I N F O R M I N G FA C I L I T I E S M A N A G E M E N T P R O F E S S I O N A L S
fm-world.co.uk / February 2018
TA ST E R E D I T I O N
CYCLE CITY How FMs should respond to the boom in bicycling to work
CARILLION’S CRASH Reaction from across the sector to the collapse of Carillion
OBSTACLES AHEAD A challenging year? What service providers think 2018 will entail
ELECTRIC TEAMS Getting up to speed with the requirements of electric vehicles
F M WO R LD
FEB RUARY 2018
CONTENTS COM M UNI TY
24 PE R SPE C TIV E S Four of the most interesting and insightful opinions on FM this month
27 A BIT A BOU T YOU Ed Stephens of AM Services Group on the finer points of cleaning and snooker 26 T HINK TA NK What will be the biggest challenges facing the FM sector in 2018?
ANA LYS I S
7 CARI LLI O N ’S COL LAPS E An examination of events leading up to the group’s fall, and FM leaders’ insight
3 0 F E BRUA RY @ BIF M The people and projects currently informing BIFM activity
12 H ACKI TT HE ARIN G A summit informs the next phase of the of high-rise building safety review
3 4 C A LL S TO AC T ION The events, surveys and discussions that deserve your attention y
KNOW LE DGE
37 EYES DOWN Forbo Flooring Systems’ digitally printed flooring gets interesting 38 LIGHT OUR WAY GVA’s experts discuss the European Standard for Daylight and Sunlight 3 9 TR E E HE A LT H C HEC KS Airborne mapping of trees and vegetation aids grounds managers
13 CO M P ETE N CE HE ARIN G CIBSE launches its Knowledge Series document on FM competency
40 AU TOM AT ION CONVE RG E D Draw all building functions into an integrated platform for simpler FM
14 ‘ ECOVERSITY’ CHALLE N G E How Clive Wilson, director of estates at Bradford University, became an MBE
45 WATC HING OU T How to keep CCTV use within the new data protection legislation
18 O N THE MARG IN S Bruce McDonnell, Incentive FM’s MD, on the pitfalls of public sector contracts
6 6 WHIT E HOU SE WHITE WA S H Maintenance requests met by the FM team in Trump’s White House
FM World’s in-depth analysis section 50 BESPOKE OFFERING Cycling to work is good for employers’ branding, staff health and improving air quality – but people want more than bike racks when they arrive. We discover why end-of-route facilities must include lockers, showers and extra perks to increase pedalling power.
60 FLEET OF ENDURANCE As legislation, policy and technology conspire on an increasingly regular basis to bring the viability of F E B RUA RY ’ S fleet management schemes TO P I C into question, those on FM ON THE MOVE ON TWO whom this responsibility AND FOUR WHEELS rests need to be ever more vigilant. W W W. B I F M .O RG .U K / F M WJ O I N
56 GOING ELECTRIC From 2040, says the government, new cars sold in the United Kingdom must have zero emissions capability, whether hybrid or pure electric. So how geared up for this major transformation are fleet managements in the FM sector?
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INSIDE 07 10 12 13 14
‘Seismic fallout’ from Carillion collapse Carillion: what the experts are saying Working groups to monitor high-rise living CIBSE launches FM competency document ‘Ecoversity’ paves way to honour
FRONT DESK THE MO N TH’ S MOST I MP O RTA N T F M STO RI E S
BUS I N E S S L I Q UI DATI ON
‘SEISMIC FALLOUT’ FROM CARILLION COLLAPSE
PHOTOGRAPHY: GETTY
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onths before Carillion collapsed, a series of worrying developments were already indicating that the UK contractor was in trouble. There had been profit warnings, the selling of contracts to competitors, the appointment of a new chief executive and the Financial Conduct Authority had opened an investigation into the “timeliness and content” of financial announcements. But news of the liquidation was still a jolt for the industry.
