82419 BCC RAC Book

SECTION 1
Business Travel:
Choice or Necessity?
A report from the RAC Foundation and
the British Chambers of Commerce
November 2007
1
CONTENTS
Contents
Business travel during the course of the business day has significant financial, safety and environmental
implications for Small and Medium Enterprises (SMEs). Business is demanding more extensive workrelated travel and congestion is having a severe impact on business operations.
This report has been produced jointly by the Royal Automobile Club Foundation and the British
Chambers of Commerce. The report can be read alongside the Royal Automobile Club Foundation’s
Motoring Towards 2050 series and the British Chambers of Commerce’s Annual Transportation
Surveys.
Business Travel: Choice or Necessity?
Steering Committee
David Frost Director General, British Chambers of Commerce
David Holmes Chairman, RAC Foundation
Elizabeth Dainton Research Development Manager, RAC Foundation
Gareth Elliott Policy Advisor, British Chambers of Commerce
Edmund King Executive Director, RAC Foundation
David Leibling Transport consultant
Sally Low Director of Policy and External Affairs, British Chambers of Commerce
Thanks also go to Foundation Staff Sheila Rainger, Jo Abbott and Fiona Coyne
The Royal Automobile Club Foundation and the British Chambers of Commerce would like to thank the
following people who sent submissions or offered advice to the Steering Committee. We stress the
opinions and conclusions outlined in the report are those of the Steering Committee and not necessarily
those of the people or organisations listed.
Bob Bissell BT Business
Caroline Black Caroline Black & Associates
Helen Bolton Ceuta Healthcare
Andrea Davies Norwich Union and RAC plc
John Dodgson NERA Economic Consulting
Dwight Doyle WorkWiseUK
Peter Dunkley Depoconsulting
Phil Flaxton WorkWiseUK
Howard Kirby Napier University
Rose McArthur Association of Commuter Transport
Marie Morice National Business Travel Network
Michael Parish RoadSafe
Paul Tilstone Institute of Travel Management
Adrian Walsh RoadSafe
Mike Waters Arval Ltd
Foreword
Executive Summary
Section 1 Introduction
Section 2 SMEs: Business Travel Today
2.1 Distance, travel time and reason for travel
2.2 Mode of travel
2.3 Reducing business travel
2.4 The future of business travel
5
6
11
15
16
18
22
26
Section 3 The Business Environment: Today, Tomorrow And Beyond
3.1 Distance, travel time and the reason for business travel
3.2 Mode of travel
3.2.1 Car
3.2.2 Vans
3.2.3 Rail
3.2.4 Aviation
3.2.5 Other modes of transport
3.3 The business traveller profile
31
33
36
36
41
43
43
44
45
Section 4 The Way Forward
4.1 Business travel impacts should be considered at an
early stage in business decisions
4.2 Determining whether business travel is required
4.3 Planning for more sustainable business travel
4.3.1 Using modes other than the private car
4.3.2 Changing the face of business travel
with technology
4.4 The role of government policy
4.4.1 Company car tax
47
54
58
58
Section 5 Conclusions And Recommendations
5.1 Recommendations for future research
61
65
Section 6 References
67
Max Wide BT Business
Jacqui Wilkinson Department for Transport
Thanks also to the Greater Manchester Chamber of Commerce and to the Chamber of
Commerce Herefordshire and Worcestershire who held focus group sessions on this issue.
2
48
49
51
51
3
Foreword
Figure 1: Percentage Of Workforce Taking Part In Business Travel
16
Figure 2: Business Travel Type
17
Figure 3: Distance Travelled By The Workforce
17
Figure 4: Percentage Of Company Budget Spent On Business Travel
18
Figure 5: Business Travel And Mode
18
Figure 6: Important Considerations For Business Travel Mode Choice
19
Figure 7: Barriers To Public Transport Use
20
Figure 8: Initiatives Adopted By Businesses
23
Figure 9: Initiative Potential For Reducing Business Travel By Car
23
Figure 10: Barriers To Reducing Business Travel
24
Figure 11: Net Likelihood Of Future Scenarios
27
Figure 12: Long Distance Business Travel
34
Figure 13: Business Travel Throughout The Day
35
Figure 14: Business Trips By Region
35
Figure 15: Mode Of Transport For Business Travel And Commuting
36
Figure 16: Percentage Of Company Car Stock Treated As Benefit In Kind
37
Figure 17: Company Cars Licensed As A Percentage Of The Vehicle Stock
38
Figure 18: Company’s Mobile Choices
52
Table 1:
Annual Mileage By Type Of Car And Trip Purpose: 2006
39
Table 2:
Environmental Pros And Cons Of Company And Private
Car Use During The Course Of Business
40
Table 3:
Vehicle Miles By Reason For Use
42
Table 4:
Types Of Products Carried By Van
43
Table 5:
Impact Of ICT On Business Travel
56
Table 6:
Considerations When Using ICT
57
This study focuses on travel during the course of the business day, rather than
commuting and finds business travel to be a necessary activity. Almost 70% of business
travel is made by car. This in turn creates problems for the business community as 86%
of businesses find themselves adversely affected by chronic congestion.
It is wrong to suggest that we can do without travel as the face-to-face meeting is still
the most effective way of conducting business. However, it is also wrong to suggest that
the business community cannot eliminate some journeys. In fact, this can often make
business sense by saving companies thousands of pounds in travel costs whilst also
raising productivity.
Whilst researching this study we have encountered many businesses that have been
doing just that. With the advent of broadband telecommunications many firms indicated
that they have used instant messaging and teleconferencing in order to reduce travel.
Other firms had developed new company wide policies to introduce more flexible
working. With rising levels of congestion small firms are often the first to realise the
negative cost implications and take action.
However, it was also clear from the business surveys that the alternatives to the car are
often not suitable for the business traveller. There was a strong view among respondents
that buses can never truly compete with cars. The lack of real time information and
business facilities together with the lack of available routes means that public transport
is often not even considered. If this is to be changed the business community and the
public transport industry must work together to promote increased usage.
This report also highlights the positive steps that are being taken by the business
community to reduce business travel and its consequent carbon emissions. Where it is
not possible to eliminate such travel, businesses have moved towards “greener”
vehicles or have utilised other forms of transport such as the train. There is still more that
can be done and through leadership and partnership the business community will
continue to reduce its impact on congestion and the environment.
National and local government also have an important role to play as road and rail
infrastructure improvements are needed to ensure that essential business travel, the
economy and environment are not further hindered by congestion.
David Frost
Director General
British Chambers of Commerce
4
FOREWORD
FIGURES AND TABLES
Figures and Tables
Edmund King
Executive Director
Royal Automobile Club Foundation
5
Congestion is getting worse. Company car drivers waste a total of eleven days a
year stuck in traffic (Royal Automobile Club Foundation, 2007a) which not only
increases business costs, but also has an impact on productivity, the safety of
employees and pollution levels. The situation is now so bad that 86% of
businesses feel that road congestion affects their business locally, regionally and
nationally (British Chambers of Commerce, 2007). Congestion is costing business
£18 billion a year (BCC, 2007a) and the Royal Automobile Club Foundation and
the British Chambers of Commerce (BCC) are urging government to do more to
tackle congestion whilst recognising that business should, in its own interest, look
at ways to cut down on travel, without impairing profitability.
Our report finds that whilst business travel is a necessity it is important to get the
balance right. The service sector is particularly dependent on travelling to ‘get the
job done’ and the ‘briefcase’ traveller can find it difficult and counter-productive to
replace physical face-to-face meetings and networking. Despite the difficulties,
Small and Medium Enterprises (SMEs) are displaying leadership by finding
innovative ways of tackling unnecessary business travel. They have made
significant inroads by using IT systems and reducing their dependence on the car
and are reaping the environmental, economic and safety benefits. More can be
done if business, central and local government work together. Seventy percent of
SMEs describe public transport as ‘not fit for purpose’ and the lack of support from
national and local government is holding SMEs back from delivering even more
sustainable business travel.
Business travellers are travelling further than ever before. The average business
traveller will travel one and a half times around the globe during the course of their
working life and 69% of this travel will be completed by car (DfT, 2007a). Business
travellers have the highest household incomes and car ownership rates. Threequarters state that they enjoy travelling for business (Barclaycard Business, 2006).
SMEs, who make up 99% of all UK businesses and account for half of all employment
(Enterprise Directorate, 2006), have different travel requirements from larger corporates
since they tend to rely on a greater proportion of meetings with clients. Ninety-four per
cent of SMEs make use of the road for their business travel and 82% describe the car
as central to their business operations (British Chambers of Commerce, 2006). Rail
use has also increased over the past five years, mainly due to increased congestion
on the road network and almost half (45%) of SMEs are spending more than 10% of
their annual budget on business travel.
6
Over half of all SMEs have taken active steps to reduce their company’s travel, with
technology rather than automobile solutions having the greatest impact. Telephone
conferencing has been adopted by almost 50% of all companies and 30% have
made use of very new technologies such as instant messaging and Voice over
Internet Protocol (VoIP).
