New £1 billion deal to cut costs and carbon emissions on government vehicles Deal will save taxpayer £100 million and help government meet sustainability targets.
Government cars and vans will become cheaper and cleaner over the next four years with a new billion pound deal being signed this week.
Fifteen vehicle manufacturers will be providing vehicles to over 38 government departments and organisations, in one of the largest ever collaborative procurement exercises in the UK public sector.
By joining together, the departments - led by the Department for Work and Pensions and the Office of Government Commerce - have managed to secure a better deal for the taxpayer, saving £100 million on 78,000 vehicles over the next four years.
The deal, which will be open to the entire public sector, will allow organisations to replace their existing fleets with greener, cleaner vehicles at a reduced cost, in line with the government's target for reducing carbon emissions from its vehicles by 15% by 2010/11.
The Department for Work and Pensions alone is forecast to save at least £5 million on the cost of its fleet and to cut CO2 emissions by around 4,500 tonnes.
Lord Hunt, minister at the Department for Work and Pensions, said:
"I am pleased that the efforts of DWP, OGC and departments across government have resulted in this groundbreaking deal. It is an excellent example of collaboration that will not only contribute to the Government efficiency goals but will also help the public sector to hit its targets on vehicle emissions."
John Healey, Financial Secretary to the Treasury, said:
"Deals like this one reflect the government's commitment to procure in a way that is both value for money and sustainable. It provides a clear and important example of how we can cut the environmental impact of our actions while also providing a better deal for the taxpayer."
Government departments participating in the deal can see the full financial cost and carbon footprint of their vehicle needs using a ground breaking model developed by the Office of Government Commerce. With the help of the model, departments can plan future vehicle purchases, including switching to cleaner, cheaper to run models, to achieve their target environmental and efficiency savings.
As well as delivering lower per-vehicle prices for the public sector, the deal will also save government millions by eliminating costly multiple tendering procedures. Currently public sector organisations operate individually negotiated contracts with car manufacturers.
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Notes to Editors
Manufacturers involved in the DWP-led framework agreement include: BMW, Citroen, Daimler Chrysler, Fiat, Ford, Honda, IVECO, LDV, Nissan, Peugeot, Renault, Toyota, Vauxhall, Volvo and Volkswagen.
Key departments which will be replacing large numbers of vehicles in the new agreement and/or who played a key role in the tender process include:
- NHS Purchasing and Supply Agency
- HM Revenue and Customs
- HM Prison Service
- Environment Agency
- Government Car Dispatch Agency
- Firebuy
In all, over 38 central government departments and organisations will be participating in the first stage of the deal. A further 19 local authorities and regional organisations have already expressed interest in joining in the second stage. The deal is open to all public sector organisations.
The main features of the new agreement include:
a. a guaranteed baseline support rate, irrespective of the size of an organisations fleet, which equates to a saving of up to £700 per vehicle for some public sector organisations; b. enhanced support rates for limited badge deals, adding up to a total potential saving of up to £1200 per vehicle.
There are currently over 300,000 public sector vehicles in the UK.
The Office of Government Commerce is an independent office of the Treasury. It acts as a catalyst in the public sector to achieve efficiency, value for money, and successful delivery of Government projects. One of its key priorities is supporting the public sector's target of £21.5 billion annual efficiency gains by 2008, of which local authorities are due to deliver £6.5 billion.
This deal forms part of the Office of Government Commerce's fleet strategy, which aims to deliver greater efficiency from the £2.2 billion spent annually in the public sector on fleet and related activities. Over the next 12 months, NHS PaSA and PITO will lead further pan-governmental collaborative deals for windscreens, tyres and leasing. OGC is also seeking to help the public sector reduce the environmental impact of its fleet by looking at ways to manage the so-called "grey fleet" - where public employees use their own cars to make business trips.