Atodiad / Appendix 1

POLICY & RESOURCES SCRUTINY COMMITTEE

TASK & FINISH GROUP FINAL REPORT

RESPONSE TO CLIMATE CHANGE –

FLEET MANAGEMENT

TABLE OF CONTENTS

SECTION

PAGE

CHAIR’S FOREWORD

3

BACKGROUND

4

OBJECTIVES & SCOPE

4

APPROACH

5

KEY FINDINGS

6

RECOMMENDATIONS

18

1.0 CHAIR’S FOREWORD

2.0 BACKGROUND

2.1 In September 2008, the Policy & Resources Scrutiny Committee resolved to undertake a review of the fleet management service with a view to supporting the Council in achieving its aim of reducing its overall CO2 emissions from transport by 10% over three years.

2.2 This review represents the third task and finish group review undertaken by the Policy & Resources Committee in response to the Climate Change agenda, having previously undertaken reviews on the ‘approach to energy efficiency in public buildings’ and the ‘management of staff and member travel’.

2.3 The service provides a fleet management service at 3 workshops. It provides purchase and lease options for internal user departments.

2.4 It has the 4th largest local authority fleet in Wales with territory covering some 9,000 square miles. The fleet comprises of some 623 vehicles including refuse vehicles, gritters, vans, gully emptiers and education vehicles. These vehicles cost in the region of £6.9 million to run.

2.5 The carbon footprint of the current fleet of vehicles is estimated to be in the region of 5,225 tonnes of CO2 per annum.**

3.0 OBJECTIVES & SCOPE

3.1 Objectives

3.1.1 To review the management and operational practices of the fleet management service with a view to improving the environmental efficiency of the service, and where possible also deliver financial savings for the Council.

3.1.2. To review policies and procedures to support the effective and efficient utilisation of the councils fleet of vehicles.

3.1.3 To review the procurement and use of fuel for use in council vehicles.

3.1.4 To identify best practice within other local authorities, public bodies and private sector providers.

3.2 Scope

4.0 APPROACH

4.1 The Task & Finish Group was established in October 2008.

4.2 The terms of reference, scope and membership of the review was agreed by the Policy & Resources Scrutiny Committee at its meeting in November 2008.

4.3 The membership of the Group consisted of:

4.4 The Scrutiny & Consultancy Unit within the People Management & Performance Division assisted in the coordination and planning of the review process.

4.5 The following officers were also asked to act as specialist advisors to the Group:

4.6 A range of internal and external participants were invited to give evidence to the Group over a series of meetings between November 2008 and March 2009.

4.7 Site Visits were undertaken to Trostre Depot and Connaught Engineering.

5.0 KEY FINDINGS

Strategy

5.1 A Wales Audit Office Review of the Councils Fleet Management service conducted in 2008, identified that the Council ‘had a clear strategy for fleet management’ which included a fleet replacement programme.

5.2 The key strategic challenges identified by the service during the course of the Task & Finish Group review include:

Educating the workforce – Educating staff and clients.

5.3 The Council’s Climate Change strategy identifies specific priorities for transport including fleet management, and a number of these issues will be explored in more detail as part of the review.

Vehicle Procurement

5.4 The Council’s approach to the procurement of its fleet of vehicles is based on the key principles of ‘identifying the correct vehicle to the needs of the client, balancing the need to achieve the most economical whole of life cost rate whilst at the same time demonstrating a commitment to the environment’.

5.5 Procurement decisions are based on cost calculations for vehicle selection and financing, using whole-life costing information and an analysis of technical compatibility with the service operating environment. The service has done a considerable amount of work over the course of the last few years to embed whole-life costing principles into its fleet procurement processes.

5.6 Extensive consultation is undertaken with each department about the method of provision for each procurement exercise to ensure that all methods of fleet provision are considered.

Vehicle Specifications/ Technology

5.7 The majority of the vehicles within the fleet are diesel, but the service is looking at the use of hybrid vehicles in limited applications e.g. the light commercial van fleet. The use of LPG fuelled vehicles is not considered to be a viable option as it leads to a deterioration in the environmental performance in terms of CO2 emissions when compared with a diesel powered vehicle. CO2 emissions from LPG engines will always be higher than for equivalent rated diesel engines due to the higher thermal efficiency of the diesel engine.