Although reductions have been made, the importance placed on face-to-face
meetings for building trust and developing new contracts means that travelling for
business will remain important. Business travel is crucial to successful business
operations and if aggressive restrictions were introduced they would have severe
consequences for the competitiveness of the UK economy.
When business travel has been necessary, one in five businesses have taken
active steps to use public transport, but with 70% of SMEs considering public
transport ‘not fit for purpose’ the car looks certain to remain the dominant means
for years to come. Reliability and travel time are the main considerations when
deciding on the mode of transport to take. The route origin, destination, travel time
and service reliability have been described as the main barriers to public transport
use.
If public transport is to play a greater role in reducing the financial, social and
environmental cost of business travel more needs to be done to improve its image.
London’s public transport system is a special case, which cannot simply be
transferred to other parts of the country. If public transport is to be successful in
business terms the frequency and reliability of services must be improved and
popular business routes need to be supported by targeted information.
Businesses are currently unsure whether public transport will ever meet their
needs, which provides public transport operators with a significant challenge.
The majority of SMEs believe that an increase in overseas travel is likely. The future
of business travel for individual organisations will very much depend on their
location, structure, industry and market. Collaboration requirements, transport
infrastructure, technology options and information availability will also have a
significant impact on future travel. Businesses need to have travel plans in place,
supported by senior management, but time and cost implications often hold SMEs
back from developing this approach. Leadership from the top is essential for any
SME which is aiming to change the way it conducts its business travel. No SME
will make changes without considering the impact they are likely to have on
7
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Executive summary
Our key report findings are:
n Business travel is necessary;
n SMEs are leading the way;
n Public transport, on the whole, ‘is not fit for purpose’;
n Cars will remain the dominant means for business travel;
n Company policies and senior management buy-in are essential;
n IT has an important role to play; and
n National and local government support is needed.
Business travel is necessary
A degree of business travel is required within any business. The trades and delivery
firms may find it difficult to make reductions in their travel, but they can adopt ecodriving, opt for a more fuel-efficient vehicle or make changes to scheduling to
reduce their impact on the environment. The service and professional sectors have
the greatest scope for change, but doing business always has, and always will,
depend on face-to-face communication. Business travel can be reduced but
much of it is necessary and both central and local government should recognise
and plan for this fact.
Business travel is not spiraling out of control and businesses that are committed to
travelling for work are open to change. Operations have been ‘greened’ in many
cases, but many are unsure about what the future holds. Government guidance
and support is needed to convince SMEs that the changes required are part of a
long-term strategy.
Public transport, on the whole, ‘is not fit for purpose’
Seventy percent of the business community does not believe public transport is fit
for business travel. Reliability and journey times are central to the travelling decision
and public transport needs to compete on these grounds if it is to win over
business travellers. Businesses currently hold a negative view of public transport
and the bus network in particular should seek to better meet the needs of the
business community. The rail network is well supported by business, although
significant improvements are needed to both the ticketing and the end-to-end
travel experience if more business travellers are to be persuaded to leave their cars
at home.
Cars will remain the dominant mode for business travel
Cars have an important and unique role to play. They are flexible and convenient,
and provide an unrivalled level of door-to-door service. Legislation changes and
company policies have had an impact on the level of car use, but anti-car policies
would be damaging to our economic prosperity. Only businesses can decide what
their transport needs are and how they can best be met.
Company policies and senior management buy-in are essential
Company policies for business travel and senior management buy-in are a
necessary pre-requisite for achieving changes to business travel. When
companies do not change the way they are conducting their travel it is mainly
because the organisation has other priorities which leaves staff with little support.
To secure buy-in ‘from the top’ the impact that changes might have on customer
relations and profit need to be discussed. This can be achieved through the
business travel planning process, but this can act as a barrier to change because
many businesses are skeptical about it. SMEs should be encouraged to engage
with business travel planning, but high-level commitment is needed first.
SMEs are demonstrating leadership
Many SMEs are already ‘walking the walk’ when it comes to reducing unnecessary
business travel. They have the ability and the power to innovate but need
government support and improved public transport services to take their
commitment to the next level. SMEs have the will to change and national
government is encouraged to give them the breathing space, support and advice
to plan for considered business travel. Better partnership and co-operation are
needed.
8
Information Technology has an important role to play
Information technology (IT) schemes provide the most scope for SMEs to change
their business travel habits. SMEs are already engaged with the low cost systems
(e.g. email, SKYPE and MSN messaging) and overall IT has been more readily
adopted than automobile solutions (e.g. car pooling and car sharing) to reduce
travel. There is a willingness to make further use of new systems and therefore IT
is likely to be a significant growth area in the future.
9
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
customer relations and profit, but increasingly business decisions will be driven by
Corporate and Social Responsibility (CSR) concerns, duty of care responsibilities
as well as financial considerations.
SECTION 1 – INTRODUCTION
SECTION 1
EXECUTIVE SUMMARY
National and local government support is needed
National and local government support is needed to encourage and provide advice
to SMEs looking at the issue of business travel. National government should seek
to provide the framework for SMEs to obtain both financial and consultancy
support in this area. Local government should work closer with businesses and
transport providers to secure local solutions to local problems by using travel plans
or other means. Nationally restrictive policies should not come ahead of local
solutions as SMEs have the will to act and should be allowed to find ways to meet
their environmental obligations, without the policies having an impact on their
business profitability.
Action is needed from all those involved in or associated with business travel.
Individuals, businesses, public transport operators and government all have an
important role to play.
Our recommendations for action are as follows:
n Individuals should consider whether their journey is necessary, consult
company policies and use eco-driving methods to reduce the environmental
and safety impacts of their journey.
n Businesses should develop business travel policies with the local authority
and public transport providers. Senior management should consider incentives
for staff to reduce their travel and use non-car modes where possible (including
walking, cycling and motorcycling).
n Rail transport operators should work with other transport providers to
develop a competitive door-to-door service, which takes account of business
traveller preferences.
n Bus operators should work with businesses to develop appropriate services
that would help improve the negative ‘bus image’.
n Local government should take the needs of business into account and
recognise the important role that the car plays. If local government wants
business to make more use of public transport, it should improve information
on and the availability of non-car modes for business travel, whilst ensuring that
the business travel plan process is inclusive of SMEs.
n National government should include SMEs in local planning processes to
ensure that business at local and regional level is able to thrive whilst efficiently
addressing environmental demands.
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SECTION 1
SECTION 1
SECTION 1
Introduction
Business travel forms an integral part of doing business, but road congestion and
the act of travelling itself is leading to significant financial, safety and environmental
costs to business and wider society. The average business traveller will travel one
and a half times around the globe during the course of their working life (RAC
Foundation, 2007b) and 69% of this travel will be completed by car; but is all this
travel necessary?
Business travel encompasses a whole range of activities from visiting customers,
making service calls and holding internal meetings to taking part in educational
events. This report recognises the diverse nature of business travel, but primarily
focuses on the UK ‘briefcase’ traveller, who has the potential to make the most
significant travel savings. The increased presence of the ‘white van man’ on UK
roads is highlighted throughout and solutions are put forward for this type of travel,
although it is not the focus of the report. Reference is also made to how business
travel connects with the commute. International business travel is beyond the
scope of this report.
The remainder of the report draws on both new and existing research to discuss
the business travel environment of today, tomorrow and beyond:
n Section 2: Reveals the findings of the British Chambers of Commerce and
Royal Automobile Club Foundation commissioned research.
n Section 3: Provides an overall description of business travel today and
emerging trends.
n Section 4: Is based on new and existing research and discusses ways in
which business travel can be made more sustainable.
n Section 5: Concludes the report, provides policy recommendations and areas
for future research.
The objectives of the study were five fold, and aimed to establish:
1. The role and importance of business travel.
2. The future business environment and its likely impact on business travel.
3. The perceived and actual business travel costs (financial, safety and
environmental).
4. Action which has been taken to reduce business travel by private car and
whether businesses can realistically reduce travel further.
5. A framework for implementing more sustainable SME business travel.
Various research methods have been used. They included:
An online questionnaire of British Chambers of Commerce members (409
responses);
n Two British Chambers of Commerce focus groups: the Chamber of Commerce
Herefordshire and Worcestershire and the Greater Manchester Chamber of
Commerce; and
n An expert panel discussion. The panel comprised academics, business
leaders, government officials and representatives of NGOs.
n
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13
14
15
SECTION 2 – SMEs: BUSINESS TRAVEL TODAY
SECTION 1
SECTION 2
100
80
60
40
20
0
81-100%
61-80%
41-60%
Meeting with
business peers
Conference/
education
Meeting with
clients
Company-wide
meetings
21-40%
11-20%
0-10%
Distance, travel time and reason for travel
All businesses questioned participated in a degree of business travel. Just over
30% of the businesses questioned had 81-100% of their employees travelling for
business, whereas 20% had only 0-10% of their workforce travelling for business.
