Tony Greenidge, sales and marketing director at Fleet Operations, looks at the the real questions fleets should be addressing.

The Chancellor George Osborne delivers his eighth budget on Wednesday and he does so facing a completely different economic outlook to the one he set out just a few months ago.

The OBR recently revised 2015 UK growth down from 3.5% to 2.6% creating the £18bn black hole that is now giving the Chancellor very little wriggle room.

There is a sense that he will use this budget to simply tread water and provide a little something for everybody, but for many financial analysts it is the EU Referendum that really holds the key to determining the UK‘s short to medium term economic prosperity. 

When you look at the detail behind the headlines it would suggest that business confidence is fragile and unlikely to improve in the short term so rather than reacting to events, there has never been a more vital need for businesses to have a plan as to how best to manage this top 3 category spend.

Regardless of the Budget or Brexit, the current and forecast economic climate creates a number of questions that UK fleet decision makers should be addressing today:

• The importance of fleet optimisation from a policy and operational perspective has never been more relevant. Businesses should be asking what a fully optimised fleet worth, how quickly can you quantify this value and how do you review the opportunity?
• High quality staff are needed to win/retain new/existing clients so in lieu of modest wage increases the company car has reclaimed its position as a key recruitment/retention motivator. Businesses should be asking if their fleet policy underpins the wider goals of their business and trading conditions of the markets in which they operate.
• Motivated staff are vital if businesses are going to compete, restructuring fleet policy to deliver savings and retain employee engagement should form the basis of any fleet review. How do key decision makers access impartial advice that is solely in their best interests?
• The erosion of the traditional Fleet Manager role and the fact that an average of 5 key stakeholders are involved in any major fleet decision means that businesses are not as nimble as they might need to be in order to identify and implement change. Fleet decision makers should ask what internal/external resource is available to help manage the varying fleet interests of HR, Procurement, Finance, Fleet and Health & Safety departments within the business?
• Like all commercial arrangements the devil is in the detail and many fleets are missing out on opportunities to deliver tangible commercial benefits within their existing fleet arrangements. Fleet decision makers should ask who is responsible within the business for checking the operational delivery and “in-life costs” against the agreed contractual terms and conditions?

With the wealth of options available there has never been a more important time to design a fleet policy that can withstand the potential impact of a slowing economy. Fleet contracts tend to mirror replacement cycles - i.e. 3 to 4 years -  which is a significant commitment to any product/service where there is no guarantee or certainty of costs. The best one can hope for is that there are mechanisms in place that help control the natural variances that might occur during the contract period. Fleet decision makers should ask what processes are in place to monitor and control my fleet costs over a 3-4 year period.