Docstoc

City-of-Westminster

Document Sample
City-of-Westminster Powered By Docstoc
					ITEM NO

City of Westminster Decision-maker
Cabinet Member for Customer Services

Date
18 October 2002

Title of report
Lord Mayor’s car

Classification
For general release

Report of
Chief Executive Nil To provide the Council with both appropriate and reliable transport for the Lord Mayor This report seeks approval to the purchase of a second hand Rolls Royce as the Lord Mayor’s car at a trade-in cost of £90,260 Lawrie Smith – 020 7641 2015

Wards involved Policy context Financial summary

Report Author

1.

Summary

1.1 The Lord Mayor's car (WE1) has been off the road on many occasions in the last few years needing repair and has become increasingly expensive to maintain. This report sets out the need to urgently provide the Council with both appropriate and reliable transport for the Mayoralty and recommends the trade-in of the current Daimler for a second hand Rolls Royce Park Ward. The resultant revenue savings will contribute to the savings targets in the departmental budget of the Lord Mayor's office as part of the Council's star chamber process. 2. Recommendations

2.1 That the Daimler Limousine (WE1) be traded-in for the second hand Rolls Royce Park Ward referred to in paragraph 3.3 below at a capital purchase price of £90,260 (excluding Value Added Tax). 2.2 That it be noted that the cost might be reduced further by an estimated £5,000 by the sale of a wheel chair adapted Volkswagen Sharan that was donated to the Council, for use by the Mayoralty, some five years ago and that has reached the end of its useful operational life. 2.3 That it be noted that the Managing Director of ACIT Services Ltd (the Council’s internal auditors) has confirmed that the vehicle, if obtained by the Council, would not only be an excellent replacement for the existing car, but would also be excellent

value for money and potentially provide the Council with appropriate and reliable transport for the Lord Mayor for many years to come. 3. Background

The need for a new vehicle 3.1 Officers have been looking for some time for a replacement for WE1. This replacement is urgently required because the vehicle in question – a Daimler Limousine – is now old (first registered in 1987) and has been off the road on many occasions in the last few years needing repair. It is currently leaking oil and needs a replacement gear box. It has become increasingly expensive to maintain, with some £30,000 being incurred on repair costs since 1997 and some £16,000 being incurred on hire costs during 2001/02 because of breakdowns. Renewal and Repairs fund 3.2 Due to the age and condition of the current Lord Mayor’s car and as a prudent accounting approach, a Renewal and Repairs fund was established some years ago for the specific purpose of funding a replacement vehicle at some stage. The fund has grown to £90,000 (including accrued interest). Suggested replacement for WE1 3.3 Officers have been in discussion with a dealership about the possible purchase of a second hand Rolls Royce Park Ward. The vehicle in question was for sale at £139,950, including Value Added Tax (VAT). It was evident that the dealership wished to do business with the City Council and felt that a beneficial deal could be struck. The dealership has now submitted a formal quotation showing a capital purchase price of £90,260, excluding VAT. The Council is in the position of being able to recover VAT on this vehicle. 3.4 The vehicle has, to date, been owned only by the original manufacturer and has low mileage. 3.5 If the City Council were to purchase the second hand Rolls Royce, the manufacturer will issue a new three-year warranty that will run from the date of purchase. This will be a one-off revenue cost of £6,000. This will ensure trouble free motoring for the period of the warranty and, given the age and excellent condition of the vehicle, reliable transport for the Lord Mayor for many years to come. Value for money 3.5 The Managing Director of ACIT Services Ltd (the City Council’s internal auditors) has confirmed that:  the price referred to in paragraph 3.3 does reflect the trade in value of the current Daimler and that, in his view, the purchase of this vehicle at the price quoted does represent not only excellent value, but based on the extensive research which has occurred over the last few months, will not be bettered.



the vehicle would not only be an excellent replacement for the existing car, but would potentially provide the Council with appropriate and reliable transport for the Lord Mayor for many years to come. Financial implications

4.

