The total public sector fleet size could fall by up to 15% over the next three years according to ING Car Lease – but the firm warns that a move away from professionally managed fleets towards grey fleet could sow the seeds for longer term problems.

“While a one-off saving may be tempting, it is important to consider the whole cost of the fleet – rental, National Insurance Contributions, fuel and insurance,” said ING Car Lease’s national public sector manager Clive Buhagiar. “A robust cost analysis will also consider elements such as pay increases to compensate for the lack of a company car, training costs for new appointees if staff retention is affected, and the administration costs required in ensuring all expenses and mileage is paid correctly.

Buhagiar also warned that under EU Directive 2009/33 public organisations have an obligation to consider the environmental impact of their vehicles. When drivers come out of company cars, they tend to switch to older, less efficient and less well-maintained vehicles.

“It is not surprising that, in this time of austerity and cost-cutting, the public sector is re-evaluating its relationship with professional fleet management companies,” said Buhagiar. “However, many of these organisations, which are currently considering de-fleeting, may not have considered the knock-on effects of the move.”

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