Same day travel within the UK was the most common form of business travel (See:
Figure 1).
Figure 1: Percentage of workforce taking part in business travel
% of workforce
100
80
60
40
20
0
81-100%
61-80%
41-60%
21-40%
Travelling for
business
Business
travel
involving same
day travel
Business
travel within
the UK
11-20%
0-10%
Type of meeting
Source: BCC and RAC Foundation (2007)
Figure 3: Distance travelled by business by workforce
Percentage of repondents (%)
2.1
Figure 2: Business travel type
Percentage of respondents (%)
Travelling is an important part of all business operations and SMEs are no
exception. Research conducted with the British Chambers of Commerce
membership and experts interested in the area show this to be the case. When the
results which follow are compared with national findings there is significant overlap
which provides confidence that the results are representative of SME experience
and opinion.
Percentage (%)
SECTION 2
SECTION 1
Section 2 SMEs:
Business travel today
100
90
80
70
60
50
40
30
20
10
0
81-100%
61-80%
41-60%
21-40%
11-20%
0-10%
Short
distance
(Under
20 miles)
Medium
distance
(Under
21-75 miles)
Long
distance
(76-200
miles)
Very long
distance
(200 plus)
Distance (miles)
Type of business travel
Source: BCC and RAC Foundation (2007)
Source: BCC and RAC Foundation (2007)
Meetings with clients followed by company wide meetings form the majority of
business travel completed and most businesses are more frequently engaged in
journeys of less than 20 miles than in longer ones (See: Figures 2 and 3).
16
The majority of businesses (55%) spend between 0-10% of their annual budget on
business travel. A further 33% spend between 11-20% of their total budget on
business travel. This illustrates that business travel is a significant business cost
(See: Figure 4).
17
1%
SECTION 1
2%
% of budget
0%
9%
0-10%
11-20%
21-40%
33%
41-60%
55%
Reliability and journey time are the main considerations for businesses when
deciding what mode of transport to use (See: Figure 6).
81-100%
Figure 6: Important considerations for business travel mode choice
100
2.2
Mode of travel
Ninety-four per cent of all SME businesses make use of the road for their business
travel and 82% describe the car as essential for their business operations (BCC,
2006). The road network is under increasing pressure and 86% of businesses feel
there is a problem with road congestion (BCC, 2007a).
Net agreement (%)
Source: BCC and RAC Foundation (2007)
80
60
40
20
0
Privacy
Equipment carried
Figure 5: Business travel and mode
Comfort
Cost of travel
Safety
Ease of travel
Travel time
The car was found to be the main mode of transport used for business travel
regardless of business travel purpose. Cars are more likely to be used for meetings
with clients and customers than for company wide meetings.
Reliability
-20
Source: BCC and RAC Foundation (2007)
400
350
300
250
200
150
100
50
0
Company wide meetings
Mode
Source: BCC and RAC Foundation (2007)
18
Other
Walk
Rail/Underground
Bus
Car Passenger
Meetings with
clients/customers
Air
Frequency
Factor
Conferences/
Education
Meetings with business
peers/other companies
Twenty-one percent of SMEs have taken active steps to use public transport
instead of the car. This has been achieved through implementing a company
policy to use public transport (58%) and through reducing company cars or
company car mileage (28%). Almost 70% feel that public transport ‘is not fit
for purpose’ and when asked about the barriers preventing public transport
use, time taken to reach the destination, route origins and destinations and
service reliability were identified as the key limiting factors (See: Figure 7).
Businesses that have a large numbers of employees travelling for business are
more likely to be supportive of public transport, although their views still remain
negative. Businesses make less effort to use public transport as the number of
19
SECTION 2
Ninety-one per cent of businesses make use of the rail network for their business travel
and the extent of use increases with business size (BCC, 2006). Business use of rail
has increased over the past five years due to increased congestion on the road
network (BCC, 2006). Rail is the second most used form of transport for business
travel, primarily used for meetings with clients and customers and least used for
company meetings. 87% of UK businesses make use of air transport for business
travel and six in ten businesses rely on it (BCC, 2006).
61-80%
Car Driver
SECTION 2
Figure 4: Percentage of company budget spent on business travel
SECTION 2
SECTION 2
Figure 7: Barriers to public transport use
disliked comparisons to London and they considered London to be a ‘special
case’, with its own unique culture and service availability. If other urban areas are
to deliver the same type of cultural shift as London, significant investment in the
network will be required to shift negative opinions towards bus provision.
Time taken to reach destination
Reliabilty
It was clear that all groups felt bus frequency and reliability need to be improved
and well communicated to the business community. The rural chamber highlighted
that buses are infrequently used for business journeys because travellers are often
unfamiliar with the local area and hence find it difficult to negotiate start and end
points on public transport. Clearer information and better signage is essential and
better partnerships between local government, business and public transport
operators are required.
Barrier
Timing of departures/arrivals
Comfort/Cleanliness
Image of public transport
Information about services
0
10
20
30
40
50
60
70
Percentage of business (%)
Source: BCC and RAC Foundation (2007)
Emerging business parks are also poorly served by bus. In future, businesscentered options should be developed from the outset with both commuting and
business travel in mind. Improvements to the bus network and its linkages with
other systems (e.g. rail network) are undoubtedly required but both Chamber
groups were doubtful that buses could ever meet their travel needs. The Tube, or
tram (e.g. Metro Manchester), was considered to be the most suitable option for
days travelled per month increases, but public transport becomes more appealing
as journeys increase in duration.
RoadSafe: Driving for better business programme
The reliability of public transport remained important regardless of the duration of
the journey, whilst travel time and cost becomes increasingly important as travel
time increases.
When business travel mode decisions were discussed with both the rural
(Chamber of Commerce Herefordshire and Worcestershire) and urban (Greater
Manchester Chamber of Commerce) focus groups as well as the expert panel, all
agreed that car ownership (especially in rural areas) and the flexibility and ease of
travel provided by the car was a barrier to public transport use. The rural chamber
in particular could not envisage people moving away from car use due to its
convenience and the urban focus group concurred that it would be very hard to
move away from car use unless congestion reached an intolerable level.
An anti-bus sentiment was evident in both rural and urban areas, although it was
more noticeable in the rural area where there was a poorer public transport
network. The negative opinion of buses went beyond image and comfort and
businesses were unconvinced by the product on offer. Focus group members
20
Compared to other work environments, almost three times as many employees
die or are seriously injured while driving on company business.
It is estimated that between 25% and 33% of road traffic accidents involve
somebody who was using the road for work purposes. This means that in Great
Britain between 850 and 1,100 people are killed, and 90,000 to 118,000 are
seriously injured, in work-related road accidents each year. In other words,
between one-quarter and one-third of all road accidents involve someone who
was working.
The RoadSafe ‘Driving for better business programme’ aims to highlight to senior
management that “managing” driving for work can have significant business
rewards. Firms with a safety management culture have been found to be happier
with better quality employees, but senior management buy-in and an
understanding of corporate manslaughter legislation is essential for making
progress in this area.
(Source: www.roadsafe.com/programmes/work)
21
SECTION 2
SECTION 2
During discussions it was clear that car pools or the use of car clubs during the
working day may encourage more sustainable commuting, and good commuting
alternatives are likely to lead to less car based business travel. Workplace car
parking should not be discouraged since there maybe ‘spill-over’ impacts for the
surrounding area, which could lead to car park space hunting and increased traffic
in town centres. Ideas for linking the commute and business travel were thought to
be good in principal, but they do not always work out in reality as the existence of
a car share or car pool scheme may discourage public transport use throughout
the day. How SMEs influence and take part in these types of initiatives obviously
needs further consideration based on their scale, time and money restraints.
Car-sharing
Changes to company
car policy
Car-pooling
Telephone Conferencing
Instant messaging
and VOIP
Video Conferencing
Online collaboration sites
0
10
20
30
40
50
60
Percentage (%)
Source: BCC and RAC Foundation (2007)
Figure 9: Initiative potential to reduce business travel by car
Telephone conferencing
Video conferencing
Company car policy
Local congestion charging
Initiative
The role the journey to work plays in business travel decisions throughout the
working day was also highlighted and there are some SMEs doing good work in
this area. If people have to drive into work in the morning they are more likely to use
the car throughout the day or alternatively, if they required the car during the day,
they would be inclined to use it to get to work regardless of whether other options
were available. Commuting and business travel are inextricably linked and policy
developments should reflect this.
Travel reduction solution
All groups were surprised that cost featured so low down in the transport decisionmaking process, but they did highlight that the value of holding or attending a
meeting often justified the cost. All groups recognised the important role that
safety plays in deciding how best to travel during the course of business. The
urban Chamber emphasised that no employee would be encouraged to travel
three hours by car to and from an all day meeting, due to the impact it would have
on his or her concentration and safety on the road. In these circumstances an
overnight stay or travel by train, no matter what the cost would be wholly justified.
