Purpose

This report seeks Cabinet approval to initiate
a five-year vehicle procurement programme, through a series of
tenders valued at up to £25 million. This investment will
directly support the delivery of Newham’s Air Quality Action
Plan (AQAP) and ensure the Council’s fleet remains compliant
with the legal requirements of the London Ultra Low Emission Zone
(ULEZ).
 
In the next 5 years, 320 currently leased
vehicles have been identified for replacement. However, following a
detailed review with service departments, an additional 180 hire
vehicles can also be converted to lease, potentially delivering
significant cost savings to the council of approx.:
£5.7million. This report therefore requests delegated
authority to award finance lease contracts for up to 500 vehicles,
at an estimated cost to the council of £25million over the
years 2025/30.

Decision

For the reasons set out in this report and its
appendices, Cabinet RESOLVED to Agree to:
 

i) 
Approve the replacement of the vehicles set out at para 4.4.4 over
a five year period at a maximum cost of £25 million, noting
that where a needs analysis identifies a reduction in fleet numbers
is appropriate, this will be implemented.

ii) 
Delegate authority to the Corporate Director of Environment &
Sustainable Transport, in consultation with the Corporate Director
of Resources and Cabinet Member for Environment, to:

· 
Make all decisions and enter into all contracts and documentation
required to give effect to the decision at 2.1 in line with the
replacement strategy set out in this report. Final lease agreements
will be subject to the budget available and may vary depending on
market conditions at the time of award.
 
Alternatives
considered
 

a) 
Option1: Extension of Existing Lease Agreements One option
considered was to extend the lease agreements for the current
council fleet. However, this approach carries a financial risk, as
many of the vehicles will be out of warranty beyond the fifth year.
Any repairs required would therefore be at the Council’s
expense, whereas under new lease 10 agreements, the Council would
only be liable for costs associated with fair wear and tear. While
this option may appear economically viable in the short term, the
long-term maintenance liabilities make it less favourable.

b) 
Option 2: Do Nothing Maintaining the status quo was considered.
However, the current council fleet—acquired as part of the
in-sourcing of Street Cleansing services—was originally
composed of second-hand vehicles. Since 2022/23, the cost of
repairs and maintenance has increased by approximately 130%
year-on-year, making this option financially unsustainable and
operationally inefficient.

c) 
Option 3: Replace Fleet with Hired Vehicles Another alternative was
to replace the existing fleet with hired vehicles. While this would
ensure compliance with emissions standards, it would result in
significantly higher costs—estimated at 25% to 50% more than
the proposed leasing option. This approach would also not provide
the same long-term value or operational control.

d) 
Option 4: Full Replacement with Electric Vehicles A full transition
to electric vehicles was also considered. However, this option was
deemed unfeasible at this stage due to the lack of sufficient
charging infrastructure at the Central Depot and the substantial
upfront capital investment required. This remains a longer-term
ambition, to be revisited as part of the Council’s depot
redevelopment and infrastructure planning over the next 5
years.