5.8 The profile of the fleet within Social Care also demonstrates the difficulty of trying to balance fuel efficiency with overall whole life costing and service need issues.

5.9 As part of its accident reduction strategy, the service has started to remap vehicle engine management systems to limit the speed of vehicles – 20 vehicles have already been adapted. The voluntary fitment of speed limiters to other light commercial vehicles can also have a positive effect on fuel usage. The Council is also looking to ensure that speed is restricted to a maximum of 60mph for all newly procured light commercial vehicles and vans as part of the vehicle specification.

5.10 During the course of the Task & Finish Group review, the service was participating in a pilot involving the use of new technology, aimed at improving the fuel efficiency of vehicles.

5.11 The carbon reduction technology being piloted by Connaught Engineering System involved the use of capacitors to charge an electric motor to provide an initial burst of energy in order to limit fuel use as vehicles move off from a standing start. The potential fuel savings through the use of this technology was reported to be up to 15% (manufacturer estimate).

5.12 However, in order to break-even on the investment (£3,500), a typical council vehicle covering 12,000 miles per annum would need to deliver a 23.89% fuel efficiency. Also, at that point in time, the system was only available for certain types of vehicles (e.g. Transit vans).

5.14 Carmarthenshire was the first local authority in Wales to engage with the company in relation to the fuel efficiency system.

5.15 The pilot trial proved to be very successful, with initial tests showing a 34% fuel saving on the pilot vehicle. However, it must be emphasised that this was only a two day pilot and was not a representative sample of the fleet in terms of driving performance, vehicle load or operating conditions.

5.16 A bid has been submitted for grant funding to support the installation of this technology on vehicles as part of an extended pilot.

5.17 The service has also participated in a pilot in the use of magnet technology over an extended period. The ‘Magno-Flo’ technology involved the use of magnets, which when applied to the fuel supply line, realign the carbon molecules allowing the fuel to burn more efficiently and at the same time reducing the build up of carbon deposits within the engine and harmful emissions from the exhaust pipe.

Tables 3 and 4 (below) are used to show the range of results achieved during the six month trial. The “outlying” vehicles have been removed from the table.

Vehicle Type

MPG - Pre Magnoflo

MPG - Post Magnoflo

% Difference

Initial Observation

Ford 280 Panel Van

30.41

33.14

8.98%

Good

Vauxhall Vivaro panel Van

34.51

36.65

6.20%

Good

Mercedes 511 Sprinter

16.13

17.04

5.64%

Good

Mercedes 511 Sprinter

19.44

20.16

3.70%

Good

Vauxhall Vivaro panel Van

31.25

32.14

2.85%

Negligible effect

Vauxhall Astravan

48.98

50.29

2.67%

Negligible effect

Mercedes 511 Sprinter

21.31

21.80

2.30%

Negligible effect

Mercedes 511 Sprinter

15.78

16.06

1.77%

Negligible effect

CitroŽn Berlingo

37.07

37.70

1.70%

Negligible effect

Ford 280 Panel Van

21.12

21.40

1.33%

Negligible effect

Mercedes 511 Sprinter

17.54

17.65

0.63%

Negligible effect

Vauxhall Astravan

49.07

49.35

0.57%

Negligible effect

Vehicle Type

MPG - Pre Magnoflo

MPG - Post Magnoflo

% Difference

Initial Observation

Dennis Eagle Refuse Truck

3.39

3.56

5.01%

Good

Dennis Eagle Refuse Truck

4.03

4.18

3.72%

Good

Dennis Eagle Refuse Truck

1.99

2.05

3.02%

Good

7.5tonne Caged Tipper

11.91

12.00

0.76%

Negligible effect

Mercedes Skip Truck

9.60

9.28

-3.33%

No effect

5.18 During the time of the Task & Finish Group review; Carmarthenshire was the only council in England and Wales to trial the product.

5.19 The ‘Magno-Flo’ technology costs in the region of £300 a unit (£60 for a small van). The ‘Magno-Flo’ technology is claimed to achieve a 12-14% improvement in fuel efficiency. It was also claimed to be effective on a range of vehicles. Generally the product has not delivered the level of efficiency claimed but it has shown there is some scope to deliver efficiency.