W O R D S : H ER P R EE T K AU R G R E WA L
Tony Raikes, managing director at Vinci Facilities, says the situation was “shocking in how they have gone immediately into liquidation” and how it was “unprecedented that a company of Carillion’s size got into the position they got themselves into”. The company’s debts are reported to amount to more than £1.5 billion, with a pensions deficit of more than half a billion. Rebecca Long-Bailey, Shadow Secretary of State for Business, Energy and Industrial Strategy, criticised the
government’s awarding of contracts despite Carillion’s three profit warnings over the past six months. “It is essential that shareholders and creditors are not allowed to walk away with the most profitable contracts while the taxpayer bails out loss-making parts of the business,” said Long-Bailey. Within hours of the announcement of the collapse, business secretary Greg Clark had asked the Insolvency Service to fast-track an investigation into Carillion’s directors and broaden
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F RO NT D E S K A N A LY S I S
WHAT THE EXPERTS ARE SAYING HOW TH E FM SE C TOR R EAC TED TO C A RI LLI O N ’ S CO LLA P SE “The news of Carillion is indeed a sad moment for all those affected. BIFM’s immediate priority has been to reassure the learners from Carillion studying for qualifications in facilities management that their situation is unchanged. I want to encourage them to continue their self-development and I wish them luck. We can’t change what has happened, but we must learn from this event and use it as catalyst for change. The case can and must be made to change from a model of service delivery that is driven by cost alone to one that is driven by value.” BIFM’S LINDA HAUSMANIS “What is unfolding at Carillion must never be allowed to happen again. Theresa May must act right now to bring Carillion contracts back into public ownership. It is the only way to safeguard the jobs and services this mess has put at risk… Merely propping up this botched shell of a company is not a secure or stable solution for our public services. It’s high time we brought this vital work back inhouse. Despite months of profit warnings, ministers have failed to prepare for the collapse of Carillion, which has plunged workers into crisis. Ministers should be hanging their heads in shame – it’s a complete shambles.” TIM ROACHE, GMB GENERAL SECRETARY “It must have been a very difficult time for those in charge to pull the plug. We’ve got to look after the people, we have got to protect the reputation of the industry and we have got to hope to God that this doesn’t happen again… [At Tarmac] we started all the hospital PFI contracts. We were doing great things that would be good for the UK’s healthcare. We have to show the world that one company has gone down, but this isn’t the state of all companies in the industry. The main lessons we should learn are corporate responsibility, delivering according to the agreed contract and properly bidding on contracts.” JOANNA
LLOYD-DAVIES, PRINCIPAL AT JLD CONSULTANTS AND FORMERLY AT TARMAC, WHICH REBRANDED AS CARILLION IN 1999
“This is clearly a very difficult time for Carillion, its customers and its employees. Mitie is making itself available, where it can, to help ensure continuity of service to organisations and government following Carillion’s liquidation.” PHIL BENTLEY, MITIE PLC CEO
“Government should learn to use all of the facilities management supply chain and not give all its work to a chosen few. Also, companies should finally learn that aggressive accounting and commercial practices will kick you in the butt eventually. Forcing your sub-contractors onto 120-day terms only provides a short-term fix to your cash problems but guarantees resentment and non-cooperation.”
CONSULTANT MARTIN PICKARD
“My hope is that our competitors’ management teams will be under pressure to pursue more sustainable strategies. The customer base has to change its procurement habits. Customers and the government have been guilty of pursuing low-cost solutions. And the government has been under pressure to pursue best value… It is devastating for thousands of people, particularly their supply chain. There is sadness in those stakeholder groups. You never want to see a competitor go in the way they have gone.” TONY RAIKES,
MANAGING DIRECTOR AT VINCI FACILITIES
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“[Carillion’s] FM part in particular was not core to their main construction offer, but was, in my opinion, a sound operation with good people and systems. It is possible that bidding has been too aggressive. I think that is a problem that is widespread as businesses chase sales and market share in a relatively stagnant market. From an FM perspective, this is symptomatic of a problem with the tendering process, especially in the public sector, which still gives too much weight to price and not enough to quality or business sustainability… There are some obvious potential buyers for a business with a strong technology sector record and some interesting public sector contracts. Might a management buyout of the FM business, as a whole or in parts, be viable?”
