Fleet management and leasing company Arval has released research it
has carried out into the so-called ‘grey fleet’ – and the
implications for fleets are worrying. Arval defines the grey fleet
as “drivers who use their own car for business travel and that
often sit outside the normal company car policing, reporting and
communication channels”. With the recent legislative focus on duty
of care issues and the potentially serious consequences if fleets
are found responsible for an accident under the new Corporate
Manslaughter rules, the research is timely and illustrates starkly
the scale of the risk.
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Liberal Democrat shadow secretary of state Susan Kramer observed
at the launch of the grey fleet report that around one in three
road deaths in the UK involve a business car, with the annual cost
to business of such accidents estimated at £2.7bn. However, she did
not think more red tape was the answer, favouring instead raising
the profile of this issue, and getting the message across to
companies that they need to have the right structures in place.
While stressing that accurate figures regarding business car
usage in the UK are “notoriously” difficult to come by, Mike
Waters, head of market insight at Arval estimated that if there are
around 4m business cars on the roads, there are probably
approximately an additional 1m “non-company owned vehicles being
driven on company business”.
Of the companies surveyed by Arval, 37 per cent said that over
10 per cent of business mileage was travelled in a grey fleet
vehicle, with 13.4 per cent saying over a quarter of business miles
were in non-company owned cars.
Waters said the trend towards grey fleet vehicles had taken root
over the last decade or so, and was primarily driven by the greater
flexibility of choice offered in the area of company cars, with
more cash-for-car schemes operated by businesses. While these are
popular with employees, fleet managers have no say in the types of
cars employees choose, and, worse, “employees can opt out of the
control and policies of their fleet manager,” Waters said.
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Employers who move to cash schemes rather than a company car may
believe that by doing so they are reducing costs and abdicating
their responsibility towards business drivers (see box 1). Waters
pointed out that they are just as responsible for an employee in a
car as they are for an employee in the office, and will be held at
fault if they did not do their utmost to ensure an employee’s
safety.
And with basic checks not being carried out on large numbers of
grey fleet vehicles (see box 2), the possibility of a successful
prosecution by the Health & Safety Executive (HSE) in the case
of an accident cannot be discounted. “It’s only a matter of time,”
Waters warned.
The size differential
The issue of the grey fleet has slightly different risk profiles
and potential implications for differently sized businesses. Robert
Gifford of the Parliamentary Advisory Council for Transport Safety
noted that while small- to medium-sized enterprises (SMEs) are
proportionately less likely to be affected by an accident involving
a member of staff, when an employee of an SME is hurt – or worse –
on the road, the impact on the business can be much greater. “It’s
low probability with a high consequence,” Gifford said. Replacing a
key member of staff who has been hurt in a crash can be much more
difficult for an SME than for a large corporate, and staff absence
can be far more damaging to an SME’s bottom line than to a large
business where essential tasks can be passed on to other members of
staff.
In addition, Gifford noted, SMEs are less likely to have clear
fleet risk management guidelines in place, meaning that in the
event of a police investigation they could be leaving themselves
open to a successful prosecution under the new corporate
manslaughter regime, due to come into force in April 2008.
A police source quoted in the Arval report said: “The real point
about duty of care is not that company directors could be locked
up, but that those with direct responsibility, namely the fleet
manager, will find themselves caught up in the criminal justice
system, whose wheels can be notoriously slow to turn. Anybody
caught in the duty of care net will, in all likelihood, be
suspended from duty and unable to find another job until the case
has concluded. This could take up to five years.”
Corrine Harrison, head of small business services at Arval
pointed out the need to educate SMEs on the importance of
monitoring the grey fleet: “SMEs are likely to have less resource
devoted to fleet policy [see box 3], but the legislation in this
area applies to everyone regardless of the size of the business.”
The risk from the grey fleet is heightened for SMEs, however: Arval
found that 27 per cent of business-related journeys in sub-25
vehicle fleets were undertaken with employees’ own vehicles,
compared with only 14 per cent for fleets of 500+ vehicles.
Jenny Powley, Arval’s director of large corporate customers
observed that while their record on grey fleet vehicles is better
than SMEs’, large corporates must not be complacent, and there is
still progress to be made on their part. She highlighted accident
reporting as an area where improvements need to be made: “If a
company has a large number of employees and sites, it can be less
obvious when an accident has taken place.”
High cost of inaction
Arval found that many respondents to its survey were unaware of
the hidden dangers of using grey fleet vehicles. Worryingly, it
also received feedback from several fleet managers who are acutely
aware of the potential hazards of using non-company cars, but are
unable to garner support at the board level to change fleet
policies, as the fleet is purely seen as a cost centre and
therefore not given priority for funds or management time.
“For those not in fleet it is difficult for them to
understand the time, resources and profile that should be given to
the role,” one anonymous fleet manager commented, while another
said: “I am not happy that my company does not allow me to have
driver training implemented, hence staying anonymous.”
With fleet issues bleeding over into many other areas –
such as corporate social responsibility, company carbon footprint,
duty of care and so on – the grey fleet needs to be far further up
businesses’ agendas than it is already. One sub-25 vehicle fleet
manager said: “Completing this questionnaire has frightened me to
death, realising how much we need to be doing to monitor our staff
other than company vehicle drivers – thank you.”