Automotive
Figure 8: Initiatives adopted by businesses
Technology
businesses; few could envisage buses ever meeting such frequency and
punctuality standards.
National road pricing
Business encouraging
use of public transport
Business travel plans
Online collaboration
2.3
Reducing business travel
Personal carbon allowances
Over half (57%) of businesses have taken active steps to reduce their business
travel. Telephone conferencing has been adopted by almost 50% of companies
and almost 30% of companies have made use of instant messaging (such as
email, MSN, SKYPE, Yahoo and AOL). Technology options have been adopted
more readily than automotive solutions (See: Figure 8) and were thought to have a
greater impact on reducing travel by the private car (See: Figure 9).
22
-20
-15
-10
-5
0
5
10
15
Net Significance (%)
Source: BCC and RAC Foundation (2007)
23
20
25
30
SECTION 2
SECTION 2
If the initiatives in Figure 9 were not used this was often because the business had
other priorities. The prioritisation of the issue by senior management was also a
barrier to uptake. The greatest barrier to a business reducing its business travel
was its perceived impact on customer relations, followed by the impact it was
judged to have on profit (See: Figure 10).
Percentage (%)
Figure 10: Barriers to reducing business travel
70
60
50
40
30
20
10
0
Business travel was considered to be ‘one of the main drivers of economic growth’
bringing regeneration to areas and therefore businesses felt that any future policies
dealing with congestion and business travel should not penalise them for bringing
growth and employment to declining areas.
The rural focus group was the most positive about the contribution IT could make
to reduce travel. IT was considered a very useful communication tool for internal
meetings but is open to greater problems and scrutiny if used to converse with
external clients. Examples were provided of where telephone conferencing had
been introduced for cost, simplicity and environmental reasons, but ultimately it
was agreed that the communication type to be used should depend on customer
needs and requirements.
Firms look to cut work-related travel
Impact on
customer
relations
Impact on
profit
Lack of
Cost of
Lack of
Impact on
support
installing understanding
staff
from
technology
of new
morale
government systems
technology
Barrier
Source: BCC and RAC Foundation (2007)
Businesses which have under 50% of their employees travelling for business were
the most likely to take active steps to reduce their business travel and as the
number of days employees travel per month increased the less likely it was that
employers would take steps to reduce business travel. Businesses with
employees travelling under 10 days a month were most likely to take steps to make
the change. It is also more likely that steps would be taken to reduce business
travel when average journey times increased or if more than 10% of the annual
business budget is allocated to business travel expenses.
Both rural and urban focus groups confirmed that business travel is crucial to their
operations. Some potential to reduce business travel was recognised but it was
not considered possible to eliminate it altogether as face-to-face meetings will
always be needed to build trust. The importance of keeping the UK competitive
and the role of business travel within this overall aim were also raised. The urban
group, which currently experiences most congestion problems, emphasised that
businesses are driven by market forces and travel is not undertaken unnecessarily.
24
by Mike Roberts
The majority of fleets are doing their bit to reduce work-related travel by allowing
staff to work from home. More than three-quarters of fleets questioned in a
survey believe that working from home is reducing work-related travel, up from
34% a year ago. But the study by GE Fleet services found that the growing trend
is having no impact on the increasing popularity of the company car…the number
of companies offering cars to essential users is now almost 100%...GE Fleet
Services managing Director Rich Green said ”The traditional company car is
making a genuine comeback and remains the undisputed number one form of
work-related travel.”
Source: Fleet news, 15th February 2007, p.2
Staff frustrated by non-green bosses
“Almost nine out of ten workers think their employer is not doing as much as they
could to limit its environmental impact, according to a survey of 500 Londoners.
The report from car club company Zipcar uncovered a gulf between employer
and employee attitudes to the environment…Only one third of London
companies were found to have invested in large-scale environmental initiatives,
such as procuring energy efficient office equipment or implementing car clubs for
staff.”
Source: www.businessgreen.com 23rd August, 2007
25
SECTION 2
SECTION 2
All groups and panels considered devolved budgets and bonus schemes linked
with business travel to be the most effective way of reducing overall travel. The
positive and negative potential for company cars to reduce business travel was
also recognised, especially since company cars are beginning to come back into
favour after the initial dip following the car tax reforms in 2002. Some policies were
thought to encourage travel whereas others could be quite effective in reducing
travel.
For example, an employee of low to middle seniority may be encouraged to travel
unnecessarily if 15,000 miles of travel per annum are required to qualify for a
company car whereas people who have opted out of a company car scheme by
making use of a car allowance may drive less to reduce mileage on their own
vehicles. Alternatively some of those driving their own vehicles during the course of
work may think of mileage payments (approximately 40p per mile) as additional pay
if they do not fully consider the overall cost of running a vehicle and may drive
unnecessarily as a result. This issue is discussed further in Section 3.2.1.
2.4
The future of business travel
The future of business travel is difficult to define. When asked what would happen
to business travel over the next five years 26% of businesses said it would reduce,
38% thought it would increase and 36% thought it would stay the same. Looking
forward to 2015, the same level of uncertainty is evident. Twenty percent of
businesses think travel will reduce, 27% thought it would increase and 54% think
that it will be about the same as today. When thinking about the most likely future
scenario, businesses could see a world where increased overseas travel was more
likely than virtual travel substitution (See: Figure 11).
Businesses that are currently making longer business journeys were more likely to
think that their future business travel will increase and the businesses that are
26
Figure 11: Net likelihood of future scenarios
40
30
20
10
Net likelihood (%)
The expert panel acknowledged that IT has come a long way, especially with
the development of broadband, but they questioned its application for reducing
road traffic levels and how it can be used for this purpose by SMEs. New
technology applications are starting to emerge (e.g. Second Life and Voice over
Internet Protocol - VoIP), which have uncertain business travel implications, but
overall it was agreed that a one size fits all approach to IT was not appropriate
for all organisations since virtual meetings demand particular behaviours and
routines.
0
-10
-20
-30
-40
-50
scenario
Increased travel
overseas
Corporate image
concerns lead to
sustainable
business travel
Virtual travel
promoted due to
carbon footprint
concerns
Virtual travel and
public transport
adopted
29.1
-0.5
-30.7
-38.9
Source: BCC and RAC Foundation (2007)
F
currently spending the most on travel were also more likely to think that travel will
increase. Views on scenario likelihood (See: Figure 11) also differ with a company’s
business travel needs;
n Increased travel overseas: This is thought possible by all businesses, but is
more likely when annual budgets for business travel are above 11% of total
turnover and as average journey times increase.
n Corporate image concerns lead sustainable business travel: The more
travel that is completed the less likely it is that there will be agreement with this
statement.
n Virtual travel promoted due to carbon footprint concerns: This
scenario is seen more likely for employers who do not have a significant
proportion of their workforce travelling, but on the whole is not seen as a likely
proposition for any business travel formats.
n Virtual travel and public transport adopted: This is viewed as the least
likely scenario and is seen as most unlikely for those travelling just 1-2 days per
month.
Source: BCC and RAC Foundation Survey, 2007
27
SECTION 2
SECTION 2
The overriding improvement that all groups wanted to see was better travel
planning. Many thought that business travel plans should be extended to consider
travel throughout the business day and that better incentives for business
involvement in this should be made available. The value of business travel plans to
influence the overall supply chain was also recognised.
The current terminology and branding of travel plans was considered inappropriate
and it was suggested that the whole process should be made more user friendly.
The difficulty for SMEs to be fully engaged in travel plans was also raised as a
concern. They are not captured within the current approach to planning
applications due to their size. This should be rectified and appropriate tax breaks
or area-wide travel plans should be used to encompass small businesses.
However, there was some concern about introducing a further administrative
burden to small businesses and it was felt that any system introduced should not
be bureaucratic.
Business takes on board the need for social responsibility
“Of all the initials for strategies that dominate the business world, such as A&M,
CRM and Rol, CSR has suddenly become the most significant. To be socially
responsible in their approach to customers, staff, the environment and supply
chain has become essential for corporates.
This commitment is partly driven by the requirements of the Companies Act 2006
and the acknowledgement that climate change is a reality, with economic and
regulatory ramifications across all sectors. It also stems from a realisation that
today’s customers and investors are influenced by ethical and eco-friendly
behaviour.”
Source: The Times 24th July 2007, Corporate Social Responsibility Supplement, p.3
The future impact of road pricing was also discussed at the focus group and panel
sessions. Overall it was felt that road pricing would have a significant impact on
traffic, freeing up road space for those businesses that rely on the road network.
Productivity was expected to increase for those who are willing to pay, but
ultimately the extra cost of doing business was likely to be passed on to the
customer. Although businesses recognised the value and inevitability of some form
of road pricing they also felt a lot more could be done with local traffic management
schemes to reduce congestion and aid business travel requirements.
