Public sector fleets are expected to collectively save millions of pounds of taxpayers’ money by buying vehicles at an average discount of 24% through a new framework agreement.
The agreement, which sets terms and conditions with suppliers, has been compiled by the Crown Commercial Service (CCS), an executive agency of the Cabinet Office.
Billed as the ‘largest commercial arrangement’ in the fleet market for both central Government and the wider public sector, it is anticipated that more than 35,000 vehicles a year will be purchased through it, with a value of some £553 million.
The new agreement runs until December 2017 and offers fleets a standard average discount, before any competition or aggregations, of 24% against the manufacturer’s recommended price. It is based on purchasing one vehicle.
Last year, CCS calculated it delivered more than £110m of savings to the financially-strapped public sector through its various fleet agreements, with more than 32,000 vehicles and 250,000 tyres purchased.
A CCS spokesman said that it was forecast that more public sector organisations would “move across to the new agreement to take advantage of the discounted rates”.
The programme is the official framework through which Government departments procure vehicles. Devolved agencies, such as councils, health departments and schools, can opt to use it or buy elsewhere, but the framework is claimed to be a key indicator as to what are the most competitive products available in the market.
CCS exists to bring together policy, advice, direct buying and the provision of commercial services to the public sector, with the objective of saving taxpayers’ money.
The new agreement also covers the bluelight sector, which includes police, ambulance trusts, Highways Agency, Marine and Coastguard Agency, fire and rescue services and other organisations with specific emergency vehicle specification requirements.
CCS worked closely with UK police forces in the development of the agreement to ensure that, for the first time, it provides the specific vehicle types police forces require. Another new aspect of the agreement is the option to purchase vehicles for use overseas.
In addition to fleet agreements covering vehicle purchases, and the supply and fit of tyres, there are arrangements in place covering vehicle conversion and reconditioning, and other fleet solutions such as the provision of electric charging installations, fuel cards, liquid fuels and also insurance services.
What’s more, a separate vehicle lease and fleet management framework agreement is in place with eight approved suppliers: Alphabet (GB), Arnold Clark Vehicle Management, Automotive Leasing, Inchcape Fleet Solutions, Lex Autolease, Lookers, TC Harrison Group and Volkswagen Group Leasing. It expires in May 2015 and CCS is currently developing a replacement agreement set to be available in late spring.
Separately, the CCS fleet team is looking to offer additional commercial arrangements and market insight as part of its strategy to drive savings across the public sector with a focus on “effective wholelife cost management of fleets”.
The CCS spokesman said: “We believe this can be enabled through transparency of costs, excellent vehicle utilisation and driver behaviour, with telematics data being a key enabler.”
The vehicle purchase agreement provides access to a wide range of vehicles across nine separate ‘lots’ including cars, 4x4s, commercial vehicles, buses, coaches and motorcycles from a total of 41 suppliers, up from 28 on the previous agreement which ran from February 2012.
The spokesman said it promoted accountability by making suppliers responsible for the complete supply chain from vehicle manufacture through to aftersales support.
Previously the police had their own vehicle purchasing framework agreement, which was drawn up by the National Association of Police Fleet Managers (NAPFM) and the National Policing Improvement Agency. The last four-year agreement expired in October last year.
Dennis Ord, NAPFM chairman and head of transport at Surrey Sussex Joint Transport Services, welcomed the new CCS agreement, calling it a “joined-up approach to vehicle purchasing”.
“The new agreement aggregates volume without distracting from the particular requirements of the police and other emergency services,” said Ord, which, he agreed, could translate into improved purchasing terms for bluelight fleets.
The agreement also supports the uptake of low emission models, as it is underpinned by the European Clean and Energy Efficient Vehicles Directive, which helps organisations meet sustainable procurement measures.
For example, it suggest that new cars have an average CO2 emissions figure of 130g/km or lower, and vans up to 3.5 tonnes meet Euro 5 emission standards.
It also delivers to public sector fleets the opportunity to take part in e-auctions, managed by CCS, to potentially benefit from further savings.
The first online auction of the year has just taken place, with a further scheduled for the week commencing June 29, 2015.
The CCS spokesman said: “Fleet customers with vehicle requirements are encouraged to take part in e-auctions, which standardise specifications and aggregate volume, and will help them achieve further savings against the already discounted agreement prices.”
Vehicle manufacturers that win a place on the framework agreement view them as hugely valuable in boosting fleet sales.
For example, Hyundai has secured a place on three ‘lots’ on the new agreement – cars including 4x4s, light to medium commercial vehicles and bluelight cars including 4x4 variants.
The new remit follows a successful four-year tenure for Hyundai as a supplier to the previous CCS and the NAPFM framework.
Hyundai started selling cars to police forces in 2010, with a modest total of 41; within a year that soared to more than 350, and it now tops 600 a year.
Hyundai fleet director Martin Wilson said: “We have supplied some 2,250 cars to bluelight customers during the past four years and this new agreement should see that figure rise again.
“The emergency services are discerning and demanding customers, and rightly so when lives may depend on vehicle reliability and flexibility. With these high-profile customers using our vehicles, it acts as a powerful recommendation to potential buyers.”
Denis Watling, Hyundai’s public sector assistant manager, added: “We're confident that our well-known five-year/unlimited mileage warranty, dedicated fleet and aftersales teams and award winning line-up of products will continue to prove as popular with police forces and other public bodies in 2015 and beyond.”
Meanwhile, Peugeot has achieved a place in the same three ‘lots’ as Hyundai and the bluelight commercial vehicles ‘lot’.
Last year Peugeot achieved a more than 10% market share for CCS.
Martin Gurney, fleet and used car director, said: “Sales to local authorities, police forces, public sector agencies and government departments remain a significant element of our corporate business.
“Public sector sales is a field in which Peugeot has always excelled, but this news is confirmation that we have the right products and the correct fleet strategy in place.”
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