Contents
Report 7 of the 14 January 2010 meeting of the Resources and Productivity Sub-committee, outlines the primary role of Transport Services.
Warning: This is archived material and may be out of date. The Metropolitan Police Authority has been replaced by the Mayor's Office for Policing and Crime (MOPC).
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Transport services costs
Report: 7
Date: 14 January 2010
By: Director of Human Resources on behalf of the Commissioner
Summary
The primary role of Transport Services is to provide the MPS with a safe and cost effective vehicle fleet and operational support. The vehicle fleet comprises around 6,377 vehicles, of which approximately 670 are leased and 800 are on daily hire. Around 3,780 of ‘owned’ vehicles and all leased vehicles are maintained by outsource contracts; the remaining vehicles (including boats) are supported by in-house maintenance. Transport Services also provide a secure despatch and distribution service, as well as a driver service across the MPS. It is recognised that further opportunities to bring other services under the remit of Transport Services may occur in the future and some of these are included in this report.
A. Recommendations
That members are asked to note the contents of this report.
B. Supporting information
Background
1. Transport Services carries out a number of functions for the MPS as follows:
|
Function |
Staff numbers | Brief Description | Budget 2009/10 |
|---|---|---|---|
| Lambeth Driver Services | 49 | Provide a professional driver service in support of operational policing. | £2,500,000 |
| Despatch and Distribution | 34 | Provide an internal mail, exhibits, forensic material and stores supply service. | £1,300,000 |
| Covert Maintenance Workshop | 39 | Operate a multi franchise car and van repair and maintenance workshop in support of covert policing. | £2,000,000 |
| Wapping Boatyard | 20 | Operate a workshop for the repair, maintenance and collision damage repair of the MPS marine and covert motorcycle fleet. | £1,500,000 |
| Covert Collision Workshop | 10 | Operate a collision damage repair workshop for the covert car and van fleet. | £700,000 |
| Contract Management | 4 | Manage the MPS Transport Service contract’s (some 20 in total). The most significant being the 24 hr repair, maintenance and collision repair service for the overt fleet, supplied by VT Group circa £17M plus spend from Transport Services pa. | £17,400,000 |
| Fleet Management, Service Desk, Business Administration and Support | 34 | Operational fleet management for business groups, including the hire and leasing desk. In addition this area operates a service desk for fuel card administration, covert fleet administration, including Notice of Intended Prosecutions and Fixed Penalty Notices. Director’s private office, finance and resources, IT, FOIA, business continuity, business planning, quality management and policy. | £2,000,000 |
| Vehicle Engineering | 7 | Provide an in-house vehicle engineering support function, testing, evaluating, equipping and specifying vehicles for operational suitability. | £500,000 |
| Collision Management | 4 | Provide a collision management service for all MPS vehicles including third party claims. This team also manages the disposal of vehicles, with a budgeted income £1.35M in 2009/10. | £400,000 |
| Historic Fleet | 0 | Maintenance budget for the MPS historic fleet located at Hampton. | £12,000 |
| 201 | £28,312,000 |
2. The budget for 2008/09 was broadly the same as the current financial year with £28,232,019 allocated, an outturn of £28,169,760, which left an under spend of £62,259, or 0.22% of the gross budget. A fully spent budget is being forecast for the current financial year. The budget has remained static at around £27M to £28M since the completion of transition to the new repair and maintenance contract in 2006/07. For 2009/10 the provisional budget has been set at £27,963,623.
3. The majority of the revenue costs are with VT Group for the repair and maintenance of the overt fleet. This is a second generation contract which was subject to competitive contractual renewal, the contract was awarded in late 2005, with commencement in April 2006. This new contract provides the MPS with both service and contractual enhancements over the previous one to provide the Authority with flexibility, whilst ensuring resilience. The service required by the MPS is both comprehensive and demanding. It includes the provision of a 24/7 control centre and challenging levels of attendance, recovery and availability for the heavy use that many of the vehicles are put to. Turnaround times for collision damage repair are also challenging, as they form part of the overall MPS fleet availability, not as a separate calculation as happened with the previous contract.
