Case study list

Merthyr Tydfil County Borough Council

01/01/2008

Since 1989, the Council's Finance, Audit and Risk Management Department has managed the provision of the fleet, including procurement, leasing and maintenance.

Vehicles were sourced through open competition and a lengthy formal tender process. Aspects of fleet maintenance were outsourced to a private company but when the contract with this provider was due to expire in March 2007, the Council took the opportunity to explore other models for fleet provision.

The Council's research suggested a change to its arrangements would improve procurement processes, generate efficiency savings and reduce risks.

In 2007 the Council decided to adopt a model of fleet provision that involved differing arrangements for running the light goods fleet (less than 3.5 tonnes) and the heavy goods fleet (greater than 3.5 tonnes).

The Council opted for contract hire arrangements in running its light goods fleet. It also decided to purchase a heavy goods fleet with an external company providing maintenance.

Eighty per cent of the fleet administration involved the light goods fleet and the Council therefore hoped to free up considerable resources through contract hire arrangements.

The Council also hoped to reduce the administrative burden and make efficiency savings when procuring heavy goods vehicles by using the all-Wales procurement frameworks.

Benefits of adopting this model have included a significant reduction in maintenance administration. The previous contract with a third party maintenance provider involved a 'pay-as-you-go' arrangement which resulted in Council staff handling large numbers of invoices. The new arrangements involve quarterly payments and clerical tasks have reduced.

Maintenance and repair has become far more structured with staff now having a clearer process to follow for requesting work on their vehicles.

The business case for this approach states that the administrative resources released from adopting the contract hire arrangements for the light goods fleet will result in a greater focus on the Council's heavy goods fleet. The heavy goods fleet poses higher risks than the light fleet and therefore the Council hopes to use this freed resource to better manage these risks.

Through the operation of this approach for five years the business case predicts cumulative 'non-cash' efficiency savings of more than £500,000. In 2007/2008 and 2008/2009 up to September 2008, the Council's approach has secured non cash efficiencies of £143,185 and cash efficiencies £83,268.