Fleet News

Time to consider how Government will try to balance the books

Paul Hollick, chair of the Association of Fleet Professionals (AFP)

Paul Hollick, chair of the Association of Fleet Professionals (AFP)

Let’s start by stating something obvious, but true: the fleet industry of today is already very, very different from that of just a few months ago, to a degree that would’ve looked unimaginable even at the beginning of spring.

What has changed? A whole lot – but to summarise, company car use has plummeted as homeworking and video-conferencing have become the temporary norm, commercial vehicle activity has become concentrated around online and essential services, commuting has decreased and commuters themselves are moving in large numbers out of trains and buses into cars, while new vehicles have become often quite difficult to acquire and selling older ones isn’t too easy, either.

There’s obviously more but, frankly, we could use up the whole page.

How does all of this affect the relationship between the Government and fleets? Well, in a lot of ways, it simply means that the taxation and policy measures in place now were designed for a quite different world. While some remain appropriate, others look decidedly out-of-date.

Probably the most obvious is benefit-in-kind (BIK) taxation. There is a strong ethical argument for this to be reduced or suspended while car use remains at its current level.

Another point to consider is electric vehicles (EVs), where supply has slipped by at least six months and possibly longer, making adoption difficult for many users and promoting a need to extend the current 0% BIK taxation incentive. Also, some kind of managed process for shifts in commuting would be welcome, ensuring workers don’t just move into cars, but adopt other forms of transport – from shared mobility to e-scooters – as well as staggering shift patterns to minimise congestion.

What else would it be useful for fleets to see?

On a practical level, it’s fair to say that, while most people are sympathetic to the difficulties the Government faces in having to construct crucial policies to handle the coronavirus crisis in something approaching real time, it would be good to see increased clarity around social distancing and vehicle use, especially to cope with circumstances such as local lockdowns or potential second waves.

It would also be very positive to see targeted economic activity, of the kind seen in other sectors, to alleviate some of the specific problems that are affecting fleets, especially service support companies having to pay overheads while their income remains limited for the foreseeable future. We hope to see more of this kind of action from the Chancellor.

Of course, there is a very strong possibility that the concerns of fleets will be swept aside by what the Government would view as macro-economic necessities. This is an administration that has promised to set aside austerity, but has just borrowed truly enormous sums to fund its emergency programmes.

There is a good chance something will have to give and that we will all face higher taxes, fleets and their drivers included.

However, within all of this, we should not lose sight of the fact that this moment also provides an opportunity for huge and positive change. What we have just learnt is that people and businesses, in the right circumstances, can adapt very quickly.

We’ve already seen rapid digitisation across the sector and, with the right approach from legislators, everything from electrification to cycling to mobility could make rapid inroads in the near future.

Whatever happens, through the recently formed Association of  Fleet Professionals (AFP), we are aiming to make our industry heard and to influence future policy.

If you have views that you would like to add to our discussions, we would be very pleased to hear from you.

A Fleet News webinar: WATCH NOW

The impact of the COVID-19 pandemic on fleet operations and business travel

Sponsored by Sixt.

A discussion hosted by Fleet News on the UK business response to the fleet challenges presented by Covid-19. 

A panel of experts will provide an insight into the trends and changes that they are seeing, before leading a debate and discussion among participants, including delegates, on future working practices, changes to travel policies, opportunities offered by mobility solutions and implications for fleet sizes, replacement cycles, funding methods and vehicle type.

Watch the webinar

Chaired by editor in chief Stephen Briers, in this 45-minute webinar, he will be in conversation with:

  • Dale Eynon is director of Defra Group Fleet Services and will give a fleet operator view of how covid-19 is affecting fleet operations
  • Kit Allwinter is senior consultant at AECOM and is a specialist in sustainable and active travel including shared mobility. He will provide a view on how Covid-19 is changing the way people travel and business working practices, etc. and the implications for travel and fleet activity, especially in urban areas
  • Paul Hollick, chair of the Association of Fleet Professionals. He’ll be representing the views of UK fleets, providing insight into how their operations are likely to evolve and change due to new working practices sparked by the coronavirus pandemic.
  • Simon Turner, campaign manager at Driving for Better Business, which has created a Covid-19 toolkit, driver app and management portal to help fleets back to business.

  • Stuart Donnelly, Sixt (sponsor)

Topics:

• Changes to working practices (agile/remote/office working)

• Changes to travel policies (travel to work, travel to client, travel to supplier etc)

• Implications for fleet size (new car/van sales demand)

• Impact on replacement cycles (new car sales demand) and annual mileage

• Impact on demand by vehicle type (EV, Hybrid, Petrol, Diesel)

• Changes in funding preference (fewer traditional 3-4-year contract hire lease agreements and more flexi-hire contracts?)

• Active travel policies (walk, cycle, other)

• Public transport policies (to work, at work)

• Role for other mobility preferences (car share, car clubs, mobility budgets)

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