4. One of the benefits of the new contract is we negotiate (in consultation with Procurement Services) both enhancements and contractual changes during the life of the contract, plus there is open book accounting. An example of where we have been able to negotiate in service improvements is where we have adjusted contractual availability to be more focussed on front line response vehicles. There is now a greater emphasis on a first time fix on site, rather than recovery to a workshop, this at no extra cost to MPS and has improved local availability. Transport Services are constantly looking at how we can optimise the contract for the benefit of the MPS and section 5 outlines further work that is underway in this area.
5. The contractual spend with VT Group for 2009/10 is shown at Annex A to exempt Appendix 1, some of which is from Transport Services budget, for the funded fleet. The remainder is from other MPS budgets which attract external funding. For example, vehicles for the Safer Transport Command are funded this way.
6. Transport Services is responsible for a capital spend for purchasing all MPS fleet vehicles. The total eight year forecast from 2009/10 going forwards is shown at Annex B to Appendix 1. This includes the budget for the equipping of these vehicles for operational police use. Again this is a second generation contract, with service improvements over the previous one.
Devolved budgets
7. Transport Services also provide the enabling contracts for a number of locally devolved direct budgets, which are set and monitored by Finance Services. These are for the hire and lease of vehicles through the VT Group contract and also the supply of fuel for vehicles via Arval, through the OGC fuel card framework.
8. Transport Services actively monitor all fuel transactions for anomalies in fuel usage, using sophisticated exception reporting, highlighting possible areas of concern to business units for investigation. These exceptions are proactively chased by Transport Services for resolution through an escalation process.
9. With regards to hire and lease Transport Services are engaging with business units to influence and control spends in these areas. For member’s information the spends for 2008/09 are shown at Annex C to Appendix 1. There would almost certainly be saving opportunities in centralising and capping the hire and lease budgets. However there is likely to be resistance to this at a local level, as the devolution of these budgets is seen as enabling local managers to optimise vehicle resources to match local operational needs, and community priorities.
Vehicle allocation
10. Vehicle allocation has previously been based on the historic position of vehicles within the business groups. There was an exercise in 2001 to ‘tidy up’ the TP BOCU allocation and a vehicle allocation formula was formulated to redistribute this fleet. However going forward, it is Transport Service’s intention to have greater involvement in fleet allocation, with a move to local stewardship of vehicles rather than ownership. The sharing of vehicle resources across the MPS is a must going forward to gain higher utilisation. Work is underway in Transport Services to develop an utilisation model to assist senior management teams to optimise their fleet profiles, whilst allowing resources to be shared to optimise availability at times of peak demand. Supporting this, work is currently being undertaken with VT to gain better support of the fleet, to enable higher levels of availability.
11. The current MPS vehicle allocation as at 17/12/09 (excluding ACPO provided transport) by business group is shown below:
| Business Group | Allocated Vehicles | Leased Vehicles Hire Vehicles | Leased Vehicles Hire Vehicles |
|---|---|---|---|
| Territorial Policing | 1,761 | 334 | 490 |
| Specialist Crime | 1,138 | 157 | 226 |
| Specialist Operations | 550 | 52 | 29 |
| Central Operations | 984 | 36 | 39 |
| Directorate of Information | 61 | 1 | 14 |
| Resources Directorate | 13 | 10 | 1 |
| Human Resources | 343 | 15 | 0 |
| Deputy Commissioners Portfolio | 12 | 66 | 4 |
| Total | 4,862 | 671 | 803 |
Transport services initiatives
12. At the end of the financial year 2008/09 MPS daily hire stood at in excess of 1,200 vehicles per day. Recent changes to arrangements has led to a decrease of around 400 vehicles per day, to approximately 800 (as at 17/12/09). This 400-vehicle reduction means a saving of at least £4,000 per day, using the cheapest daily hire rate available to the MPS and having no discernable affect on front line policing. For the remainder of the financial year, if this reduced requirement is maintained, savings of £425,000 should be delivered. However this is a devolved local budget so savings may be consumed in other areas of local expenditure. Whilst there are seasonal adjustments in hire the current reduction is unprecedented when compared against the previous 6 years.
13. Going forward into 2010/11 Transport Services is developing an internal hire fleet, to accommodate some daily hire requirements. This will further reduce spend in this area, and savings of £400,000 are calculated for the first full year of operation. By using a trading account it is envisaged that these savings will not be returned locally, but recycled back corporately for use centrally. This is part of Transport Services SIP (Service Improvement Plan).
