Vehicle Servicing Best Value Review

Background

This review has taken a considerable period, during which significant measured improvements and economies have been established in a service which was one of those heavily challenged by the transition to single tier local government. The Manager has both completed the action plan and is actively involved in pursuing further benchmarking, method improvements and sound customer reporting.

Service Summary

Before detailing the Best Value review and the range of improvements identified and implemented, it may be helpful to provide a brief description of the services provided.

Vehicle Maintenance services maintain a fleet of approximately 310 vehicles and plant items. Services provided include scheduled servicing, vehicle repairs and breakdown / recovery services.

Vehicle Maintenance costs are recovered mainly through an hourly rate which Fleet Management pays on behalf of customers. Materials including fuel and tyres are recharged at cost price plus a percentage to cover overhead costs.

Fleet Management services provides management and administration for the fleet. Services provided include receipt and preparation of vehicles, licensing and insurance, MOT and service scheduling and acting as client in overseeing vehicle maintenance provision.

Fleet Management costs are recovered from customers using an annual charge per vehicle. The charge is banded according to vehicle type.

Vehicle Services is a function that fell within the scope of CCT legislation. Following the introduction of the suspension of Compulsory Competitive Tendering (CCT) by the present Government and the introduction of Best Value, the further application of tendering to Vehicle Services was halted to await the outcome of the Best Value Review. Many of the trading arrangements and charging structures are inherited from CCT and are based on a schedule of rates specification.

Management Arrangements

During the course of the Best Value Review, Environmental & Contract Services proposed to tackle the client / contractor legacy from CCT. Within this the Head of Service responsible for a range of Environment & Engineering Contracts Units retired in March 1998. This called for some restructuring of duties whereby Fleet Services, both Client and Contractor elements, were combined with Property Contracts under the overall management of a redesignated Fleet and Property Contracts Manager. The integration proceeded, but care was taken to maintain a distinction between client and contractor following a recommendation made by the external auditor as part of the Management & Financial Controls audit for DLOs and DSOs. Some savings arose as a result of these changes. This was reflected in reduced Vehicle Maintenance overheads.

Benchmarking

Vehicle Services was initially compared with ABC Benchmarking Partnership authorities. These were:

East Lothian Council
Midlothian Council
East Renfrewshire Council
Perth & Kinross Council
Tayside Contracts.

Indicators selected for comparison included:

Hourly labour rates
Fleet management charges
Productivity rates
Vehicle availability
Insurance costs and arrangements
Fuel costs
Stores arrangements
Fleet management arrangements.

Benchmarking took a considerable amount of time to complete. The Fleet Services Manager has started a new benchmarking project comparing performance with both Scottish and English local authorities under the auspices of the Association for Public Service Excellence (APSE). The results of this later benchmarking exercise have just been released. The Fleet Services Manager is currently evaluating the information and potential impacts on the Service. Comparing with English authorities has proved useful as they have much wider exposure to the private sector. The information therefore can be seen as truer test of competitiveness.

Vehicle Maintenance has proved much more straightforward than Fleet Management. Both data and better practice comparison have been completed and acted upon in respect of Vehicle Maintenance. Comparison of Fleet Management proved extremely difficult within the ABC benchmarking project although it is to be hoped that the APSE exercise has resolved this.

Charging Arrangements

The way in which Vehicle Maintenance and Fleet Management currently charge users for services is outlined in the Service Summary above.

Existing charging arrangements were tested with service users. For the most part service users expressed their satisfaction with and comprehension of existing charging arrangements. They did however ask that charge information be provided more regularly and asked for better clarity concerning Fleet Management charges.

As a result of user feedback and also following benchmarking the Fleet Services Manager has implemented the following measures:

Distribution of a monthly report providing clearer and cumulative information on charges for service users.
Trial of central fleet management and lump sum charging. The basis for lump sum charging is that known vehicle maintenance work, such as servicing, is costed for the year and then recovered from service users in 12 equal monthly amounts. The results from the one-year trial period will be available shortly. Judgements concerning potential wider implementation will be based on the success of the trial of the overall package of central fleet management.

Customer Views

Vehicle Services were already accountable to a Service User Group prior to the Best Value Review starting. This seemed to be an obvious body to engage to focus on customer issues and views.

A short questionnaire was developed and distributed to the Service User Group. All but one of the questionnaires was completed and returned. The main issues raised were those discussed at paragraph 4.2. The Fleet Manager’s response is as outlined at paragraph 4.3.

Customers’ views have been taken account within the development of wider solutions such as the evaluation and trial implementation of central fleet management arrangements. Benchmarking evidence has also led to the implementation of customer oriented changes.

Service Improvements & Key Recommendations

New non-HGV Servicing regime introduced resulting in a reduction of 25%. Savings have been passed onto service users. The Fleet Services Manager intends to further investigate the potential for servicing savings for both non and HGV vehicles. This follows initial analysis of ADLO benchmarking material. This will require discussion with the Department of Transport regarding their recommended servicing regime for Heavy Goods vehicles.

The trial of central fleet management and lump sum charging will conclude shortly. It is anticipated that the Fleet Services Manager and the Executive Director of Environmental & Contract Services will report the findings of the trial and any potential full implementation of these arrangements.

New IMPRESS stores system introduced. This places the onus on suppliers for re-stocking vehicle parts and material. For the range of items included within this scheme additional discounts of up to19% have been realised and stock levels have been reduced by up to 80%.

Diesel fuel procurement has been greatly improved resulting in reduced emissions of up to 98% and after recent budget changes the Council pays 4% less on fuel tax.

New risk assessment procedures and driver assessments have been introduced. This will result in reduced insurance premiums and the insurance excess limit being raised to £500 resulting in fewer claims. New procedures have been agreed with Personnel and the Joint Trades Union Committee.

Former District and Regional Council vehicle maintenance hourly rates have been harmonised.

A new monthly cost breakdown / report has been introduced to provide service users with more regular and better information.

Conclusion

After some difficulties in the early stages, it is fair to conclude that this review reflects a creditable and continuing commitment to improvement in public service.