Although the survey results themselves did not indicate that environmental
Corporate Social Responsibility (CSR) issues were likely to impact on the operation
of business travel, in group discussions it was certainly clear that all parties
believed CSR was going to be key to winning business in the future. It was
considered to be the main driver for encouraging businesses to take up
environmental policies. This difference between the survey and focus group
findings suggests that the focus group discussions enabled participants to think
about the question in a wider context. The expert panel predicted that duty of care,
health and safety and the environment will become the key elements of business
decisions in future years.
28
29
30
31
SECTION 3 – THE BUSINESS ENVIRONMENT
SECTION 1
SECTION 1
National GDP has grown consistently since 1992 and has been strongly influenced
by an increase in household expenditure. The UK business environment
comprises 1.64 million VAT registered businesses (ONS, 2006a), a large number
of which are corporate property and business services. When all UK enterprises
are taken into account (an additional 2.66 million, Enterprise Directorate, 2006)
small businesses make up 99% of all business activities. Small and Medium
Enterprises (SMEs) account for over half of all employment, and the South
continues to dominate business activities and employment. Business will be
operating in a changing environment over the next 50 years. The following changes
are expected:
n Increased globalisation, which will open new markets and connect businesses
in new ways;
n An increased environmental focus for business;
n A greater need to travel within connected global markets;
n An increase in overseas competition;
n Further alignment of business to customer needs;
n A focus on higher-value ‘new economy’ activities;
n An increase in bottom-up business development;
n A greater role for technology. Technology will make business more personal to
the consumer and will reduce communication costs through making use of
virtual reality tools such as teleconferencing;
n A greater focus on knowledge management;
n A need to meet changing customer demands (identity, connectivity,
entertainment, self-improvement, health and well-being, security, simplicity,
control, personalisation and price);
n Greater importance placed on collaboration;
n An increase in the mobile workforce, as well as limits to home working
possibilities;
n A need for different organisational structures; and
n Greater pressure on businesses to improve business performance, efficiency
and effectiveness.
32
SECTION 3
SECTION 3
Section 3 The business
environment: Today,
tomorrow and beyond
The following workforce changes and requirements are expected:
n An ageing workforce;
n An increase in female, full-time employees in senior appointments;
n A growing immigrant workforce;
n An increased number of full-time jobs;
n Changing family structures, which may have an impact on working hours;
n A growing importance of training in new communication skills;
n An increase in home and mobile working; and
n A decline in working hours and an increase in informal working.
Source: IPSOS MORI, 2006
Business travel during the course of the business day has been neglected in
current transport planning and policy thinking. The commute has played a much
more significant role in government targets and policies, largely because of acute
congestion experienced during rush hours and the greater potential for alternative
modes to reduce private car use during this time. This report recognises that the
nature of business travel is very much linked to the format of the commute and the
following statistics and subsequent recommendations should be considered with
this in mind.
3.1
Distance, travel time and the reason for business travel
Business travel accounts for:
n 73 trips per worker per year (DfT, 2005);
n 7.3% of total trips per worker per year (DfT, 2005);
n 22% of all personal mileage (DfT, 2005);
n An average trip length of 20.7 miles, which takes 39 minutes to complete (DfT,
2005);
n 18% of all long distance trips (over 50 miles). This is second only to travel to
visit family and friends (DfT, 2007a);
n 6% of all travel for the 40-59 age group (DfT, 2007a); and
n Higher travel amongst men than women. Between the ages of 39 and 59 seven
to eight percent of a man’s annual travel is for business travel purpose, but for
women it peaks at 4% between 40 and 59 (DfT, 2007a).
As a nation we are travelling further than ever before and this is particularly the case
for business travellers, whose travel has increased at a faster rate than other types
of travel (DfT, 2005).
33
SECTION 3
SECTION 3
Figure 13: Business travel throughout the day (Monday-Friday) 2002-2006
NTS, 2007
Percentage of business
travel (%)
Business expansion overseas (33%) and in the UK (18%) is said to be driving this
change (Barclaycard Business, 2006). Of the long-distance travel that is taking
place, the majority is within the 50-75 miles category (See: Figure 12).
40
35
30
25
20
15
10
5
0
15
Business
10
Commuting
5
0
Time (Hours)
Source: DfT (2007a) National Travel Survey
50 to
under
75 miles
75 to
100 to
under
under
100miles 150 miles
150 to
250 to
350
under
under
miles
250 miles 350 miles and over
Mileage
Within the UK, residents in Northern Ireland make the most business trips each
year (See: Figure 14). This is followed by England, Wales and then Scotland. The
South West followed by the South East and West Midlands are involved in the
most business travel. Those living in the London region and the North East make
the fewest business trips.
Figure 14: Business trips by region
Source: DfT (2007a) National Travel Survey
When travelling by car the average occupancy rate for business travel is 1.2 people
per car. Seventy-six per cent of business travel is done alone (DfT, 2007a), and
business travel provides the second lowest car occupancy rate after commuting
(DfT, 2007a). Seventy five per cent of people travel to the same workplace
everyday, 21% work from different places and 3% work from home. Women are
more likely to travel to a fixed place of work and of those not permanently working
from home, 15% are able to do so at some point (DfT, 2007a). These trends have
an impact on travel during the business day.
The timing of business travel is very similar to that of commuting (See: Figure 13).
Business travel like commuting peaks between 8am - 9am and 4pm - 5pm, but is
consistently high throughout the course of the day.
South West
Northern Ireland
South East
West Midlands
England
Great Britain
Region
Percentage of all long
distance business travel (%)
Figure 12: Long distance business travel (2004-2006 average)
20
East
Wales
Scotland
East Midlands
North West
Yorkshire and the Humber
London
North East
0
10
20
30
40
Trips per person per year
Source: DfT (2006a) Regional Transport Statistics
34
35
50
60
SECTION 3
SECTION 3
When looking in more detail at the make-up of business trips, internal company
meetings account for 30% of all business travel, followed by sales and marketing
trips (24%) and attending conferences (21.3%). US business travellers make
comparatively more trips for sales and marketing purposes and attend more
conferences and expos (65.1%). UK and continental European business travellers
make significantly more internal company visits, than their US counterparts (Mason,
2003).
3.2
Mode of travel
Car travel dominates the complicated business travel market (See: Figure 15). The
following section provides more detail on the transport modes used for business
travel.
Figure 15: Mode of travel for business and commuting (NTS, 2007)
3%
Car Driver
3%
Walk
7%
7%
Car passenger
In 2006 there were 27 million licensed cars in the UK;a 25% increase over a tenyear period. Cars are predominately used by the sales, professional, public
services and executive industries. In 2006 8.7% of all registered cars were
company cars; a 1.6% decrease from 1996 levels (See: Figure 16) partly due to
tax and legislation changes. Since 2004, fewer employers have been reporting
company cars as benefit in kind on P11Ds and the benefit has been treated as
salary taxed through payroll. There has also been a noticeable switch to employee
car ownership schemes from 1999 onwards (See: Figure 17).
Company car still a top perk for employees
“Company car schemes are still among the most popular employee benefits,
although the emissions-based benefit-in-kind tax changes have knocked it off
the top spot…According to research by Employment Review magazine among
half a million employees, more than half of firms (55%) still offer a company car,
but this number has slipped dramatically since the introduction of CO2-based tax
in 2002, when eight out of 10 firms offered the benefit.”
Source: Fleet News, 20th June, 2007
Figure 16: Percentage of company car stock treated as benefit in kind
Surface/
rail/underground
9%
80
Bus
70
60%
11%
Cycle
Source: DfT (2007a) National Travel Survey
3.2.1
Car
Percentage (%)
Other
60
50
40
% of stock
treated as
benefit
in kind
30
20
Sixty-nine percent of business trips are made by car with an average of 1.2
passengers per vehicle (DfT, 2007a). Ninety-four per cent of SMEs make use of
the road for their business travel and 82% describe the car as central to their
business operations (BCC, 2006). Congestion is now so bad on UK roads that
company car drivers each waste a total of 11 days per year in congestion (RAC
Foundation, 2007).
36
10
0
1999
2000
2001
2002
Year
Source: HMRC (2006a) P11D Returns
37
2003
2004
SECTION 3
SECTION 3
Figure 17: Company cars licensed as a percentage of the vehicle stock:
1996-2006
Table 1: Annual mileage by type of car and trip purpose: 2006
2006
Business mileage
Commuting mileage
Other private
mileage
Total
mileage
12
Mileage % of total
mileage
Percentage (%)
10
8
Company
cars
6
Company
cars
4
2
0
Mileage
% of total
mileage
Mileage
% of
total
mileage
7,510
39
6,390
33
5,300
28
19,200
6,000
44
3,530
26
4,130
30
13,670
Household
car used
for work
3,340
28
3,830
33
4,560
39
11,730
Other
household
car
60
1
2,340
31
5,030
68
7,430
680
8
2,570
31
4,940
60
8,190
1,040
12
2,770
32
4,960
57
8,770
Selfemployed
business
car
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Year
Source: DfT (2006b) Vehicle Licensing statistics
All private
cars
The average number of miles driven per company car on business in 2006 was
around 7,500 (DfT, 2007a) which was over double the distance travelled by
employees using their private car for work (See: Table 1). People with company
cars commute twice as far as employees who use their own cars for work or those
who are self-employed. This supports the idea that company car owners are more
likely to live further away from their fixed workplace, possibly in rural suburbs (See:
Table 1).
