Recycling and waste management specialist Biffa has scrapped its tiered company car structure in favour of an approach where all eligible staff, including executives, are offered either a VW Passat Bluemotion or a £4000 annual cash-for-car allowance.

“Cars come with a big emotional attachment in this country, but in the current economic climate I think it’s a cycle more businesses will look to break,” said Biffa’s director of environment and external affairs David Savory. “We had in the past an extra generous scheme and it became more generous over the years, but it’s not possible in the current climate.”

He admitted the move is largely financial, “with some green space”, as the company has elected to run low-CO2 Bluemotion versions of VW’s Passat. The 105PS 1.6-litre models have emissions of 118g/km and an average economy of 62.8mpg. “It will have a big impact on fuel usage and CO2 emissions,” said Savory.

He did admit that senior management aren’t all happy with the change, as they had previously been entitled to cars such as a BMW 5-series or Audi A6, but for many junior staff the Passat is a step up. “There are mixed feelings and there will be a bedding-in period,” said Savory.

Currently, around a quarter of the 600 staff entitled to a car take the cash allowance, and Savory said it’s too early to predict if that figure will change.

But the news came as lease company Hitachi Capital Vehicle Solutions warned companies against making snap decisions about their fleet policies.

“A blanket change to a company’s fleet policy could have a catastrophic effect on its ability to retain top executive talent, in addition to leaving the business more vulnerable to risk from the grey fleet,” said Phil Peace, Hitachi’s director of sales. “If a cash allowance is offered as an alternative, it’s extremely likely that the company will see a considerable rise in its take-up.” That has an impact in terms of company control over maintenance, servicing and compliance.