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F RO NT D E S K A N A LY S I S
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he Chartered Institute of Building Service Engineering (CIBSE) has introduced its Knowledge Series document, KS21 Competency and Competency Management Systems in Facilities Management. Authors Steven Hunter, Stephen Gathergood, and Jo Harris – all members of CIBSE Maintenance Task Group – spoke in support of the document, which “provides an understanding of competence and competency, focusing on the management of building engineering systems in operational buildings, although the concept is equally valid for other disciplines including management”. At the launch event in January, Jo Harris, controls and project engineer at Eli Lilly UK, spoke about legislation and risk assessment pushing competency too far down the chain. Staff needed to be assessed accordingly, said Harris. However, she cautioned: “Just because you’re trained does not mean you’re competent.” Harris said that as FMs tend to arrive into the sector from diverse backgrounds, while in charge of running buildings they may not understand engineering systems. UK law demands competence but it does not provide a strategy to achieve it. “It tells you what you need, but it does not tell you what it is. It also doesn’t tell you how you get it,” added Steve Gathergood, head of infrastructure services at G4S Facilities Management. Assessing competency is complex, said Gathergood. Ticking the boxes of generic statements does not accurately determine someone’s competency. “Within FM, and technical FM in particular, we should be considering
competencies as behaviours that excellent performers exhibit much more consistently than average performers.” The level of competency must be “appropriate and proportionate to the risks associated with the job or task they are doing,” Gathergood continued. “Painting a wall needs less competency than switching high-voltage electricity.” However, this does not necessarily follow in FM – because people don’t properly understand how to assess the risk of a task or job or those who are going to do them. A competence management system (CMS) is essential, said Steve Hunter, global technical support manager at JLL, who defined competence management as, “the arrangement to control and logically integrate in a manner the cycle of activities within the organisation that that will develop and inform competent people”. Such a CMS needs to be simple to use and maintain thorough records of assessments. It should also run through the HR department to
“JUST BECAUSE YOU’RE TRAINED DOES NOT MEAN YOU’RE COMPETENT”
initiate competence assessment from the beginning of the recruitment process. However, it will need to adapt as organisations, roles and staff change and evolve. tinyurl.com/FMW0218-cibse
COMPE TE N CY MA N AG E ME N T
CIBSE LAUNCHES FM COMPETENCY DOCUMENT WORDS: MARTIN RE AD
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INSIDE 17 18 18 20 20
GVA splits from Apleona Weeks to view: A month of ailing and recovery Bruce McDonnell: Avoiding meetings about meetings Comment: Debt-heavy models not too big to fail Incentive merges recent acquisitions
ACQUISITI ON
A P P O INT M E NT
Heath joins Polytech to drive strategy Construction and facilities management company Polyteck has appointed FM expert Bill Heath to its board of directors. Heath joins in the role of non-executive director to advise the board, support business development and help shape the company’s business strategy. Heath has more than 35 years of experience at senior level in the property and construction industry. He moved into FM in the early 1990s, when he was involved in the management buyout of Xerox. This led to the creation of FM company CBX, which grew under Heath’s leadership to become a £70 million business. Sulzer Corporation acquired CBX in 1998 and Heath left the firm in 2001 to join Bovis Land Lease as managing director of its FM division. In 2002 he set up Macro, the FM arm of Mace, with the support of former colleagues. In 2008 he was appointed chairman of Macro in the UK and managing director of Macro International in the Middle East. Macro rapidly expanded to deliver FM services in the UAE, Qatar, Bahrain, Saudi Arabia, Oman and Jordan. When Heath stepped down as chairman in March 2017, Macro had an annual turnover of more than £120 million, employing more than 850 people, and operating in 44 countries. Heath’s work in FM has been recognised by the industry numerous times – in 2008 FM World named him one of the UK’s top pioneers of the sector.
