Grey fleet are privately owned vehicles used by employees whilst “at work” and the country’s grey fleet is at record levels and accounts for 40% of all vehicles on the road.
The British Vehicle Rental and Leasing Association (BVRLA) and the Energy Saving Trust (EST)prepared a ground breaking report*1 which provided a much clearer view of the scale and scope of grey fleet within UK businesses. They report that the findings are shocking and represent an urgent call to action for anyone involved with the UK work-related road transport.
The former office of Government Commerce (OGC), now the Efficiency Reform Group (ERG), estimated that nearly 57% of “at work” mileage was covered by employees in their own vehicles. The BVRLA and EST study found that 11 billion miles per annum were driven by grey fleet in the private sector, which they found that equated to 3.2 tonnes of C02, 7.038 tonnes of NO and 234,989 kg of PM.
- The average grey fleet is older than company cars with an average age of 8.2 years.
- They are significantly higher in terms of emissions when compared to rental, lease and vehicles in salary schemes.
Grey Fleet is much larger than initially thought, particularly when employers have historically preferred cash allowances rather than a company car. BVRLA and EST state that use of grey fleet is endemic in both private and public sectors. Companies have preferred grey fleet mistakenly believing that they are more cost effective reduce administration and increase driver choice.
The evidence is that despite paying for the vehicles in cash allowances few companies are exercising and degree of control over them. They believe that there is no other cost implications for them, duty of care owed or indeed any company responsibility at all. They could not be more wrong.
The costs of grey fleet, unmanaged can be considerable.
Claim inflation
Most companies do not have mileage verification for travel expense submissions. Drivers will claim mileage expenses irregularly claiming for numerous journeys at once basing their claim on guesstimates, exaggerated journey length or rounding up mileage. Adding 25%+ to their claim which on 2k mileage claim @45ppm would cost a company an additional £11,250. It is worth bearing in mind that most driver with car allowances would drive more than 2k business miles, so the cost would in reality be much more.
Inappropriate choice of Travel
Grey fleet can be cost effective on certain journeys but the longer the journey the more cost effective it is to drive in a newer safer vehicle or travel on public transport.
Environmental impact
Due to grey fleet being older the carbon and emissions are greater and therefore more damaging to the environment and add to poor local air quality.
Loss of work time
Research indicates that UK driver spent an average of 30 hours in delays in 2015 on the roads, wasting an average of 101 hour in London.2
Duty of Care and Health and Safety
The number of “at work” deaths now account for over a quarter of overall road deaths. The costs arising from “at work” road traffic accidents are in the region of £2.7 billion per year (4)
79% of small and medium companies were not aware of their legal obligations under health and safety. Whilst employees may be using their own vehicle it will not absolve the company from all responsibility. The law is clear under the Health and Safety at Work Act 1973 there is legal duty of care to an employee at work regardless of vehicle ownership which means that grey fleet need to be managed as diligently as company owned or leased vehicles.
The ”Driving At Work: Managing work-related road safety guide provides details of the legal responsibilities of employers to comply as far as reasonable practicable as well as suggestions as to how it should be managed and risks assessed.
It suggests that this starts with a risk assessment of all aspects of driving for the business including all types of vehicles including grey fleet. Employers can be liable if unroadworthy vehicles are used on company business.
Employers also need to consider driver competency and training, driver health, fitness to drive inspections, vehicle inspections, vehicle suitability, condition and maintenance; a valid MOT; proper route planning to ensure adequate travel time allowance to avoid driver fatigue and accidents due to racing the clock.
Penalties can be imposed on the company and directors personally. Fines under the Health and Safety at Work Act 1974 range from £50 (micro company with low culpability and low harm) to £10m (large company with high culpability and higher harm). Fines are seldom less than £100k and most are in the thousands. Renown consultants were found guilty of 3 breaches of S2 and S3 of the Health and Safety at Work Act 1974 and were fined a total of £450,000 plus £300,000 in court costs.
The judge commented that whilst fleet safety policies were in place the company gave lip service to them.
How should you manage grey fleet?
Companies must manage grey fleet as company owned and leased vehicles. The drivers are responsible for maintenance and ensuring their vehicles are roadworthy but it is the company’s responsibility as well to ensure that both the driver and the vehicle are “fit for purpose” whilst being used for work. That means they need:-
- A risk assessment in relation to the driving activity
- A grey fleet policy and procedure
- Policy and procedure should be communicated effectively to the drivers
- It should be implemented and properly recorded
- Regular driving licence checks
- System to record details of MOTs, servicing, insurance
- Driver training
- Effective prosecution management
This will encourage safer driving, improve driver behaviour and attitude. It will also reduce the costs the company should have clear policies on when a driver should use their own car or public transport – to reduce the number of “work” journeys to a minimum.
Conclusion
Grey Fleet is an area of fleet management which is woefully neglected particularly by small and medium sized companies. It is more environmentally detrimental and incurs significant costs to companies.
By managing grey fleet, companies can meet their duty of care responsibilities whilst at the same time saving significant costs. It will reduce the number of fraudulent expense claims and reduce the number of accidents. Good effective fleet management enhances a company’s corporate social responsibility.
Auriga Fleet if perfect for providing full comprehensive fleet management which provides a simple and easy fleet management system with a mobile application, driver training with full legal support for both accident and road traffic offence management as well as health and safety compliance.
https://roadtrafficdefencelawyers.co.uk/auriga-fleet-training-management/
references:
- https://www.bvrla.co.uk/static/2fd555f2-7915-469d-b8e08409aae14d11/BVRLAESTGetting-to-grips-with-grey-fleetfinal.pdf
- DFT Road Use Statistics 2016
- https://governmentbusiness.co.uk/features/grey-fleet-problem-waiting-happen
23rd June 2022 Andrea Clegg