Use Bio-Diesel

5.21 The service has in the past undertaken limited trials of bio-fuels and currently uses a 5% mix, blended at the refinery. The 5% blend is the maximum level that most vehicle manufacturers will continue to honour warranty arrangements and maintenance frequencies.

5.22 A trial was also undertaken on a manually blended Bio-Diesel, however deterioration in fuel efficiency was experienced.

5.23 The UK Government through the Renewable Transport Fuel Obligation initially committed the UK to support a 5% blend of Bio-Diesel at source by 2010. This was subsequently amended to 3.25% following concerns over the impact of CO2 emissions across the Bio-Diesel supply chain.

5.24 However, while these fuels are becoming more widely available, there are practical problems associated with their usage. For example, the service would face difficulties in maintaining warranty support from some vehicle suppliers if Bio-Diesel was used as the source of fuel.

Exhaust systems

5.25 Eminox exhaust technology has been fitted to some vehicles to reduce the emission of pollutants. This technology aims to filter hydro-carbon and carbon monoxide from the system.

5.26 ‘Ad Blue’ technology, which involves the use of ammonia, is now fitted to the majority of heavy commercial vehicles to reduce emissions.

Vehicle Usage

5.27 As part of the review process, the Task & Finish Group were keen to explore how the Council was challenging both the need for, and use of vehicles within its fleet and also how it was reviewing service delivery issues to promote the more efficient use of vehicles.

Asset Tracking – Property Services

5.28 The development of asset tracking has the potential to be a vital tool for managers in their daily operation. It can provide live updates of vehicle and workforce location throughout the county and can allow for resources to be monitored and re-routed to generate efficiency savings, on both fuel, CO2 and time.

5.29 The Group received a presentation on the use of the asset-tracking system within the Property Services Division. Following an initial pilot exercise 18 months ago, the system had now been rolled out to 30 vehicles within the Building Services Section with the aim of reducing the amount of unnecessary mileage. The service reported that it had already witnessed benefits through better workflow management (i.e. vehicles used to address the jobs required) and that this had been reflected in the KPIs (key performance indicators) recorded in relation to void properties, and emergency / urgent repairs.

5.30 Tracker systems are to be installed on 2 vehicles within Social Care & Housing as part of a separate pilot initiative.

Service Delivery Issues

Property Services

5.31 Property Services reported that they had reviewed working practices in relation to planned and responsive work in an attempt to reduce unnecessary journeys and use of fuel.

Social Care

5.32 A review of day care services has resulted in 3 vehicles being taken out of the fleet. A further review is also being undertaken of the Learning Disabilities Service which could also impact on the fleet.

5.33 The role of the Transport Manager within the Social Care & Housing Department is to constantly review the routes of vehicles to accommodate referrals for day care services from social workers.

5.34 The service tries to ensure that it makes the optimum use of its vehicles. The majority of vehicles will operate on more than one route per day and some will operate on up to 3 routes (e.g. day centres, meals on wheels, and luncheon clubs). In terms of the management of vehicle routes, there is little option to send out smaller vehicles if a route is going to be under capacity as all other vehicles are allocated on other routes. To keep a smaller vehicle (e.g. 9 seater) in reserve would not be economically viable. Smaller vehicles are allocated to individuals with specific needs and also allocated to specific establishments (e.g. Activity Centres). These vehicles are used by establishments throughout the day.

5.35 Within a 37 hour week, 80% of time is allocated on routes, while 20% is unallocated time, during which time the vehicle is washed etc. Vehicles may be idle for certain periods of the day; however, in outlying areas such as Newcastle Emlyn, it may not be economic to use it on other routes within the county because of the distance to be covered.

5.36 In relation to making most effective use of vehicles via partnership working, the service works with the Technical Services Department to transport children with special needs.

5.37 Vehicles are also made available to voluntary organisations (free of charge except for petrol) during out of hours such as evenings and weekends. These bodies include Mencap, Breakthrough and Cross-roads. Two other Council vehicles, based in Johnstown, are also made available to other organisations.

5.38 Previous discussions have taken place with the health service in respect of possible partnership working over patient transport. An initial review did identify difficulties, such as demand for both services occur at similar times of the day. However, the Local Service Board had agreed to set-up a project to further investigate these opportunities.

5.39 In terms of school transport, the Group asked whether there was the potential to reduce the use of taxis by making use of Social Care vehicles to transport pupils to school. However, again, one of the key barriers to such an approach is that that the morning and afternoon school-run times clash with the times when Social Care vehicles were in use transporting people to and from day-centre facilities.

