Purpose

The fleet in Vecteo arrangements have now expired and Vecteo has requested to utilise the TPPL fleet framework that Southend City Council is a member of. The procurement arrangements will enable the fleet to be transitioned to part electric which will support sustainability and increasing fuel cost.

Decision

That the award of a call-off contract through The Procurement Partnership Limited (TPPL) Fleet Framework for the provision of replacement fleet vehicles and associated fleet services for a period of 5 years commencing in October 2026 at an estimated value of £805,608.00, be approved

That authority be delegated to the Executive Director of Finance and Resources to finalise and approve the entering into of the contract and all associated documentation.

That the authority be delegated to the Executive Director of Finance and Resources, in consultation with the Cabinet Member for Finance and Transport , to exercise any options to extend the contract in accordance with its terms, subject to satisfactory contract performance and available budget provision.

That authority be delegated to the Executive Director of Finance and Resources to agree that The Council will remain the contracting party under the resulting call-off contract. It is proposed that Vecteo Limited, as a wholly owned company of the Council, will undertake the day-to-day operational management of the fleet and supplier relationship. These responsibilities should be clearly documented through an appropriate Service Level Agreement or equivalent governance arrangement to ensure accountability, contract management responsibilities and risk allocation are clearly defined.

Reasons for the decision

In October 2024, the Vecteo Limited Shareholder Board agreed for officers to explore the option for South Essex Property Services (SEPS) to take a role in the governance of Vecteo Limited. As part of this work, a review of passenger transport services was undertaken jointly by Vecteo Limited and the Council. The review considered the future delivery model for transport services and the associated fleet arrangements inherited from the former Joint Venture structure.

The review identified that the current vehicle lease arrangements with London Hire Community Services are operating under a three-month rolling contract, which is subject to one month's notice, creating potential operational and financial risks should alternative arrangements not be secured. Recognising the need to establish a sustainable long-term fleet solution, the Council Procurement Team worked closely with Vecteo Limited to develop and progress a procurement approach. The Council has supported the process throughout, leading market engagement and procurement activity to ensure compliance with procurement regulations and access to competitively sourced fleet solutions.

The TPPL framework provides access to a range of pre-qualified suppliers offering vehicle purchase, contract hire, leasing and fleet management solutions through a nationally recognised public sector procurement. framework. The framework will provide greater certainty over future fleet provision, reduce risks associated with the current leasing arrangements and support the continued delivery of essential transport services. It also represents an important step in Vecteo Limited transition from original arrangements in place within the former Joint Venture model, strengthening the long-term sustainability, resilience and governance of the company.

Following the transfer of governance arrangements and completion of the jointly commissioned Passenger Transport Services Review, Vecteo Limited in conjunction with the Council considered the long-term sustainability of the current passenger transport operating model.

The review identified that the existing vehicle lease arrangements, which are subject to only one month's notice, present an ongoing operational and financial risk to the company. As a result, it was agreed that a more sustainable and compliant long-term solution should be developed through a formal procurement exercise. Working collaboratively, the Council's Procurement Team has supported market engagement and procurement activity on behalf of Vecteo Limited to ensure compliance with procurement legislation, strengthen governance, secure value for money and provide resilience for future service delivery.

 The proposed procurement will provide greater certainty over future fleet provision, reduce operational risk and support the continued delivery of essential transport services. It also represents a further significant milestone in Vecteo Limited to transition from the former Joint Venture model, establishing arrangements that are sustainable, commercially robust and aligned with both the Council's and the company's long-term objectives.

Alternative options considered

Procure Fleet Vehicles through the TPPL Framework (Recommended)

The option of procuring replacement fleet vehicles through The Procurement Partnership Limited (TPPL) Fleet Framework was considered and identified as the preferred approach. This option provides a compliant and efficient route to market, delivering value for money and fleet replacement within the required timescales. Following completion of the procurement process, London Hire was identified as the successful supplier. This option provides a sustainable and resilient fleet solution, supporting the continued delivery of Passenger Transport Services and is therefore recommended.

Procure an In-House Fleet (Full Insourcing)

The option of procuring and operating a fully in-house fleet was considered. This approach would provide the Council and Vecteo Limited with full control over vehicles, drivers, service standards and operational delivery. However, it would require significant capital investment or long-term leasing commitments, together with responsibility for vehicle maintenance and ongoing fleet management. As such, this option was not considered the preferred solution.

Alternative Procurement Routes

The Council reviewed a number of procurement routes and framework arrangements, including options available through local authorities such as Lancashire County Council and Essex County Council. Consideration was also given to the implications of Local Government Reorganisation (LGR), particularly in relation to Essex County Council's future service and procurement arrangements. Following an assessment of value for money, supplier availability, implementation timescales, contractual flexibility, procurement compliance and long-term service resilience, the TPPL Fleet Framework was determined to be the most advantageous route to market and was therefore used to undertake the procurement exercise.

Retain Existing Arrangements (Do Nothing)

The option of retaining the current arrangements was considered. Whilst this would avoid immediate implementation costs, procurement activity and operational disruption, it was not considered a viable long-term solution. The current arrangements will become non-compliant upon expiry on 31 July 2026, limiting the Council's ability to meet its procurement obligations. In addition, the existing fleet is ageing and would not address ongoing vehicle replacement requirements, cost pressures, market limitations or the need for a more resilient and sustainable fleet provision model. As such, this option is not recommended.