DIVISIONAL BOSSES IN MANAGEMENT BUYOUT OF QUARR GROUP
WORDS: HERPREET K AU R G R E WA L
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he founders of the Quarr Group have agreed a management buyout (MBO) with the directors of its three subsidiaries – Mountjoy, Nviro and Pabulum. The companies specialise in building maintenance and construction, contract cleaning and contract catering respectively. Operating for over 25 years, the Quarr Group provides services for a range of
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clients, including schools, academies, colleges, universities, local authorities, healthcare bodies, social housing providers and commercial businesses. The MBO was supported by a finance facility agreed with long-term banking partner HSBC. Anthony Reed, HSBC’s area director for Hampshire and Dorset, said: “We have been a banking partner of the Quarr Group for more than 10 years and in that time, we’ve seen the business go from strength to strength. We look forward to continuing our valued, long-term relationship with the Quarr Group as they move forward with this exciting new phase of growth.” The MBO team involves all the executive directors from the subsidiary companies and was led by the three managing directors: Brian Warren, managing director of Nviro; Nelson Williams, managing director of Pabulum; and Simon Ingram, managing director of Mountjoy. There will be no change to the existing staffing or management structure of the group which has an annual turnover in excess of £70 million (up from £3.5 million in 1992) and staff W Wemploys W. B I F Mmore .O RGthan .U K3,000 / F M WJ OIN across London and the south of England.
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V I E W P O I NT PERSPECTIVES
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Let’s just do it
Embrace a changing work environment
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DANIELLE ROSENWEIN is HR adviser at global software provider Planon North America
raditional offices as depicted in older US films, such as Office Space and TV shows such as Mad Men always have cubicles where employees sit behind colourless desks, afraid of the boss, who only comes out of his private office when something goes wrong. But in modern US workplaces most employees prefer an open, flexible setting. People want to feel involved in decision-making and shared conversation, rather than simply taking part in the daily routine. Workplaces that were notorious for their lack of diversity became open to inclusion and embraced people from different cultures, backgrounds and ethnicities. This change was partly due to HR hiring quotas, but mostly because firms recognise the value of ideas that come from disparate staff bringing in their expertise and outlook. Rather than workers taking directions from bosses, two-way communication is encouraged. Upper management is open to employee feedback and ‘junior’ employees provide innovative insights for more experienced colleagues.
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If FMs have a problem to face as workplace matures and evolves faster as a discipline, it is to keep pace with changes. For example, commercial real estate teams will increasingly experiment with co-working principles as they seek to maximise capital revenue from their property portfolios. This will lead to an impact on the shape of those spaces. FMs must be prepared to ask difficult questions of the client and the client’s team of designers and strategists. Often it is the FM’s guidance keeping the overall approach practical. There’s always room for creativity, but form cannot overrule function. Set-up and specification about things like furniture should be a given, whether it is the responsibility of the design team or the FMs or determined in collaboration. The questions asked by FMs and answered by designers As workplace designers, and the client should focus we often partner with FMs on the organisation’s culture, (we recently completed a the requirements of the scheme with Incentive FM). users, and the nature of the They are an underrated bunch brands being represented in (that’s you, dear reader), but the space being created to be their consistent strengths are managed by the FM team. adaptability, flexibility and So FMs need to get on with creativity. While they might being FM, and workplace be criticised by pundits for not professionals need to get on being innovative, what they with the design, analysis and do is respond fantastically to W W W. B I F M .O RG .U K / F M WJ O I N research. Let’s just do it. changing situations. dam Leach makes some excellent points in his piece about ergonomics and agile working (FM World December), but he may be overthinking the problem. What is the point of FM? To manage, maintain, shape and form effective workplaces (of all kinds, not just commercial office spaces). So surely what FMs need to do when faced with any challenge that may or may not involve adapting to DSE regulations or the requirements to allow agile working to flourish is this: just do it.
We in the US work long hours, but feel that we have the flexibility to do the work when and where we want. It is common to never shut down completely or to turn off our electronic devices. It’s not that we don’t value a work/life balance, but we may
“PEOPLE WANT TO FEEL INVOLVED IN DECISION-MAKING AND SHARED CONVERSATION”
“FMS MUST BE PREPARED TO ASK DIFFICULT QUESTIONS”
not focus on it as much as other countries. Organisations embrace new technologies because they understand what employees want, and how to attract talent and be competitive in the market. Some firms experiment with flexible time off. Studies have proved that it can be productive in certain jobs. FMs have the chance to create an environment that allows collaboration, combining different cultures, religions and generations. It can be a challenge, but diversity does not restrict us – it enables us to benefit from new ideas for a better future.
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STEVE BREWER is partner at workplace design consultancy Burtt Jones & Brewer
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V I E W P O I NT
F EB RUA RY@ B IF M
F M -WO R L D.CO.U K / B I F M - N E W S
excellence, innovation and talent at all levels across a plethora of FM functions and economic sectors.” There are three main themes – People, Innovation and Impact – with a number of awards covering the breadth of the sector.