14. All contracts are being reviewed to ensure they are fit for purpose, future proof and continue to deliver efficiencies. The main focus is on the two large spend areas, VT Group for repair and maintenance (revenue spend) and S. MacNeillie and Son who carry out the equip for service function (capital spend). Work has commenced with VT looking at general-purpose vehicle maintenance, where similar contractual standards to that of the response vehicles apply. It may be appropriate to reduce this currently high level, whilst still ensuring availability is maintained, thus leading to contractual savings. Again this is part of Transport Services SIP.
15. Transport Services have been working closely with NPIA (National Police Improvement Agency) regarding the national vehicle procurement contract. We have ensured the MPS interests are best served going forwards, with an emphasis on manufacturers and whole life costs that are specification driven, rather than individual models as at present that concentrate solely on purchase price. This will allow us to use mini competitions to drive best value, whilst ensuring that any vehicle selected is operationally fit for purpose, has the minimum whole life costs and is environmentally responsible in the context of the operational need.
16. To assist in the delivery of the new procurement framework considerable work has been undertake by Transport Services with all vehicle manufacturers who could possibly supply to the police market. This is looking for them to provide a factory built police vehicle, leading to reduced equipping for service costs and the opportunity for manufacturer buy back. This is innovation that has caused considerable interest in the market, from both established suppliers and also those keen to increase their market share, with this niche, but very high profile opportunity.
17. One challenge facing the MPS in 2010 is that a large number of vehicles leased during 2007 reach the end of their contract life (216 for the first 6 months of the calendar year). Transport Services is working with those affected to ensure there is notification in a timely manner when the lease will expire. We will then explore opportunities to provide replacement vehicles if the business case is supported at a senior level and funding is available.
18. The MPS has in the region of 2,000 pedal cycles. At present there is no corporate maintenance contract, repair standards or fleet administration for these. To negate this risk Transport Services have commenced work to set up an enabling contract to allow pedal cycle maintenance to be carried out locally, with the appropriate repair and safety standards and fleet management package, ensuring that this part of the MPS transport fleet is safe and available for operational use.
Income generation
19. The MPS has three workshop locations, which cater for repair, maintenance and collision damage repair for cars, vans, motorbikes and boats. With the exception of boats all are focussed on the covert fleet. Whilst the service provision to the MPS is paramount peaks and troughs in workload are managed with business opportunities from other like organisations, for example SOCA or marine vessels from the Fire Brigade etc. This generated income in the region of circa £75,000 for 2008/09.
20. Also Transport Services manage the sale of disposal vehicles at end of operational life through a number of contracted auction houses. To ensure the highest residual value is achieved the market is constantly monitored to ensure MPS vehicles are sold at the most advantageous location. The budgeted receipts for this activity in 2009/10 are £1.35M.
Environment
21. Transport Services, on behalf of the Authority, takes its environmental responsibilities seriously. The MPS operates the largest public sector hybrid fleet. To further our environmental responsibilities, on 22 October the Authority approved that we lead a collaborative procurement exercise for the GLA family in the supply of 1,000 electric and alternatively fuelled vehicles (800 for the MPS) by 2015, subject to funding and a detailed feasibility study.
22. We are acknowledged as the leading public sector body in terms of innovation, with a number of manufacturers giving us access to new products well in advance of the launch to the mainstream market. An example being the MPS had the opportunity to evaluate the Mitsubishi i MiEV in September, this was 2 months before its official launch in the UK.
C. Race and equality impact
1. There are no equality or diversity issues associated with this report.
D. Financial implications
1. Transport Services has a total revenue budget in 2009/10 of £28.31M and is currently forecasting to spend the full budget amount. The budget for 2010/11 is provisionally set at £27.96M and Transport Services are set to deliver total savings on a number of Service Improvement Programmes (SIPs) to a total of £1.4M in 2010/11. This will increase cumulatively to £2M in 2011/12 onwards.
E. Legal implications and risks
1. There are no legal implications believed to be associated with this report.
F. Background papers
None
G. Contact details
Report authors: Nigel Jakubowski, Director of Transport Services, MPS
For more information contact:
MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18
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