Company cars are important for ‘getting business done’ but they are also a status
symbol. They are the third most important employee benefit after a pension
scheme and a generous holiday allowance. Women and employees within the
41-50 age category give company cars the most weight (Bank of Scotland
Corporate, BSC, 2007) and they remain an important factor when it comes to
attracting and retaining employees. Seventy percent of all company cars are
allocated to essential users whereas 30% are distributed for ‘status’ reasons (BSC,
2007).
All 4wheeled
cars
Source: DfT (2007a) National Travel Survey
Company car in fleet comeback
by Phil Tromans
“An increasing number of fleets are turning away from cash alternatives and
returning to company car schemes. Only 40 out of the 251 firms questioned said
they were likely to offer cash in the future, compared to half the respondents in a
survey in 2005. Duty of care was given as the main reason for abandoning cash-forcar schemes – firms found that complying with legal control and oversight
requirements on vehicles used for company business was easier for company cars”
Source: Fleet news, 15th February, 2007, p.3
Over half of all company car drivers are spending more than two hours a day in
their cars, but total business and private miles have reduced in recent years.
38
39
SECTION 3
SECTION 3
Diesel continues to be the top choice for company car drivers. Over half of drivers
would choose a hybrid car (18% increase from 2006), but four out of five companies
do not encourage or offer incentives for their staff to use alternative fuels.
Overall, company car drivers believe that an emission based tax system is a good
idea, but only one third of drivers know their vehicle’s C02 emission level. Willingness
to change is evidenced by the 53% who would change the make or model of their car
to reduce their emissions (BSC, 2007).
There are also indications that the popularity of the company car is returning, after an
initial decrease in uptake following the company car tax changes in 2002. Employees
who had previously opted for a ‘cash-out’ company car scheme are now opting back
in as company cars are considered convenient. Over half of drivers allowed to take a
cash alternative have remained with a company car scheme primarily because they
prefer the security of a company maintained car (BSC, 2007).
Nearly half of all company car drivers have limited or no choice when it comes to
selecting their company car. When options are available, safety is the number one
consideration with fuel economy and suitability for the job ranking second and third.
A large proportion of cars driven for business are privately owned. This is a concern
for road safety as personal vehicle maintenance may not be as rigorous as fleet
management checks. The trend towards using a privately owned vehicle for business
travel might also have an environmental impact (See: Table 2).
Table 2: Environmental pros and cons of company and private car use
during the course of business
Pros
Cons
Company car
- Business can limit the cars available
and individuals will be directed by
company car tax bands for emissions.
- More fuel efficient, newer and
better maintained.
- If a company car is available higher
usage may result, due to minimal
personal monetary cost.
Private car
- If an individual owns a car they may
be less willing to add to its mileage
and consequent depreciation and
servicing.
- The current fixed payment per mile is
approximately 40p, which some
consider to provide a good way of
earning extra money. The true cost of
running a car can be much higher
although few reinvest the payment for
mileage back into vehicle maintenance.
Source: Authors’ own
40
Green schemes grab attention
by Mike Roberts
“Fleet executives who have launched successful environmental initiatives are being
urged to highlight their achievements to win valuable boardroom support.
Executives at vehicle management company LeasePlan are highlighting the
important role Corporate Social Responsibility (CSR) plays in the boardroom and
say fleet managers have a “Golden Opportunity” to put their work on the strategic
agenda…“Fleet managers can use the interest in CSR not only to gain the attention
of senior management, but also to encourage their companies to move to the
forefront of business practice””
Source: Fleet news, 7th June, 2007
3.2.2
Vans
The rise in van use is an important development in the context of business travel.
There were approximately three million vans under 3.5 tonnes on UK roads in
2006: the fastest growing sector of road user. Van miles have risen by 50% in the
past 12 years compared to the 19% increase for all traffic.
Vans are used for a number of different business purposes:
1. Carrying goods e.g. delivery vans or building materials.
2. Carrying tools and equipment e.g. service vehicles, tradesmen.
3. Private – instead of car e.g. for travel to and from work and for personal
business.
Travelling to and from work accounts for about one third of the mileage in both
private and company vans (See Table 1), but there are significant differences
between company and privately owned vehicles (See: Table 3).
Transportation of tools, machinery and equipment accounts for just over half (53%)
of all van travel, whilst empty vehicles account for 16% of the total distance
travelled (See: Table 4).
Eighty-six per cent of the distance travelled by company owned vans was for
journeys that started and ended in the same Government Office Region, as did a
slightly higher number of private van journeys (91%). Fewer journeys starting in
41
SECTION 3
SECTION 3
London finished in the same region (70%), whereas almost all journeys starting in
Scotland ended there.
When considering van travel in the overall context of business travel, vans make
up 38% of all business miles (if vans are included in National Travel Survey figures
2002/03) and provide a form of travel which is not easy to replace with IT or other
modes of transport.
Table 3: Vehicle miles by reason for use
% of vehicle miles
Private
Company
Travelling to and from work
45%
33%
Collection/delivery of goods/equipment and empty
travel after completing delivery
23%
35%
Personal use
17%
3%
Travelling between jobs
10%
24%
Other business use
5%
6%
Total vehicle miles (2003/04)
10.3 bn
21 bn
Total vehicle miles not on private or commuting use
3.6 bn
13 bn
Miles per vehicle per year
9,400
14,900
Source: DfT (2004) Transport Statistics Bulletin
Green concerns top fleet agenda
by Mike Roberts
“Environmental concerns have overtaken duty of care as the biggest concern for
fleet managers this year, a new poll of companies have found.
The vast majority of the 830 fleets surveyed (94%) now list the environment as their
top consideration when making fleet decisions, up from 57%. The findings are
produced in GE Commercial Finance Fleet Services’ latest quarterly Company Car
Trends report.”
Source: Fleet News, undated
42
Table 4: Types of products carried by van
% of products carried
Company
Tools, machinery and equipment
53%
Food and drink
7%
Paper, mail and parcels
6%
Other products
17%
Empty
17%
Source: DfT (2004) Transport Statistics Bulletin
3.2.3
Rail
Despite the dominance of cars and vans in the business travel market, rail travel
also has an important role to play. Ninety-one percent of businesses currently
make use of the rail network for business travel purposes (BCC, 2006).
Sixteen percent of all train travel is for business travel purposes (DfT, 2007b) and
surface rail and the underground are used for 7% of all commuting and business
travel (DfT, 2007a). The peak time for rail business travel is 7am to 8.30am and
6pm to 6.30pm, with the level of business journeys between these times remaining
constant throughout the day (DfT, 2007b).
Just over a quarter of all businesses have seen an increase in their use of rail over
the last five years, a reaction to increased congestion on the road network. The
railway industry however, still faces a major marketing challenge to convince the
business community that the overall service has improved. Punctuality and
reliability of the rail network are of greatest concern for businesses; over two-fifths
feel this should be the number one priority for improvement. There is a clear
message that reliability is more important than speed, closely followed by the cost
of travel. A simpler tariff system and trains running on time are the main
requirements (BCC, 2007a).
3.2.4
Aviation
Sixty percent of businesses rely on air transport and this figure rises to 80% for
manufacturers. 90% of companies use the network for business travel purposes
and around 50% use it to deliver or receive goods and documents (BCC, 2006).
43
SECTION 3
SECTION 3
The air network is seen as important by 51% of business users and is essential to
17% of their business operations (BCC, 2007a).
Almost half of businesses have seen their air travel usage increase in the last five
years, mainly because their business has become more internationally focused.
The benefits of air transport, in comparison to other modes, includes the number
of routes on offer and its cost (BCC, 2007a).
In terms of improvements in air travel, businesses would like to see transfer and
waiting times reduced, the punctuality and reliability of flight times improved and
further expansion of the routes on offer. Businesses accept the rigour of security
required at airports, but think new ways of approaching the challenge are needed.
Gaining access to a local regional airport, either directly or via a connecting hub, is
more important to businesses than accessing Heathrow or other London airports
(BCC, 2007a).
Focus group discussions highlighted the importance of aviation to businesses and
confirmed that an increasing number of regional business journeys are being made
by air which provides a quick and cost effective alternative to road and rail travel.
However, aviation has been intentionally excluded from this study which is focusing
on business travel within the UK.
3.2.5
Other modes of transport
Buses, coaches, walking, cycling and motorcycling are used less frequently than
the car for business travel. Buses are used for 7% of all business and commuting
trips (DfT, 2007a) and walking and cycling are mainly used to complete a journey,
unless business travel is very short distance (i.e. under 2 miles).
