Paul Barker grabs a cuppa and a chat with one of fleet’s most influential figures – Coffee With… Caroline Sandall, Chairman, ACFO
Caroline Sandall was a fleet manager for more than 20 years with Orange and then Barclays, before moving into consulting in 2017, then joining Leaseplan earlier this year. In the summer she was elected chairman of fleet operators’ association ACFO following John Pryor’s retirement.
QWhat did it mean to you to be appointed chair of ACFO?
I’ve been part of ACFO for a considerably long time, so it’s been part of my work existence for many years. For me it’s always been important to share my knowledge and experience and to give back and help other people, and also now to be able to spearhead the organisation to keep moving forward and continually deliver something that is of use to members; that’s really important to me. I want to carry on with what ACFO has kept doing for the past 40 years but keep looking forward at what else we could be doing, or what we’re doing now and how can we do it better. So that’s developing digitally as well as increasing our presence in front of Government and keep influencing them as much as we can. As difficult and challenging as that proves to be, we need to keep doing it.
THE TAXING SUBJECT OF ROAD TOLLS
A long term concern for ACFO, and the fleet industry in general, is what the transition to electric vehicles will do to the Treasury’s view on road taxes, as reduced fossil fuel use will lead to less income from duty on fuel.
“What Government does long-term in terms of managing the wider taxation is a big question,” ACFO chairman Caroline Sandall tells Company Car Today. “Fuel duty has always been a hot topic and continues to be a hot topic. That must necessarily change at some point. We can reasonably expect Government to move to an alternative model, and I’d like to see that mapped out.
“That’s going to take some time, but means moving to more of an obvious pay-on-use system,” she says. “Clearly, we do pay on use to some extent at the moment but I don’t think people view it as pay on use, certainly not in the same was as they would view road tolling, which is a deeply unpopular thing.
“It’s the potential vote-losing change that is preventing us from making inroads into how that taxation works. But Government has to do something, because that black hole in the fuel duty forecast in terms of income is gigantic.”
QWhat do you see as the association’s main role?
I think the broad idea of us trying to be the voice of the fleet operator still stands. We need to keep banging the drum into Government and while we think we may not have had enough impact, and that is across all the industry bodies, we need to continue to find new ways of getting in front of those people to make sure they understand the consequences of the initiatives they are contemplating. Or the impact of the things they have changed.
As an industry I always think we can and should be doing more, and with the strength of the board we’ve got, where everybody bar me now is a fleet operator, and with a fairly wide variety of fleets, that broad experience is going to be useful in making sure that what we deliver is still relevant, appropriate and useful.
And we are looking at fleets that aren’t members to see what it is that we aren’t offering to them, because if you are in the industry and you are active then you should be a member. That’s part of supporting the wider community as well, so even if you are an experienced and knowledgeable fleet manager, you can learn from other people’s experience.
QWhat do you see as the key issues facing fleet managers at the moment?
I do get surprised by the reluctance to move ahead with electric vehicles. Regardless of where you are now, it is going to happen so you need to get ready and understand more about what your drivers currently do; look at usage patterns, travel patterns, geographical areas, geographical split, look at how distinct your populations already are.
I think some people still think in the one-fleet attitude but in reality they have multiple fleets; within a fleet they have got distinct groups of drivers, it’s just comparatively hidden if you work on an average whole-life cost model where everything is blended into one. Most fleets will already have very high-mileage and very low-mileage drivers and everything in between, so you’ve already got groups of people there, many of whom could quite easily switch. That tipping point between ICE vehicles and EVs is pretty much reached for whole-life cost, and looking at how things will change with new BiK tables and WLTP changes, a fair number of traditional company cars will become hugely expensive. Fleets need to see that the time is now to either be adopting or to be getting ready. They should be sorting out workplace charging, plus a supporting structure to help drivers understand what their options are. You look at the road map of the vehicles that are coming in the next 12-24 months and it’s going to explode. These are normal vehicles and the ranges of some of them can absolutely replace what people are currently doing.
