Agenda item

(Environment Portfolio Holder) To consider the attached report (C-032-2014/15).

(1)        That the report produced by WYG Environment Limited on the review of the in-house Fleet Operation Service (FOS) be noted; and

(2)        That a two staged approach for scaling down the Fleet Operation Service and relocating to a smaller vehicle maintenance workshop at Oakwood Hill be agreed.

The Environment Portfolio Holder presented a report on the review of the Fleet Operations Service.

The Portfolio Holder reminded the Cabinet that the Council provided an in-house Fleet Operations Service from the Langston Road Depot in Loughton, which offered a number of services for all Directorates of the Council. In addition, the Service provided services to the public and private companies in the form of MOT tests. Overall, the Service had made a loss of £22,833 in 2013/14.

The Portfolio Holder reported that the Service was intended to be relocated to the new proposed depot at Oakwood Hill as a result of the redevelopment of the Langston Road Depot into a retail park. This offered an opportunity to review the way the Service was provided. WYG Environmental Ltd was engaged to carry out a review of the Service and their full report was attached at Appendix 1 of the report. The review concluded that there were a number of options available to the Council and at this stage it was proposed that the current service should be scaled back and relocated to a smaller workshop in the new depot at Oakwood Hill. The operational costs would be reduced, which in turn would make the Service more economic. This two-stage approach to scaling down the Service would allow a full assessment of the extent of the services required before a competitive procurement exercise could be carried out.

A local Member for Loughton Roding opined that the Service charged approximately £5 more for Mot tests than other providers, although it was acknowledged that they provided an excellent service. It was also felt that energy efficiency should be an important consideration when constructing the new depot. The Assistant Director of Neighbourhoods (Technical Services) highlighted that the report from the Consultants showed the charge levied by the Service to be approximately £5 less than other providers, although this could be increased in the future to generate more income. The Portfolio Holder emphasised that the £22,000 operating loss for 2013/14 by the Service did include the income from servicing the Council’s Fleet vehicles. Members of the Cabinet highlighted the benefits for the Council from the Service and agreed to retain the Service in the future but scale down its operations.

Decision:

(1)        That the report produced by WYG Environment Limited on the review of the in-house Fleet Operation Service (FOS) be noted; and

(2)        That a two staged approach for scaling down the Fleet Operation Service and relocating to a smaller vehicle maintenance workshop at Oakwood Hill be agreed.

Reasons for Decision:

The volume of work carried out by the Fleet Operations Service for the private sector and the associated income was significantly higher than the Council’s own work. This exposed the Council to the risk of a legal challenge and a decision was required on how the Service should be provided in future.

Other Options Considered and Rejected:

To outsource the service in its current form. However, the Council’s consultants were advising that there was less certainty about whether the Council would achieve value for money through this option.

To create an Arms Length Management Organisation (ALMO) to run the service. However, the Council’s Consultants were advising that the scale of the operation was not large enough to make this option feasible.