With Arend Mouton, Group Fleet Manager at Wates Group
Introduction
Founded as a housebuilder in 1897, Wates Group has evolved to become the UK’s leading family-owned development, building and property maintenance company.
We provide a range of building services in the housing, education, healthcare, emergency services and commercial sectors.
Today, in its fourth generation of family ownership, Wates Group continues to grow. Driven by its purpose of reimagining places for people to thrive, we are committed to excellence and sustainability across all operations.
As a large organisation involved in the development, building and property maintenance, we recognise the impact of our operations on the environment. Our operations are supported by a large and complex company car fleet, which forms a significant part of our impact.
We need ambitious strategies if we are to achieve our objectives to lower emissions and decarbonise our operations.
After fifteen years overseeing the City of London Police fleet, Arend Mouton joined Wates Group in 2018 as Group Fleet Manager.
Tasked with driving efficiency and sustainability in Wates Group fleet operations, Arend has since met the significant challenges of the last few years and developed sustainable employee mobility solutions that recognises the needs of the business, the workforce and the environment.
Since Arend started at Wates, the Group company car fleet has continued to grow and now surpasses 700 vehicles, with more than 500 fully electric and 85 hybrid vehicles. The average CO2 emissions for the fleet has reduced to 18g/km – an industry-leading figure.
Essential Fleet Manager Magazine was delighted, therefore, to speak with Arend about the challenges and achievements he has achieved with Wates Group to date and how things are planned to develop in the future.
Interview
Q: There have been huge changes since you joined Wates Group in 2018. Could you describe how, at the time, the company car fleet was structured and what your immediate plans were to develop and implement a viable Company Car Scheme?
Within Wates, we realised we had many different business entities, each with a different historical approach to business travel. We needed to simplify our Group processes, so we created a tender to outsource our company car provision, enabling us to offer safe, reliable, and appealing vehicle options to eligible employees.
As the majority of our employees at the time were opting for a cash allowance rather than a company car, there was also a need to improve our management of employee-owned vehicles, in other words, our Grey Fleet – a requirement we added to our tender.
To manage the new Company Car Scheme, we formed a new, dedicated Wates Group fleet team.
We awarded the tender to Zenith and started building a safe and secure system, allowing for the integration of data to flow between our existing internal systems and our new Company Car Scheme.
The work involved in setting this up cannot be underestimated, bringing together HR records, invoicing, finance, vehicle records, the business mileage claims system and payroll, to name just a few.
Q: What were the business objectives of the Company Car Scheme, and what were the challenges in engaging employees in the first two years?
We needed a user-friendly solution to allow our employees to view their options through an online portal, run quotes, place orders, and manage their cars’ in-life events while having access to all the necessary information and support.
Our primary objective was to make the most suitable, safe and desirable vehicles available to all eligible employees. We also had an overriding aim to increase the take-up of fully electric vehicles (EVs) to reduce our greenhouse gas emissions.
The initial two years saw low adoption rates due to the limited availability of fully electric model options and the impending Worldwide Harmonised Light Vehicle Test Procedure (WLTP) changes. This caused many employees to avoid committing to long-term deals with Internal Combustion Engine (ICE) vehicles, especially with the increasing Benefit in Kind (BIK) tax rates, which made ICE company cars unaffordable.
One key risk associated with a Company Car Scheme is the potential for early termination penalties. To mitigate this risk, we offer our employees desirable cars, making it easier to reallocate them if employees leave the business.
Q: Early in 2020, the pandemic significantly impacted your fleet strategy. Could you describe how this, along with changes to WLTP rules and you taking on the additional role of managing the Property Services fleet, led to a challenging period and how you met those challenges?
In 2020, I took on managing the Wates Property Services’ fleet in addition to the existing Wates Group company car fleet. At that time, the combined fleet consisted of over 1,000 vehicles (including around 750 Lignt Commercial Vehicles (LCVs) and 250 company cars). At the same time, we had three upcoming contract mobilisations across the country, with 180 vehicles required for delivery in just six weeks.