But there is real positive change coming in terms of the sorts of vehicles people are going to be able to access, and the extent to which fleets can contribute towards the nation’s clean-air campaign. I would like to see Government support that even more in the way that vehicles are taxed because we have proven in the past quite how much fleets can contribute.
QWhat did you make of the Government’s BiK announcement?
I was disappointed. It didn’t go far enough. Based on what we know and what we can reasonably expect in terms of WLTP impact, the reduction in rates is not going to offset the increase that we’re going to see after WLTP. I think for a lot of cars, it will be significantly different. Not a percentage here or there but several percentage points. It’s still reasonable to say that in the short term we’re going to see a lot of cars increase in BiK.
We’ll probably see a lot of fleets extending or using interim provisions, holding on to vehicles for longer, keeping the vehicles from leavers to reallocate them. We might reasonably expect to see the level of cash uptake continue to increase in the short term as people look at the situation and think they don’t know what they’re going to pay, and don’t know when they’ll have the data to gauge what their next new company car will cost.
SANDALL selects her stand-out cars
MG B GT
My brother’s friend had one. He was about four years older than me, so all through my teen years it was the car that I always wanted.PRESENT
BMW 630D GT
The number of miles I do now, I wanted something that was going to be comfortable. When I looked at the list, I thought what allows me to be comfortable and is good value for money. It’s a cracker of a car, I absolutely love it.
ASTON MARTIN DB5
If anything was available to me, what would be at the top of the list if money was no object? In terms of possessing something that is a joy to own, the Aston Martin is just sheer beauty. But the list is very long!
QIs there a concern about operational issues below the surface that people maybe aren’t considering when they let their drivers go for the cash?
Yes, you should be educating people about the consequences of cash, the things they need to think about and the budgeting and forecasting that they need to do for themselves if that’s what they are considering doing. You need to make them aware of what happens to their insurance privately if they have an accident versus a company car, or what happens if a vehicle is off the road in a situation where a replacement vehicle isn’t standard. Mileage variations is a classic – you are protected from all of that when you are in a company car. And that’s a challenge for a fleet because you have to be fair to drivers without encouraging them to do something you’d rather they didn’t.
QHow do you think the Government views company cars? There seems to be the attitude that tax can continue to rise and drivers will just swallow it?
I think Government need to appreciate that there is a sweet spot and they are rapidly going past the spot at which people will still want to have company cars. They have increased the BiK so much, and a lot of the financial models in their forecast seem to be based on the number of company cars that have existed historically. Well, it seems clear that if you keep increasing it then the number of people will start to shrink.
If you look at their own data you can see that the number of company cars is going down, but revenue generated is going up. I’m not sure I entirely understand why they can’t see what we’re seeing.
But more importantly there is so much more that the industry can do to support improvements in clean air, congestion etc; I really wish that Government would recognise that because the industry wants to support that more readily. We’ve done it before, we can do it again.
QDo you think the move to electric vehicles might lead to a resurgence of the company car?
Yes. Definitely. I would like to think that with the 0% BiK it starts to raise people’s awareness and makes people start to look again at EVs. We still have that gap in the smaller cheaper end of the scale but that will change; if you look at the VW ID and those sorts of vehicles becoming available. If people start to look at it with a proper whole-life cost point of view, then they will start to see that there are considerable savings to be made. You look at the volatility that we can reasonably expect to see on fuel pricing, then it is a good time to have another look at EV. It may not be for all of the drivers today, but as every month passes and more of those vehicles become available, the choice is going to widen quickly.
SANDALL ON… the eco issues of fleets offering a cash opt-out
“You could say that CO2 has to be under a certain level, but I do question how many fleets have that kind of policy and how many fleets successfully enforce it. Once somebody is given the option of taking cash, to then insist that they have a particular type of vehicle is quite a difficult message to get across.”