Cost pressures being brought to bear on the public sector are set to change the way fleets operate. Within three years, the public sector lease market will look very different, according to the man heading LeasePlan’s public sector division Automotive Leasing.
Stuart Walker says local authorities and other public sector fleets will be forced to address grey fleet, taking action to reduce the number of their employees that drive their own cars for business purposes.
He also anticipates some downsizing of public sector fleets, leading to fewer lease cars, but predicts that many organisations will look to outsource their operations. For leasing companies, profitability from the public sector is likely to rise as a result.
Downsizing fleets runs counter to a policy of reducing grey fleet mileage – take away a company car and the chances of an employee now using their own car for business rises - but Walker believes salary sacrifice could provide the solution.
“It’s an enhanced benefit as well as not affecting the front line service – and it solves the cost issue,” he said. “With many companies already offering salary sacrifice in other categories, such as child care, we pitch it as another option.
“It’s possibly a halfway house between a company car scheme and the grey fleet.”
While much of the restructuring will affect local authority fleets, Walker also points to changes within the NHS and central government.
“The NHS is meant to be ringfenced. However, with the changes in management with GPs procuring services, who knows what will happen,” he said.
“Central government is different again. It’s bigger and more complex and while there is outsourcing to varying degrees, it’s an area where the big savings can be made.”
Walker believes centralised procurement offers the best option for government fleets (a project is already underway to identify the best approach, which is due to conclude in June).