People: Celebrating individuals, teams
and organisations that invest in their people, provide inspiring leadership and drive improvements. Newcomer of the Year Manager of the Year Leader of the Year Team of the Year
B IF M AWARDS 201 8
BIFM Awards 2018 - open for entries The BIFM Awards 2018 are now open for entries, offering organisations and individuals that are driving innovation and delivering exceptional results in facilities management the opportunity to step into the spotlight. Now in their 18th year, the awards celebrate the best the FM industry has to offer, honouring outstanding contributions that help to advance the profession and industry, acting as a benchmark for excellence across the FM sector. The awards ceremony is the highlight of the BIFM calendar and winners will be announced on 15 October in front of an audience of 1,200 at a dazzling ceremony at London’s Grosvenor House Hotel. The awards category portfolio in 2018 builds on the successes of last year’s additions and developments. BIFM’s team of judges have once again examined the key trends and needs of the industry,
ensuring that categories are reflective of the exceptional projects and individuals within the profession. BIFM Awards chair of judges Steve Gladwin says: “The BIFM Awards is a unique occasion that brings together the whole of the FM industry to recognise the importance of FM in facilitating the best environments in which people live, work and play. We are very proud of the importance the industry continues to place on winning a BIFM Award. “Ultimately, the awards showcase the adaptability of individuals and organisations across our ever-evolving and dynamic profession, celebrating
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Innovation: Recognising cutting-edge FM developments and the benefits they bring. New for 2018: Innovation in Professional Development for Small Organisations New for 2018: Innovation in Professional Development for Large Organisations Innovation in Technology and Systems Innovation in New Products and Services Impact: Highlighting FM’s impact on
business, the environment and society. Impact on Customer Experience Impact on Employee Experience Impact on the Environment Impact on Organisational Performance Impact on Society
So, what are you waiting for? Online entries are open and the deadline is midnight on 20 April. Full details of the award categories, criteria and application process can be found on the BIFM Awards website: www.bifmawards.org For queries, get in touch with the BIFM Awards Team: awards@bifm.org.uk
BIFM AWARDS SPONSORSHIP TO ACCESS THE FULL
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A range of sponsorship opportunities are available for the BIFM Awards 2018. Sponsoring the BIFM Awards shows your recognition of FM expertise and the key role FM plays in organisational success. Contact theBCorporate W W W. I F M .O RGTeam .U Kto / Fdiscuss M WJ O I N opportunities: corporate@bifm.org.uk
K N OW H OW
TECHNICAL EXPL AINER
KARL WALKER MIET is market development manager at Beckhoff
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n intelligent building, Karl Walker explains the definition of which how making use of was first coined by the existing building Intelligent Buildings automation control Institute, is “one which provides a productive and platforms to cost-effective environment draw all building through optimisation of four functions into one basic elements: structure, integrated platform systems, services and managemeans simpler and ment, and the interrelationmore transparent ship between them”. ‘Intelligent’ building controls management of can significantly improve energy facilities efficiency, but although there are plenty of recommendations, BUILD ING AUTOMATION there is currently no legal obligation to use them. Modern buildings are more connected than ever before, but it is not uncommon for the internal systems to be designed and installed in isolation by different companies. These ‘islands of automation’ are often not conducive to allowing interconnection between systems so the benefits of convergence cannot be realised. Open communication protocols should allow the retrospective interconnection of these systems but a higherlevel system often needs to be added to aggregate all data and make the control decisions. In any intelligent building or predictive software system data needs to be captured from all sensors and controllers throughout the building or estate and consolidated onto a single platform where the environment can be accurately controlled according to the needs of the occupiers and recommendations can be generated that can be turned into work orders for facilities managers.