4.1 The total cost for the replacement car is as follows: Capital Cost: Used Rolls Royce – one off purchase cost £90,260 4.2 Funding is available to meet the above replacement cost. The capital cost for the second hand Rolls Royce will be met from the Renewal and Repairs fund. 4.3 As referred to above, the current Daimler car has been expensive to maintain with some £30,000 being incurred on repair costs since 1997 and some £16,000 being incurred on hire costs during 2001/02 because of breakdowns. Consequently, such repair costs should be avoided or reduced in the early years of the life of the replacement Rolls Royce. 4.4 Early financial benefits would arise from the decision to replace the existing vehicle. These benefits of up to £30,000 per annum could be made available for inclusion within budget options. 4.5 Given immediate acquisition and disposal, financial benefits can be seen to arise as early as this financial year. The payback period is less than five years on the replacement cost of approximately £90,000. 4.6 There is also the potential for foregone costs during the warranty period as the majority of the necessary repair costs will be met by the warrantee provider. 4.7 The cost might be reduced further by an estimated £5,000 by the sale of a wheel chair adapted Volkswagen Sharan that was donated for use by the Mayoralty some five years ago and that has reached the end of its useful operational life. 4.8 Without the purchase of the car proposed, it would be necessary for a growth bid to cover the ongoing and increasingly expensive repairs to the current Daimler and the requirement to hire in a temporary replacement while it was off the road. 4.9 The table set out in the appendix indicates the net revenue benefits, should the decision to replace proceed. These benefits will contribute to the overall savings target in the Lord Mayor's budget as part of this year's star chamber process which is seeking revenue savings across Council departments. 5. Legal implications

5.1 There are no legal implications resulting from this report.

6.

Staffing implications

6.1 There are no staffing implications resulting from this report. 7. Ward Member consultation

7.1 There are no Ward Member implications resulting from this report. 8. Reasons for decision

8.1 A replacement vehicle is needed for the Lord Mayor as the current car is now old (first registered in 1987) and has been off the road on many occasions in the last few years needing repair and those repairs have become increasingly expensive. It has been confirmed that, based on the extensive research that has occurred over the last few months, the deal being offered will not be bettered and offers excellent value for money.

If you have any queries about this report or wish to inspect any of the background papers, please contact Lawrie Smith on 020 7641 2015; email lsmith@westminster.gov.uk Background Papers
The documents used or referred to in compiling the report were:  Note to the Lord Mayor’s Private Secretary dated 4 October 2002 from the Managing Director of ACIT Services Ltd ………………………………………………………………………………………………….

For completion by Cabinet Member
 Declaration of interest

I have no interest to declare in respect of this report ………………………………………… Signed ………………………….. Date I have to declare an interest State nature of interest ………………………………………………………………………………………………… ………………………………………….Signed ……………………………Date

(NB: If you have an interest you should seek advice as to whether it is appropriate to make a decision in relation to this matter.) For the reasons set out above, I agree the recommendations in the report and reject any alternative options that are referred to but not recommended.

Signed ………………………………………………………….. Cabinet Member for …………………………………………... Date ………………………………………. NOTE: If you do not wish to approve the recommendation, or wish to make an alternative decision, it is important that you consult the report author, the Director of Legal and Administrative Services, the Director of Finance and, if there are staffing implications, the Head of Personnel (or their representatives) so that (1) you can be made aware of any further relevant considerations that you should take into account before making the decision and (2) your reasons for the decision can be properly identified and recorded, as required by law. Note to Cabinet Member: The decision will now be published and copied to the Members of the relevant Overview & Scrutiny Committee and may not be implemented until five working days have elapsed from publication.

APPENDIX

The table below indicates the net revenue benefits should the decision to replace proceed. ANNUAL HIRE AND REPAIR COSTS AVOIDED
2002/03 £ 2003/04 £ 2004/05 £ 2005/06 £ 2006/07 £ TOTAL

Cost of 3 year Warranty Unbudgeted Hire Costs to be avoided Estimated Repair costs avoided / reduced Net Benefit (Revenue) Cumulative Net Benefit (Revenue)

+6,000 -8,000 -2,500

-17,600 -5,500

-19,360 -6,050

-21,300 -2,500

-23,400 -2,750

+6,000 -89,660 -19,300

-4,500 -4,500

-23,100 -27,600

-25,410 -53,010

-23,800 -76,810

-26,150 -102,960

-102,960


				
DOCUMENT INFO
Shared By:
Tags: City-, of-We
Stats:
views:25
posted:11/27/2009
language:English
pages:6
Description: City-of-Westminster