Using motorcycles for business travel can cut time wasted in congestion and have
a significant impact on reducing CO2. They can also provide fleet management
cost savings. Motorcycles and bicycles dominate the courier and fast food delivery
markets but recently some firms, eg Jacobs Babtie, transport consultant, have
banned their use for health and safety reasons. Although cyclists are at a higher
risk than other road users, there are significant benefits to be gained in using these
forms of transport, as long as the appropriate training has been undertaken.
Given the nature of business travel, these other modes are unlikely to be used
more in the short term, but they should be planned for and encouraged where
appropriate.
44
Green transport specialist tells its workers to ‘get off your bikes’
One of Britain’s biggest engineering companies has banned staff from travelling on
bicycles or motorbikes after declaring them too dangerous.
Jacobs Babtie advises local authorities on sustainable transport projects –
including how to get more people to switch from four wheels to two. It has told
staff at its 36 offices across Britain that they must drive or use public transport.
They can use bicycles only if they are working away from roads, such as on canal
towpaths.
Source: The Times, 6th July 2007
3.3
The business traveller profile
The business traveller is a definable individual. The Times readership is said to have
a very similar demographic profile to the business traveller (Mason, 2000).
Business travellers have the highest household incomes and car ownership rates
of all traveller types (DfT, 2007a). The definition of a ‘business traveller’ is widening
as the tasks required of the working population change. The ‘mobile worker’ makes
up the fastest growing group and forms around 5% of the European workforce
(Sustel, 2004).
The motivations for and attitudes towards business travel are relatively consistent
for all ‘business travellers’. Over three-quarters (78%) of business travellers enjoy
travelling for business, 66% like the variety, 62% appreciate the opportunity to see
the world and 51% enjoy experiencing a new culture. Frequent flier schemes boost
the enjoyment of business travel for 15% of travellers, while 8% enjoy the prestige
business travel brings. Cancellations, missed connections and delays were viewed
as the worst occurrences related to business travel and Londoners along with
those in the South East enjoy business travel the most (Barclaycard Business,
2006).
Business travel ‘trip-chaining’ depends on the business traveller. Fifteen percent of
work and business trips made by men are followed by a further trip to work or
business. This compares to 8% of women, who were more likely than men to
follow a business or work trip with shopping, education or a social visit (DfT, 2005).
45
SECTION 4 – THE WAY FORWARD
SECTION 3
These different patterns of movement need to be considered when thinking about
the future of business travel since the number of women working in higher status
positions is set to increase by 2015. Women have different travel needs from men
(e.g. family commitments, modal preferences, safety concerns) and therefore
future business travel will need to cater for this change.
46
47
SECTION 4
SECTION 4
Section 4
The way forward
Ten ways to cut your carbon footprint at work
...6. Think before you travel on business
4.1
Business travel impacts should be considered at an early stage in
business decisions
The extent of a company’s business travel will be determined by business location,
organisational structure, industry and market. Collaboration requirements as well as
transport infrastructure, technology and information availability will also have an
impact. The shift from the command-and-control organisation was predicted in the
early 1980s (Drucker, 1988), and this form of operation has implications for
business travel. Departments and divisions in information-based organisations
have become more dispersed and networked, virtual organisations run on trust
rather than control, can lead to increased (e.g. visiting all centres) or decreased
(e.g. visiting customers within a regional office area) travel. This is just one example
of how business operations can influence required travel. A planned approach is
necessary for more efficient business development and once a company has
chosen its operational location(s) it should be encouraged to ask two questions; is
business travel required for this transaction and, if so, what company policies exist
to support the most sustainable and suitable approach?
“Is your business trip really necessary? Or is there an equally effective way you can
communicate? Lots of business is traditionally done face-to-face but, in this
technological age, need it be? The usual modes of business travel – car and plane
– won’t help you reduce your company’s carbon footprint.
Flying from Glasgow to London for example, generates six times as much carbon
dioxide as going by train…aim to reduce your CO2 emissions from business travel
by managing the absolute need to travel and by providing alternative means of
communication, such as video conferencing…suites can be hired for around £150
per hour…The CO2 emissions produced from travelling to and from work are equally
important to address. Organise car-sharing, cycle, walk or use public transport. The
savings made can be up to 0.5kg of CO2 for every mile you don’t drive.”
Source: The Independent Thursday 2nd August, 2007
4.2
Pointless meetings raise carbon output
by Steve Moody
“A third of meetings company car drivers attend annually are a waste of time and
are contributing unnecessarily emissions to firms’ carbon footprints, while affecting
productivity.
A study found that on average, employees attend 91 face-to-face meetings a year
with 37% of them unnecessary and even counter productive. Over their working
lives typical British workers will create 42 tonnes of carbon dioxide from business
travel. The research, by online meeting firm WebEx suggests that many firms are
working inefficiently and costing themselves money and time, whilst also causing
environmental harm”
Source: Fleet News Online 6th June 2007
48
Determining whether business travel is required
During the course of the day individuals may need to conduct formal meetings,
take part in concentrated study or a relaxed discussion. Different travel and
communication methods will be suitable depending on the business methods
required. All businesses are different; some will rely on a ‘hand-shake’ to do
business, whereas others will be much more adept at conducting business
remotely. Face-to-face personal meetings are thought to be the most effective way
of doing business, seeking new markets as well as exchanging ideas within and
outside the company (Leamer and Stroper, 2001).
First time meetings, presentations, training, and activities abroad, all benefit from
the personal atmosphere and direct feedback enabled by this approach (Denstadli,
2004, Roy and Filiatrault, 1998). However, despite the advantages of face-to-face
communication it can lead to additional work on return, a loss of control over
employees, projects, costs, fatigue and inconvenience (Haynes et al, 2005). It is
therefore important that the business type, its circumstances and the business
transaction required, determine how business travel is planned and conducted.
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SECTION 4
4.3
The importance of ‘The meeting’
Britain is a place of networks and networking, a ‘connecting economy’. Since ‘few
of us actually make anything: we have meetings, we make presentations, we
encourage people’ and hence ‘our work is based on the influence we have over
our networks’ especially through meetings (Justin Worsley, Associate Director,
quoted Leisure Week, June 15th, 2000).
Meetings are complex encounters, ‘ritual affairs, tribal gatherings in which the
faithful reaffirm solidarity and warring factions engage in verbal battles … When
in doubt call a meeting. When one meeting isn’t enough, schedule another’
(Boden 1994: 81).
IN : Lyons et al, 2004
Business opportunities ‘being missed’
By John Willman
“Business is failing to exploit the opportunities presented by growing public
concerns over climate change, according to a survey of top executives from
around the world.
The survey, by the Economic Intelligence Unit, found that only one in ten of the
businesses surveyed was fully monitoring its overall carbon impact, and most of
the companies did not see environmental strategy as a way to improve their
market position. More than a third of the executives said carbon reduction would
enhance their image. But only 15 per cent saw it as a marketing opportunity and
just 7% saw it as a way to differentiate their products. One in six companies that
had started to cut their carbon emissions said that measures had already boost
profits, while a third expected a boost in the next three years.”
“Although relatively few companies are taking action to reduce their carbon
impact today, it is interesting to see that business wants clarity from Government
over this issue. They don’t see carbon reduction as a major cost, but they want
to know how far they have to go”. James Watson from Economist Intelligence
Unit.
Planning for more sustainable business travel
There is a great deal more that companies could do to encourage sustainable and
efficient business travel.
Thirty-eight percent of all business travellers have no company policy to refer to
when booking business travel (Barclaycard Business, 2006) and where travel
policies are in place, business travellers tend to see them as ‘guidelines’ rather than
policies set by the business travel managers (Mason, 2002). Strong policies
relating to sustainable travel are therefore needed, with the initiatives and incentives
to support their aims.
Companies could do this is by developing bonus or carbon trading schemes for
rewarding cost efficient behaviour. Alternatively companies could invest in webbased car sharing schemes (Robert, 2003). Changing company car policy or car
parking charges can also have a significant effect. A study by Shoup (1997)
demonstrated that when commuters paid for parking they drove an average of 53
cars to work per 100 employees but when commuters parked free they drove an
average of 72 cars per 100 employees This has significant implications for travel
during the business day.
The business benefits of business travel policies are significant. The three main
benefits have been defined as:
n Efficiency: If less time is spent travelling or more travel is ‘productive’ (e.g.
working on a train) then worker productivity is improved;
n Image: Business travel policies can contribute significantly to a company’s
Corporate and Social Responsibility requirements. Kudos and an improved
corporate image can result from making considered business travel choices;
and
n Road safety: Increased compliance with employers’ duty to manage
occupational road risk by promoting virtual or sustainable travel.
4.3.1
Using modes other than the private car
For some business journeys there is potential for businesses to use alternative
modes to the car. See figure 18 overleaf.
