Cutting Down On Grey Fleet Mileage: A Case Study
Nearly every company or business will have a ‘grey fleet’, made up of employee-owned vehicles that are used for business-related purposes. It’s an enormous, yet sometimes overlooked, asset. But as with many assets, it also comes with a significant amount of responsibilities. As an employer, you have a duty of car to your staff and the community. Constant license, MOT and insurance checks can place strains on your HR and admin teams. The larger the fleet, the greater amount of risks are present. Fundamentally, businesses are looking to diversify and reduce grey fleet mileage; this can be easier said than done. However, the following case-study proves that it can be reduced and effectively with focus and determination.
Norfolk Community Health & Care NHS Trust (NCH&C) is responsible for delivering care to over 90,000 patients in a variety of environments; including in medical centres, private homes and places of care. This naturally means that its large pool of staff are often necessarily itinerant, clocking up significant amounts of business mileage. In 2017, the NCH&C were awarded the ‘Smarter Travel’ reward for significantly reducing their grey fleet mileage. Here’s how they did it…
Diversifying Travel Options
The Trust introduced an official travel policy five years ago in 2013. This followed extensive union negotiations and thorough staff consultations. It was important to ensure that the policy was discussed, debates and promoted to ensure that it was agreeable and functional for staff members; after all, they are the grey fleet. The policy effectively encourages staff to use a lease car (a company car) if they accumulate more than 3,500 business miles a year; moving them from the grey fleet to the business fleet. Should they travel less than 3,500 miles they’re encouraged to join an ongoing pool or rental scheme. Staff are required to fill out an annual ‘Travel Assessment Form’ which allows management to determine whether their mode of transport is suitable based on their mileage.
As of 2018, the Trust has 77 lease cars, 33 salary sacrifice cars, 1 car share and 32 pool cars; daily rentals are used as required.
Promoting Pool Car-Usage
For purposes of promoting pool car usage, the Trust has worked to develop an on-going partnership with Enterprise Car Club. Telematics are used to record each driver’s mileage and to determine how much the vehicle has been used in relation to the time it’s been booked for. This helps to prevent needless expenditure and, on occasion, helps to identify better alternatives based on an employee’s needs.
As a part of the Trust’s strategy, actively discouraging grey fleet mileage is incorporated into the travel policy. At the heart of this is comprehensive monitoring of mileage itself. An online system called ‘Mileage Count’ is used. This can be used to approve and pay for grey fleet mileage at different rates (greatly reducing admin time). Rates are based on the following: Employees who travel less than 3,500 miles receive a rate of 28p per mile. This is lower than the HMRC suggested rate of 45p per mile but remains compliant with the government’s Agenda for Change Ts & Cs. Should an employee decline to use a lease car, they’re offered 56p per mile up until 3,500 miles travelled. Then on, they’re paid 20p per mile.
The system requires the use of postcodes and a justifiable reason for each journey taken, this prevents mileage fraud where employee’s round up or exaggerate their mileage. It also allows the Trust to develop a thorough understanding of its grey fleet and its staff’s travel. The Trust uses an expense system in conjunction with this called (e-Expense). This system integrates with the Trust’s payroll software. So far, this has allowed for greater amounts of automation, gathers additional data and has reduced costs; so far, it’s thought to have saved around £40,000. Finally, the Trust uses GMP DriverCare to handle all duty of car-based operations, making sure its obligations to staff are met.
How It Worked
As a result of its bold travel policy, the Trust has saved around £500,000 in two years alone. It’s also made significant progress in reducing carbon-based emissions and improving its risk management operations. Grey fleet mileage has fallen far more than lease, pool and rental car mileage has increased. Fewer miles are being travelled and, when they are, newer, less-polluting and better maintained vehicles are used. Staff mileage has been reduced by an impressive 25% on average and without any negative consequences for the quality of service being delivered.
Between 2015 and 2017, the policy meant that:
– Grey fleet mileage fell by 19% (752,000 miles)
– Company car mileage increased by 42% (202,000 miles)
– Mileage in pool and rental cars fell by 19% (73,000 miles)
– Total mileage decreased by 13% (623,000 miles)
– Total spend on travel fell by 13%.
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