Shortly after, COVID arrived and lockdown was imposed.
To address the new challenges, we swiftly shifted to an online working platform and implemented a rota system to staff our depots. Fortunately, we had excellent suppliers who collaborated effectively to deliver all vehicles on time.
To further support our teams across the country, I conducted live online training sessions that were simultaneously broadcast to multiple sites.
Many of us were working from home during this time, and we suddenly had easy connectivity through conference calls, chat and screensharing between colleagues, clients and partners from anywhere in the country.
Then, two significant events occurred: the global microchip shortage and the invasion of Ukraine.
These events led to production slowdowns and significant price increases, which had a huge impact on UK fleets.
Q: Following that period and your return to full-time Wates Group employee mobility fleet responsibility, how was the company car scheme set up and how was employee access to the scheme graded?
Due to the supply chain crisis and Wates’ goals of enhancing sustainability and reaching zero carbon emissions, it was necessary to divide the management for the car and van fleets.
A new role was created to manage the electrification project for our commercial vans within Wates Property Services and I returned to Wates Group full-time focusing on the car fleet and the full electrification of the company car fleet.
The Company Car Scheme required attention. The Whole Life Cost (WLC) model was presenting challenges and we were not able to offer the cars we wanted to be able to provide.
This was due to several factors, including manufacturer price increases, removal of all the Plug-in Grants and a more than 45% rise in fuel prices, plus increased interest rates.
I set out to review our car scheme and came up with the following options which were all agreed and implemented:
- Remove all Internal Combustion Engine (ICE) models from the Company Car Scheme with immediate effect, in line with the Wates’ Environmental Sustainability Plan.
- Reduce assumed business miles claimed to 6k on WLC calculation due to reduced mileage claims.
- Include the corporation tax benefits in the WLC calculation.
- Allow trade-up by two grades for EVs only, due to BIK savings.
- Introduce a Car Salary Sacrifice benefit for all employees.
Q: Your company’s car strategy aims to maximise end users’ use of zero/low emission vehicles. How has the EV landscape changed over the past two years to make these vehicles more appealing to drivers? As a result, how has this made your goals more achievable?
In Feb 2022, we restricted the manufacturers for our ICE vehicles and limited our selection options.
However, to increase the options for full EVs, we had to consider as many new manufacturers as possible. We observed a steady growth of EV models entering the market with increased ranges, incredible performance, and low BIK. As a result, our EV uptake increased exponentially.
The grants available to support home charge points also contributed significantly, and some manufacturers who included charge points as part of the lease proved very popular.
Q: To fully realise the potential of EV adoption, what are the current policies of the company car scheme regarding the vehicles available to each grade?
For employees at managerial grades and above, we exclusively provide full EVs.
However, for lower grades, we allow exemptions for essential users exceeding 10,000 business miles per year. It is challenging to offer a wide variety of options in lower grades with long driving ranges due to the inherent costs of EVs.
We also understand that many employees cannot install a charge point at home and frequently undertake long journeys, making some EVs unsuitable. We evaluate all requests for internal combustion engine (ICE) vehicles on a case-by-case basis.
Q: Besides the obvious environmental benefits of electric vehicles (EVs), what are the other advantages for end-user drivers?
We understand that an EV may not be suitable for all your monthly or annual travel needs.
However, switching to an EV is worth considering if it can cover more than 85% of your journeys. Some employees may have limited travel each month and might rely on public charging networks, which requires more advanced planning. However, with the number of electric vehicle charging points increasing by over 46% annually, charging opportunities are rapidly expanding.
When you choose a fully electric company car, the savings in Benefit in Kind (BIK) and fuel costs far outweigh the expenses of a similar ICE vehicle.
Even after accounting for the cost of a home charge point or occasional public charging, you could save hundreds of pounds annually and thousands over the lease term.