5.40 In relation the overall management and efficiency of the Social Care fleet, the service has adopted a zero-based budgeting process where the unit costs of the fleet have been re-worked to incorporate all aspects of the management of the vehicle and this is then re-charged to the services. Budget monitoring and the reduction of down-time have improved considerably in the last 5 years. Users are now provided with a hire rate for vehicles which is based on an analysis of the whole of life asset costs undertaken at the procurement stage.


Street-Scene

5.41 Street-Scene Services also identified a number of examples were where the service had reviewed operational practices to identify more efficient ways of working.

5.42 For example, highways ‘beatmen’ operate from home and are not required to come into the depot at the start of their shift. Also, the refuse fleet was being rationalised as part of the roll-out of the new recycling rounds. Three vehicles have already been taken out as a result of the recent changes to the refuse collection rounds. After the final roll-out of the revised recycling rounds in October 2009, the service will assess the implications of addressing the needs of the remaining households and then would be in a position to again review the need for the number of and type of vehicles for the medium term.

5.43 The service also confirmed that the Council had previously considered the option of operating a double-shift system for the refuse service. However, this was not considered to be a viable option due the health and safety implications of refuse vehicles going onto land-fill sites during the hours of darkness. (However, it was reported that Pembrokeshire were operating an 11-hour day for their refuse service over a 4 day week).

5.44 As part of the fleet replacement programme, all new refuse and gritter vehicles are multi-functional and are fitted with the latest emissions technology. It was reported that the Council’s refuse vehicles are now more environmentally cleaner than the average car.

Fuel management

5.45 The Council consumes approximately 2,000,000 litres of fuel per annum. Fuel prices have increased significantly over the course of the last few years and the Council’s total expenditure is now £1.96 million per annum. Fuel trends are difficult to predict at present due to the impact of the recession. The Department of Energy and Climate Change has produced a forecast on crude oil prices based on a number of scenarios the main conclusion to be drawn is that the oil price will increase over time (table below).

Scenario 1 – Low global energy demand

Scenario 2 – Timely investment and moderate demand

Scenario 3 – High demand and producers market power

Scenario 4 – High demand and significant supply constraints.

5.46 A Fuel Management Strategy has been developed to assist the Council in making savings in this area.

5.47 Fuel is procured collaboratively with other public sector bodies so as to negotiate the most beneficial litreage rates. This is provided to users in three streams:

5.48 Bunkered fuel is the cheapest fuel for clients and services are encouraged to use this supply as opposed to refuelling from garages. There has been some success in moving more towards the use of bunkered fuel, although there is said to be room for further improvement. However, this will require investment in infrastructure.

5.49 Depot fuel supply is currently available from the following locations:

5.50 There will always be a need for some degree of off-site refuelling and the use of Fuel Agency Cards gives flexibility to the driver in terms of the controlled opening times at depot sites and for those operating away from authority facilities.

Performance Management

5.51 A Fleet Best Practice study identified that establishing KPIs (key performance indicators), monitoring performance, and setting targets should be the cornerstone of any efficiency programme.

5.52 Vehicle Performance Reports are used as a method of measuring operational efficiency of the fleet. Monthly reports are sent to service managers to allow them to analyse the performance of their fleet and for them to take appropriate action. These reports make use of a colour-coded ‘traffic light’ system to assist in identifying those vehicles that were under performing in relation to the fuel consumption.

5.53 There may be a number of factors why some vehicles appeared in the red / action required zone. These included whether the normal route of the vehicle was urban or rural, the type of terrain covered, and the weight of the vehicle and driver behaviour.

5.54 In order to evaluate the impact of the effectiveness of these reports, the Group reviewed monthly reports for Social Care and Street-Scene Services where they explored some of these issues in more detail.

5.55 The Group stressed the importance of using these reports effectively and that all managers with responsibility for vehicles should ensure that these reports are monitored on a regular basis and that action is taken to address areas of concern (e.g. driver behaviour).

