How hire can lend a helping hand
Uncertainty over funding levels is forcing councils to find new ways of managing their fleet operations. Paul Wood looks at how contract hire could help in this respect
Councils have traditionally adopted a fragmented approach to fleet provision with individual transport and fleet managers, specifying their own departmental fleet requirements according to their objectives. Increasingly they are now devolving the process of sourcing complex vehicle provision to an already understaffed procurement department, which is more geared to sourcing supply for commodity items.
As staffing levels look set to be decreased even further, a real possibility exists that these overworked procurement teams will start to adopt the same procurement practices for all items they procure. However, local authority procurement teams don’t always have the specialist operational knowledge necessary to understand what is required of the vehicle.
Clarification is needed
At TransLinc we often have to clarify a customer’s specifications and requirements to make sure the vehicles are equipped to do the job properly. This technical knowledge has a value, which isn’t taken into account in a ‘lowest price wins’ tender situation. Councils need to take a real look at how services are delivered to their end users as the model of service delivery that has worked for them for the past 50 years is ripe for change.
A good indicator that authorities are starting to give serious consideration as to how they operate their services in the future is the current upturn in hire period extensions and the increased use of short term and spot hire, while they wait out the impact of government changes and consider their next move.
But we are still seeing, when faced with having to cut budgets quickly, councils putting greater emphasis on reducing the front-end cost of vehicles through specification change, without taking into account the fundamental impact of these specifications on service delivery. The result can be vehicles that are not fully suitable for purpose, and that means greater VOR, higher maintenance costs and a negative impact on end user services.
Holistic approach is best
In today’s climate, there should be a move towards a holistic approach with fleet provision across all departments – and even between councils – considered, also taking into account the infrastructure and staffing required to operate services.By consolidating their fleet requirements in this way councils can make significant long-term savings, without impacting the quality of their services.
We encourage our clients to look at this wider picture and the larger hidden costs that a fleet operation will incur. We see the vehicle as just a single element of the overall service provision offered by the council – the tool that does the job. But the infrastructure that supports the vehicle and keeps it operating also needs to be acknowledged and assigned a value.
From our perspective, the more rigid the tendering process, the harder it is for the council to innovate a solution which meets their service objectives. The more flexible the tender requisites are, the greater chance we have of developing solutions that ticks all the boxes for the council. We are starting to notice a trend towards full service provision, with councils looking to consolidate suppliers, services and the internal resources that support them across a range of operational areas that traditionally would not have worked together.
Vehicle contract hire offers local authorities the opportunity to outsource some of the costly elements of infrastructure associated with this joined up provision, such as accident management, driving licence checking, KPI (key performance indicators) reporting and technical expertise to the vehicle provider. By way of example, we believe we are the only contract hire company to both provide vehicles and operate them on behalf of the council.
To councils taking our passenger services, we provide passenger carrying vehicles including accessible vehicles, drivers, passenger assistants, staff training, route optimisation and vehicle maintenance. We also operate a courier service that also includes vehicle, drivers and maintenance.
Staffing solutions is a big part of what we do and is equally as important as the vehicles themselves in maintaining continuity of service. We are also working with neighbouring councils on potential initiatives to enable the sharing of staff, services, vehicles and support resources.
The future for council service provision has the potential to be different and interesting. I believe that only those contract hire companies that can step up to the mark and offer a whole bundle of services will flourish in the tough times ahead. They need to have the expertise and resources to do everything – planning, operation, IT and vehicle provision and maintenance – that is required to support the council in delivering its objectives.
Paul Wood is managing director of TransLinc