Q: With a total workforce of circa 4700 and more than 2,500 eligible drivers, at various grades, to join the Company Car Scheme, you have also added a Salary Sacrifice Scheme to bring further efficiencies, risk reduction and sustainability to the business. This is a great benefit that drives employee retention. How does the Salary Sacrifice Scheme work alongside the Company Car Scheme to help Wates Group meet its objectives?
We partnered with Tusker for our Salary Sacrifice Car Scheme and found that it is a great complement to our Company Car Scheme.
It is available to all employees within affordability parameters, not just those who need to drive for business.
This allows employees to choose any vehicle that suits their needs, without the restrictions of the Company Car Scheme. The Salary Sacrifice Scheme also protects the company in case employees leave the business and return the vehicles early.
We have found that Vehicle Salary Sacrifice is better suited to higher taxpayers with lower mileage needs than company car drivers who cover high mileage. This is because high mileage can affect the Whole Life Cost due to additional servicing and a reduction in residual values, making Salary Sacrifice less affordable compared to company cars where we pool mileages.
Q: Both schemes will reduce the risk and inefficiency associated with Grey Fleet. To achieve this, how do you support drivers in adopting EVs with access to the charging infrastructure or home charging, and how do you manage the costs?
Wates has initiated a tender process to find an electric charge point provider to enhance our sites and provide charge point facilities for any contracts requiring them, with the aim of increasing the accessibility of charge points for all our employees.
At present, home charging is still the best option due to the increased demand for charging at work – workplace charge points remain unfortunately limited and are provided on a first-come, first-served basis.
Q: As your operations have evolved, they have become increasingly challenging to manage. How have you used fleet management technology to ensure compliance, safety, and efficiency?
We initially managed our fleet using a straightforward spreadsheet, but I knew we needed to implement a more robust fleet management system. However, I had to justify the costs to fit our current budgets.
We searched the market for options that would meet all our fleet requirements and opted for the Key2 fleet software system provided by Jaama. This system enabled us to bring our Grey Fleet management back in-house and included a driver portal for employees to upload their private vehicle documentation directly to our database. Additionally, the Jaama software offers a direct DVLA licence-checking module.
The functionality provided by the Key2 software would allow us to eliminate the costs of managing the Grey Fleet through an outsourced provider and to divert the funds for its implementation. Overall, the Key2 software has given us more functionality to manage our assets and ensure compliance.
Q: You mentioned that you limit the types of vehicles offered in the company car scheme to promote EV adoption and manage reallocation and disposals. How do you ensure that there is still a diverse and appealing selection of vehicles for the end-users to choose from?
We always have several unallocated company cars readily available, compared to the long lead times when ordering new vehicles. We reserve the right to offer these vehicles to anyone joining the scheme. We also only approve orders for vehicles with over 200 miles WLTP range, decent size, and a popular colour choice.
To ensure Wates can offer the most attractive range of cars, I manage direct relationships with all the vehicle manufacturers. This means that Wates Group is able to secure the best possible terms and after-sales support, whilst still working with our Salary Sacrifice and Company Car Scheme providers.
Q: Your most recent data indicates that your Company Car Scheme and Salary Sacrifice Scheme are gaining popularity among drivers. What are your goals for further expanding this success and where do you envision things in 2 years?
I am incredibly proud to say that the Wates Group fleet surpassed 700 vehicles for the first time in July 2024, marking a 166% growth over the past 24 months.
Our fleet now includes over 500 fully electric vehicles, accounting for 72% of the total, along with 85 hybrid electric vehicles making up 12% of the fleet. Only 16% of the fleet is now made up of combustion engine vehicles.
The average CO2 emissions for the Wates Group fleet have now reduced to 18g/km, which is leading in our industry. Additionally, we have 80 more full EVs on order, which is expected to improve our CO2 emissions further.
Over the next two years, restrictions on grey fleets, which have higher CO2 allowances and are older, will be tightened to help us meet the targets set by the Energy Savings Opportunity Scheme.
This Fleet in Focus article was featured in Issue 6(2024)
