper, the user can simply press ‘use rental’ to book a vehicle from an approved supplier. It’s an incredibly simple and cost-free tool that could save millions. But Government buyers want to consider it and review it again in 6 months, hiring consultants to produce feasibility studies. We need decision-making and action.

“My concern is that despite the proclaimed desires, from David Cameron down, to tackle the deficit, that message simply isn’t being applied to many of the processes that exist in Government. We have to ask ourselves, who’s job is it to see that Government at all levels really engages in the new thinking and new approaches necessary to cut out this dreadful level of waste and inefficiency."

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