ALL TOGETHER NOW
replace all the traditional used, eliminating the need for control functions too, saving any new cabling. the headache of retrospective Basing the generation and interconnections. distribution of services on By using a ‘single-system’ consumer demand at room approach the information level allows FMs to truly from a PIR presence detector maximise the effectiveness connected to a single input can of the building automation be used by any aspect of the control system (BACS). A building function – whether modern commercial building it is lighting, shading or air featuring a well-designed, conditioning – thus eliminating holistic BACS should already be the need for multiple sensors in controlling and communicating the same location. with connected assets such Using existing cabling as pumps, valves, boilers, air infrastructure, such as handling units (AHUs), fan coil DALI or KNX, can also help units (FCUs), sensors and so on. to minimise installation A number of manufacturers disruption. Where additional have adopted open protocols in switches and sensors are their products, thus facilitating required, EnOcean power the interconnection of devices and battery-less energywithin buildings. The upshot W W W. B I F M .O RG .U K / F M WJ O I N harvesting devices can be of this is that the existing
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‘Single-system’ approach
A single PC and Ethernet-based controller is able to connect all systems together, irrespective of physical network provision or protocol, and aggregate all building and asset data into one location. In a new-build or refurbishment, there’s no reason why this same system couldn’t
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FAC I LITATE
C YCLING AND FM
ILLUSTRATION: HITANDRUN
Cycling to work is good for employers’ branding, staff health and general air quality, but people need more than bike racks. Bill Dolworth finds out why 21st century end-of-route facilities require considerable thought if they’re to be done right
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ycling is either the new golf or the new Marmite. If you live and work in a city such as London, then you might have an opinion about it. But get used to it; the trend for cycling to work is growing and it’s not going to stop. According to the Department of Transport, bicycle traffic in the UK has risen from 2.5 billion in 1993 to 3.5 billion in 2016. A British Council of Offices (BCO) report into cycling, ‘The Market Cycles’, combines two surveys, one carried out by YouGov and the other by Remit Consulting. The former, which focuses on understanding the role of cycling as a daily commute, reveals that about 11 per cent of the UK are cycling office workers. In London, the number of people cycling to work increased from 77,000 in 2001 to 155,000 in 2011, according to the Census from that year. The government is backing bicycles and is looking to
double the number of cycle journeys before 2025. Cities such as Manchester, Nottingham and Edinburgh aim to increase the number of cycling trips by at least 10-15 per cent, which means that sorting out how and where these bicycles will be stored and parked from 9-5 will be a task for FM service providers. There are some commercial developments and offices that have already incorporated cycling infrastructure as a major factor in their design and management. Many of the big schemes on plan, or those that have recently gone live, do not prioritise car parking. The Cheesegrater, 52 Lime Street (the Scalpel) and 100 Bishopsgate, all of which are in London, are good examples of this shift in focus. Occupiers of these buildings have specified well-designed, functional and secure cycling facilities. This goes beyond bike racks. We are talking showers, changing facilities and a drying room – better known nowadays as end-of-route (to work) facilities. The Verde building in Bressenden Place in Victoria, also in London, does this well. Tishman Speyer, the
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FAC I LITATE
FLEET MANAGEMENT
From 2040, says the government, new cars sold in the UK must have zero emissions capability, whether hybrid or pure electric. How geared up for this transformation are fleet managements in the FM sector? By Dean Gurden ost of us take the dramatic pronouncements of incumbent governments with a pinch of salt – no increase in VAT, jobs for all, certain dubious promises made during the Brexit debates, and so on. But how seriously should fleet and facilities managers be taking the recent commitment by the British government to ban all new petrol and diesel cars and vans by 2040? Well, if anything, those in the industry believe petrol and diesel cars will be phased out a lot sooner than 2040, with electric vehicles (EVs) rapidly taking their place. “It’s so easy to underappreciate how quickly things are changing in this area,” says Ian Featherstone, fleet advice manager at the Energy Saving Trust. “They may still represent only a small percentage of new vehicle sales, but I think we could all be surprised by how quickly EVs become established. As soon as their cost gets even close to parity with conventional petrol and diesel, and vehicle ranges are a little bit higher than the very latest models, then there will be very little reason not to go for them.” But are fleet managers getting on board with the inevitable changes that are coming their way? According to Katie Colledge-Price, managing director of Carpendale EV Consulting, they could be doing more. “I think there is still some reticence among them to go electric because the education isn’t happening. Car manufacturers and government are telling the leasing companies to go electric, but a lot of the fleet managers don’t really know anything about it,” she says. Fleet managers need to talk to people that have actually done it, and know the pitfalls and where things can go wrong, urges Colledge-Price. She points to the Energy Saving Trust (energysavingtrust.org.uk) as a great source of information. And Go Ultra Low (goultralow.com) also oversees clients that are introducing or using EVs and hybrids in their fleets right now.
