MOD targets £100m savings through new fleet management contract

10 May 2016

The Ministry of Defence (MOD) is aiming to make savings of £100m with a new contract for its fleet of lease and hire vehicles.

The MOD has awarded £47m to Babcock, which manages the fleet of cars, vans, trucks and specialist vehicles the ministry uses in the UK and Northern Europe, as well as short-term hire globally.

Under the new contract Babcock will manage the fleet, including the procurement of vehicles via the Crown Commercial Services, incident management, administrative services, including vehicle registration, service, maintenance and repair management.

The service will start on mainland UK in September, followed by Northern Ireland in October and the rest of the world in April 2017.

The MOD uses hire or lease vehicles to transport personnel and equipment often to areas not readily accessible by public transport. The vehicles are used to move defence personnel and stores to support military operations or training exercises, mountain rescue and emergency support to the civil authorities and communities, such as flood relief.

The new contract follows the Defence Secretary’s instruction last year that the cost of vehicle hire was reviewed and reduced.

The MOD said that the contract offered the opportunity to trigger a change in culture with greater use of scheduled transport services and vehicle sharing. The Army, which is the MOD’s largest user of fleet vehicles, is already using a car pooling hub at Aldershot.

Defence secretary Michael Fallon said that Defence had the strongest incentive to be efficient. “Every pound that we save on vehicle hire will be reinvested into a defence budget that keeps Britain safe,” he said. “I want to see us meet and exceed the £100m target.”

Brigadier Colin McClean, the Army’s head of equipment, said: “The use of lease and hire vehicles is an important part of Defence’s overall ability to both train for and deliver its operational taskings and I know I speak for soldiers, sailors and airmen when I say that we look forward to working very closely with Babcock and in particular to achieving financial savings through the more efficient use of this vehicle fleet.”

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