Decision Details

1. Approved the purchase of vehicles at the end of the sublease agreement for the total sum of £515,303 and for this to be funded from an existing budget in the Council’s 2024/25 capital programme. 

2. Approved a supplementary revenue budget of £31,184 to fund the uplift in the management fee to ESSL for short-term leases arrangements required in Quarter 4 of 2024/25, and for this to be funded from the Transformation Reserve.

Vehicles on legacy lease

 
East Suffolk Services Ltd (ESSL) currently lease 56 Light Fleet vehicles (including a number of specialised vehicles) and 7 HGVs from Norse via a leasing company. This operating agreement is a legacy from the handover of the contract and was essential to ensure continuity of service. The lease agreement is between East Suffolk Services Ltd and Norse Commercial Services and is in the form of a sublease. All these leases between Norse and the leasing company – and therefore the sublease between ESSL and Norse - expire on the 31st December 2024 and cannot be renewed; therefore, the vehicles will no longer be available for ESSL’s use. 

Some of the vehicles originally on lease from Norse were identified as in a poor state and were returned early. Hire vehicles are currently in use to ensure continuity of service, however this is expensive compared to a lease or purchase.

 ESSL are working with ESC to bring forward a fleet renewal strategy – and a further paper will come to Full Council in January 2025 setting out plans for future procurements.

 With regard to the vehicles covered by the sublease - to ensure continuity of service, alternative arrangements need to be in place from the 1st January 2025.

 This report is seeking approval for the Council to acquire some of the vehicles covered by the sublease, and to be funded from the Council’s capital programme in 2024/25. The vehicles will then be leased back to ESSL. In addition, it seeks a supplementary revenue budget to fund an uplift in the ESSL management fee in Quarter 4 of 2024/25. This is to fund short-term lease arrangements by ESSL to address a shortfall in fleet requirements.