When I submitted this paper to Council’s Strategic Finance Committee in October 2020 , the 250-strong Association of British and Irish Councils (NFLA) had already advised to all Councils on these Islands in 2019 “Stop buying ICE-engine fossil fuels immediately” . Not just as a key way to tackle Climate Change, but because over their lifetime EV versions of almost all classes of car and truck were cheaper. But our Council was pressing on with a multi-million plan to buy over 50 all-diesel vehicles. Go directly to the bottom of this post if you want to find out where we are in 2023
PROPOSAL TO COUNCIL’s STRATEGIC FINANCE WITH DUNDEE AS EXAMPLE
The jury is no longer out on the future of Council fleets of cars and vans. Councils across Britain and Ireland are switching their fleets to electric vehicles because it is cheaper. We currently spend £300,000pa on diesel for our light cars and vans with total costs in the region of half a million. Total diesel costs per annum now exceeds £1 million including our heavy vehicle fleets.
Our Council jointly chairs the British-Irish Nuclear-Free Local Authorities Association (NFLA). NFLA recently published a 10-point action list for local authorities in Britain and Ireland on tackling Climate change. Point 4 in the action list is simple. It says “Stop buying fossil fuel vehicles immediately”. We have known this for nearly a year but have so far done nothing about it
WHAT DUNDEE COUNCIL SAID TO NM&D AT THE KILLEAVEY HOTEL LAST MARCH
Many of you were at the Council’s Climate Change Symposium in March. You saw the very impressive presentation from Dundee’s Fraser Crichton, Corporate Fleet Operations Manager of Dundee City Council.
Dundee Council’s Own Vehicles As Dundee has switched its entire fleet of 101 vehicles to electric, they have also installed chargers on Council premises, and many supplied from Council’s own EV panels so essentially running with no fuel costs..
Not just in GB, but also across the boarder we are seeing Councils switch whole fleets to electric to save money – see this report from RTE on Cork Council saving E700,000 pa by switching its 76 vehicles to electric.
The fuel and maintenance costs for EV’s are much lower than for internal combustion engine (ICE) cars or vans. The capital cost is a bit higher but falling rapidly. Council can use its low borrowing cost to replace its fleet and get an immediate revenue-line benefit from their lower running costs. Fuel costs could be entirely eliminated if depots or car-parks for the Council Fleet fitted with PV arrays and batteries. See cost analysis from Dundee on next page.
A joined-up approach to our non-refuse fleet of vehicles and the depots they operate out of would allow us to transition to much lower costs. Capital expenditure on EV’s in place ICE vehicles with resultant lower expenditures on fuel is cheaper for Council. But if we generate and store our own power at fleet depots, we can make even bigger gains. Maintenance, tax and long-term cost over ownership is also cheaper for EV’s
EXAMPLE ‘WHOLE LIFE’ COSTINGS FROM DUNDEE COUNCIL
Dundee Council were assisted in building the business cases for switching their fleet to electric and converting their car-parks with PV panels and batteries by a company working with a long list of Councils across the UK called ‘Urban Foresight’. I contacted their head of electric mobility Gary McRea and asked for some worked examples that would give me as a Chartered Accountant the confidence I was not barking up the wrong tree in advocating a switch to EV’s for NM&D.
Urban Foresight supplied me with real life examples of possible savings from the switch to electric vans. The fuel costs, maintenance costs and purchase price are examples using data from a number of councils.
The costs are analysed in two ways – recognising that reductions in revenue costs are often more significant to Councils when balanced by minor increases in borrowing costs.
Option 1 – Whole Life Cost of the vehicle – this includes purchase cost with depreciation of a vehicle down to 10% of its value over 7 years. This shows a slight overall saving on switching to an electric vehicle but includes high upfront purchase costs for electric vehicles. The cost of electric vehicles is falling rapidly and in any case Councils have access to cheap borrowing.
Option 2 – Looks at operational costs only, so assumes increased capital investment on more expensive electric vehicles. This shows a significant operational saving over the 7 year life of the vehicle, through fuel, maintenance and VED tax.
Gary McRea noted that both these options are based on standard electricity costs, so if you were able to cost effectively produce your own electricity then there are additional savings to be made.
I proposed in 2020 that we request Dundee’s EV infrastructure team be asked to do an audit of our fleet management policy and our car-park infrastructure and help us prepare a business case for each. Dundee would be happy to find someone to help draft a business case for us if we were to cover the cost of someone working over here for several days.
HENRY REILLY, DUP COUNCILLOR FROM THE MOURNES ALSO HELPED
I was greatly assisted by Mournes Councillor Henry Reilly who backed me up on the ‘best practice way’ to decide what vehicles to buy in each class. The simple cost price meant nothing really, if you ended up with something that was continually breaking down, had high maintenance costs and drank diesel. As we both had a private sector background we were able to engage management on this point.
Once life-time costs are considered EV’s tend to win out over diesel on account of lower maintenance and fuel costs. Even ignoring the cost of carbon used by GB Councils. And their capital costs have also dropped significantly since I made the presentation above. See Henry’s Facebook page here
Regardless of you position on Climate Change – we have a responsibility to find ‘best value’ for Council
SO WHAT HAPPENED? HOW DID COUNCIL DO IN 2022/2023 ?
Two years after management accepted in principle that ‘cost price’ of a vehicle was not the correct metric to be buying vehicles for our fleet BUT that we should be using overall ‘life time cost’ instead we are still buying vehicles without doing a cost comparison with their electric equivalent.
With the help of Mournes Councillor Henry Reilly during 2021 and 2022, we did succeed in getting ‘whole life cost’ considered for light vehicle. And EV’s won out.
But management were still saying that there were no charging points in some depots and this blocked the cheaper-to-run EV’s ! IE “the Council has agreed an interim fleet replacement strategy whereby any vehicles over 3.5T GVW will be replaced by modern, more efficient diesel engines, whilst at the same time prioritising alternative-fuelled (EV etc) in the class below 3.5T GVW. The latter is also dependent upon having sufficient EV charging infrastructure in our depots.”
The fact that we have declared a ‘Climate Change Emergency’ suggests that putting in EV charging points to tackle this impediment to progress might be a rather obvious idea. Rather than using the lack of charging points as a reason to buy more expensive vehicles?
At the Council meeting in December 2023, I had the following amendments done to the minutes of Council
- The ‘whole life cost’ of vehicles should always be considered for every class of vehicle – not just cost price
- That a price comparison should always be conducted against the equivalent EV vehicle – specifically in this case street sweepers and forklift trucks
- That the Newry depot be rechecked to see why we cannot have EV charging points installed like in Downpatrick and we should be moving towards depots that were roofed with PV panels to supply free fuel as in Ardglass Harbour