TO ACCESS THE FULL VERSION OF FM WORLD MAGAZINE, Do FMs dream of electric cars? In considering whether to go electric, always take a whole-life cost approach JOIN BIFM to the cost of the vehicles, counsels Jon Lawes, managing director of vehicle W W W. B I F M .O RG .U K / F M WJ O I N leasing provider Hitachi Capital Vehicle Solutions.
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FAC I LITATE
FLEET TECHNOLOGY
“A new Euro 6 diesel remains the best allround option for most fleet drivers, especially those covering high miles when a balanced view of costs, the environment and taxation is taken into account,” he says. “Petrol is the obvious alternative, but delivers worse fuel consumption and CO2. The real-world performance of many hybrids compared to their official MPG and CO2 figures is questionable, while electric vehicles remain a niche choice. Our advice is not to make any rash decisions but to take expert advice before making any policy decisions.”
“2020 WILL SEE THE INTRODUCTION OF THE WORLDWIDE HARMONISED LIGHT VEHICLE TESTING PROCEDURE AND THE LAUNCH OF CLEAN AIR ZONES”
PHOTOGRAPHY: GETTY
Legislative drivers
In its bid to cut emissions, increase the adoption of ultra low emission vehicles (ULEVs) and protect revenue, the government has created several challenges for businesses, which include the new long-term approach to benefit in kind. “Transport and fleet management is perhaps the most heavily legislated sector in UK business. In April, we’ll see a change to the emissions level at which the 18 per cent writing down allowance (WDA) is applicable, taking it from 130g of CO2 per kilometre to 110g per kilometre. In addition to impacting the WDA it will also impact lease rental restriction (LRR) and the tax cost borne by businesses,” says Ashley Barnett, head of fleet consultancy at Lex Autolease.
“Our recommendation is not to remove non-compliant vehicles from the choice list altogether, but to pass on the tax implications to employees who choose a higher emissions option. Choice is an important element of reward strategy so the key is to avoid employees using their own cars for work or taking the cash alternatives, by incentivising the use of low emissions vehicles but ultimately giving them the flexibility to choose a car that they want.” Financial reporting will be more complex when the new IFRS 16 Lease Accounting Standards come into effect on 1 January 2019. Elements of General Data Protection Regulation law are also set to change how fleet managers assess the make-up and scope of their fleet. “By understanding the potential impact now, fleet managers and finance departments can manage risk and reduce costs by resolving any issues in advance,” says Barnett. Far more data will be required, which poses storage and management implications. Fleet operators will need to ensure that they have quality management information from leasing suppliers if they are to be compliant. Such is the complexity brought about by both legislative and government policy changes that the viability of some schemes is likely to be compromised.
With oil prices heading towards $70 a barrel in January, the fuel squeeze is on in the UK
More change in the pipeline.
Barnett says: “The majority of fleets that plan in three-year cycles or longer will need to start preparing for 2020, which will see the introduction of the Worldwide Harmonised Light vehicle Testing Procedure (WLTP) and the launch of clean air zones in five cities. The WLTP has potential implications for both the tax regime and emissions reporting and older, more polluting vehicles will face charges to enter cities, and may even be excluded altogether.” Businesses are already shifting towards ULEVs to support their lowemissions strategies and to maximise tax efficiency. The introduction of the Real Driving Emissions (RDE) 2 test and W W W. B I F M .O RG .U K / F M WJ O I N WLTP is likely to accelerate this change.
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February 2018
FM WORLD IS THE MAGAZINE OF THE BRITISH INSTITUTE OF FACILITIES MANAGEMENT, TO GET ACCESS TO THE FULL PUBLICATION JOIN BIFM TO RECEIVE YOUR COPY OR IF YOU ARE ALREADY A MEMBER, LOGIN FOR YOUR ONLINE COPY HERE WWW.BIFM.ORG.UK /FMWORLD
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