5.56 Concern was also expressed over the accuracy of the ‘class MPG’ figures within the report (the benchmark used to assess efficiency of the vehicle). As of May 1st 2009, it is a statutory requirement for manufacturers to publish both the MPG and CO2 classification for a vehicle. This will allow for a more specific evaluation of the carbon footprint of the Council’s fleet. This information has already become available for Ford Transit vehicles. However, it is not a statutory requirement to produce this information for heavy commercial vehicles.

5.57 The service could consider further developing these reports and its wider performance management arrangements to include the production of core PIs for CO2, MPG, and vehicle utilisation time.

Driver Skills and Training

5.58 The Authority’s fuel management strategy recognises the importance of making drivers aware of the contribution that their vehicle is making to the Council’s level of CO2 emissions.

5.59 League tables comparing individual performance can be an effective efficiency tool. This could include incentives to maintain and improve performance. Involving staff and drivers in efficiency improvement initiatives can give a sense of ownership and provide a means of feedback and good ideas.

5.60 Improving driver behaviour is seen as critical to improving fuel efficiency and the service is to launch a SAFED driver training programme.

5.61 SAFED (Safe and Fuel Efficient Driving) is a development course, consisting of assessment and training. Its main purpose is to allow drivers to reduce fuel consumption and promote safer driving.

5.62 A pilot will be undertaken in Street-Scene using an external SAFED trainer.

5.63 The Group agreed that the review should support the case for the appointment of an internal SAFED trainer as this was seen as critical to achieving the 10% target reduction in emissions.

5.64 The Group also suggested that the training programme could be supported by other forms of education and awareness (e.g. a DVD).

5.65 A driver awareness programme is being launched in the summer of 2009. This is a series of briefing sessions aimed at raising awareness of a range of issues including driving hours, maintenance checks, tyre pressure checks, safer driving and fuel efficiency.

Fleet Management Depots

5.66 The Council currently runs its fleet maintenance operations from 3 depots: Cillefwr, Glanaman and Trostre.

5.67 Moving to a centralised depot would provide economies of scale and improved operational effectiveness. However, such a move would have implications for wider council services. If the fleet maintenance service was centralised and other services remained within current depots, this would result in an increase in CO2 emissions.

5.68 Therefore, as an outcome of this review, the Group recommends that a further feasibility is undertaken to establish the costs benefits of establishing a centralised fleet maintenance depot.

6.0 RECOMMENDATIONS

Strategy / Policy

6.1 Continue to ensure that sustainability issues are fully reflected in the development and implementation of the revised fleet replacement procurement programme.

6.2 Raise the profile and awareness of key fleet management strategies and initiatives to ensure commitment to the 10% CO2 reduction target, using a range of levers such as education and awareness, the application of technology and performance management.

Fuel Management

6.3 Further increase the use of bunkered fuel (increase ratio of bunkered fuelling from 70% to 85%).

6.4 Continue to monitor and evaluate the use of alternative fuels.

Vehicle technology

6.5 Install Magno-Flo fuel technology on vehicles where appropriate.

6.6 Consider a phased implementation of tracker systems on all council vehicles as part of the roll-out of the new fleet replacement programme.

6.7 Continue to monitor and evaluate the use of other emerging technology.

Performance Management

6.8 Further develop the Vehicle Performance reports to include more accurate recording of class MPG, CO2.

6.9 Ensure that all departments monitor Vehicle Performance Reports on a regular basis and take appropriate action.

6.10 Develop more specific targets C02, MPG, vehicle utilisation time, (corporate and service targets)

6.11 Consider introducing driver league tables and incentives.

6.12 Develop a mechanism to ensure that there is a robust and independent challenge to the need and usage of vehicles.

6.13 Establish the Transport Thematic Review on a permanent to allow for the effective coordination and implementation of all transport and travel initiatives in support of the carbon reduction agenda.

Driver skills/training

6.13 Appoint an in-house SAFED trainer to provide training for key groups of staff.

6.14 Re-enforce the policy in relation to the use of the good driver scheme on all council vehicles.

Fleet Maintenance

6.15 Undertake a feasibility study in relation to the establishment of a centralised fleet maintenance unit.

Service Delivery

6.16 Managers continue to review service delivery practices on an on-going basis to identify more efficient and effective use of the Council’s fleet of vehicles.

6.17 Investigate the potential for the staggering of start and finish times of schools and health and social care establishments to promote more efficient and effective use of vehicles.

** Estimate based on formula which does not take into account specific CO2 emissions per vehicle