Source: The Financial Times 15th May 2007
50
51
SECTION 4
SECTION 4
Figure 18 Company mobility choices
Plane beats train on cost and speed as discount fares prove elusive
Competitors
Car Sharing
Co-operation
Rental car
Employees’
cars
Company
Mobility
Taxi
Courier
services
Company
cars
Walking/
Cycling
Public
transport
Source: Reutter & Böhler: Car Sharing for Business: The Aachen region pilot project (2000)
Car sharing, rather than car pools, provides a company with increased flexibility
and a reduction in fixed costs (i.e. vehicle acquisition and running costs) as only
variable expenses arise. For new set-ups car sharing presents the possibility of
reducing or avoiding the liability of a fleet. Urban companies may be able to car
share with similar sized businesses, (Reutter and Böhler, 2000) and increasingly
car clubs are providing a realistic business travel option as their numbers
increases.
Rail is the second area which can provide both a cost and time efficient travel
method for businesses. It is claimed that on certain journeys, the train can provide
ING’s online driver club due August
by Hugh Hunston
“ING Car Lease’s new online Drivers’ Club is due to go live by the end of August
as the organisation aims to get more company car drivers involved through
affinity schemes…Mark Gibson, head of strategic marketing, said; “We want to
get closer to business car drivers. The club site, which is not passwordprotected, will carry direct links to services such as AA Roadwatch and advice on
taking cars abroad.””
Source: www.businesscar.co.uk 26th July 2007
52
“Long distance rail is so expensive that it is usually cheaper to travel by air,
according to a survey by Which? The survey found that, for some journeys, the
train was twice as expensive as the plane and took more than three times as
long.”
Source: The Times Tuesday 6th March, 2007, p.12
a competitive alternative to the car, in some cases reducing the employer’s costs
by a fifth (Kirby et al, 2006). Business travel time by train is location dependent but
the benefits of productive travel time outweighs the time and ticket costs in most
instances. For train journeys of 1-3 hours in length, 69% of business travellers will
do some valuable work (e.g. working on documents or studying) and for 41% it is
the activity they will spend most time on (Kirby et al, 2006). A note pad and pen is
still the most important resource for mobile working as it can be easily carried and
shared with others (Brown and O’Hara, 2003; Sellen and Harper, 2001 and Lyons
et al, 2007). This shows that expensive onboard IT systems may not be required
to encourage business travel. ‘Frequent rider miles’ instead may help boost rail for
business use.
Faster, more regular services, e-ticketing and cleaner trains would also encourage
more business travellers to use rail. 61% of business travellers purchase their
tickets at least one week in advance (Barclaycard Business, 2006), and only 24%
of rail business travellers make use of open return tickets (DfT, 2007b); indicating
that a simplified ticketing system would be of use. Car parking capacities at rail
stations after the morning peak are limiting business rail travel (Passenger Focus,
2007) particularly as business travellers are more likely to use a car to reach the
station than commuters or leisure travellers (DfT, 2007b).
With the growth of air travel and its impact on the environment, government should
ensure competitive road and rail alternatives.
In many cases a selection of travel options are available for business use but a lack
of either corporate policy or government incentives limits uptake. Many local
authorities and some companies believe that providing information about travel
options is enough to encourage change. Information provision can help, but it ‘is
not a panacea - human nature and indeed the availability of and relative merits of
53
SECTION 4
SECTION 4
actual travel options’ (Lyons et al, 2006) are central. Habit, mental effort, inertia and
the availability of travel choices are the most important considerations which require
attention, if the country’s workforce and business community are to change current
ways of working.
4.3.2
Changing the face of business travel with technology
“From a future perspective the Internet will be on a par with the invention of the city
as a force of human culture”
Source: Gibson, 1995 IN: Scottish Executive, 2006
Information Communication Technology (ICT) has changed the way that we live and
has had a significant impact on how business is conducted within the ‘global
village’. According to an Economist Intelligence Unit Report (Feb, 2007) almost half
of all companies (47%) say a 24-hour IT failure would threaten their survival, which
illustrates the prominence of IT in current business activity. The link between
increased transport and economic growth has been decoupled as a result of ICT
growth (SACTRA, 1999) indicating that there is significant potential for ICT to
reduce future business travel.
This study focuses on the use of IT during the course of the business day. A
significant body of literature exists to explain the benefits of telecommuting (e.g.
Dodgson et al, 2000, Cairns et al, 2004, Forum for Future, 2006, Sustel, 2004),
but this section deals specifically with the available evidence quantifying the
benefits and drawbacks of ICT use during the business day. Teleconferencing,
videoconferencing and online networks all have an impact on business travel, but
there is still some disagreement about the impact of these tools. Generally
speaking, there are three likely effects (Lake, 2003a):
n Substitution of travel;
n Reduced travel; and
n Generated travel.
A number of studies looking at individual case studies have attempted to establish
the effect of these technologies (See: Table 1 below). There is a varying degree of
substitution of ICT for travel (Bender and Stephenson, 1998, Denstadlli, 2004),
however there is also evidence suggesting a stimulation or generation effect (Saffo,
1993, Roy and Filiatrault, 1998, Mohktarian, 2003).
54
Huge rise in SMEs
“If anyone were in doubt that 2007 is shaping up to be the year where SMEs
follow in the footsteps of large companies and investigate IP telephony, the latest
figures released by VoIP provider Inclarity would probably convince them. The
company has revealed a 750 per cent rise in SMEs switching to VoIP, meaning
that nearly two in three of its customers in the past year have been SMEs. It
estimates that the country’s SMEs could save £1bn per year by converting to
VoIP. The company believes that small and medium companies are now starting
to come under the same pressure as large companies to offer staff flexible
working to show they are ‘doing their bit’ for the environment”
Source: The Times supplement on Internet Telephony, 28th February 2007
Given the continuous and fast paced development of cheaper audio and visual
technologies it is feasible that ICT will increasingly be substituted for business
travel. It is also likely that the technology will continue to be used for follow-up
meetings rather than serving as a forum for formal introductions (Toffel and Horvath,
2004). The most cited advantages, disadvantages, barriers and limits to the use of
ICT are detailed in Table 6 on page 57.
The environmental impacts of ‘e-commerce’, also require consideration. Some
commentators have referred to e-commerce as being ‘by far the biggest “killer app”
of the digital revolution’ (Chang Yang, 2000), as the Internet tends to encourage
growth rather than reduce the presence of products.
One study in particular has quantified the environmental impact of IT by comparing
dust-to-dust carbon emissions from reading a newspaper versus receiving the
news on a wireless Personal Digital Assistant (PDA). The wireless technology
releases 32 – 140 times less carbon dioxide and several orders less of oxides of
nitrogen and sulphur than the paper version.
Wireless teleconferencing substituting for business travel also returns similar
environmental benefits. This amounts to a company, which converts 100 meetings
a month to wireless teleconferences, reducing their CO2 emissions by 720 million
grams per year (Toffel and Horvath, 2004).
55
SECTION 4
SECTION 4
Table 5: Impact of ICT on business travel
Business
travel tool
Impact
Study
Video
Substitution especially for internal meetings.
conferencing 40% of users managed to replace some travelling with ICT.
10% have experienced substantial replacement.
29% of companies make use of video conferencing. Mostly
used by managers for internal meetings. Mid sized companies
with 20-100 employees had increased their usage.
ICT (all)
Arnfalk (2002)
Denstadli and
Julsrud (2003)
75% of Small and Medium Businesses think it will involve
and reach more people, save travel costs and time.
69% believe it will enable new meetings, which could not be
held any other way. Could decrease business costs by 50%.
Wiredred.com
Within 5 years:
Video and audio conferencing could cut business travel
by up to 3%. Within 10 years:
5% reduction in business travel.
The benefits to the economy in reduced congestion
costs would be up to £1.9 billion by 2010.
Dodgson et al
(2000)
RAC Foundation
commissioned
Employee collaboration is the main reason for using
telepresence software.
78% of US and 69% of UK companies expect technology to
improve relationships and create faster decision making in business.
90% in the US and 78% in the UK expect travel savings
particularly from executive road warriors (e.g. salespeople).
84% in the US and 68% in the UK report that less travel
should increase employee productivity by making employees
more available for other meetings, possibly up to 5 or 6 per month.
81% think there will be travel cost savings.
Cisco Systems
(2006)
Heavy users of ICT had greater work-related travel.
BEA - KPMG
(1997)
Travel shifting identified. Short-term substitution followed by
long-term travel increases.
Saffo (1993)
Substitution on intra-business travel likely. Not suitable
for certain sectors. Travelling is always necessary.
Denstadli and
Lian (2004)
Roy and Filiatrault
(1998)
11% reduction in travel possible.
Advantages
Disadvantages
Barriers to use
Limits to use
Time and cost
savings.
Efficiency.
Inclusiveness.
Costs (e.g. initial
set up).
Technical problems.
Uneasiness of
some users.
Lack of face-to-face
contact.
Problems for
management.
Lack of awareness.
Availability and
quality of evidence
to support use.
Scepticism of the tool.
Complex relationship
between ICT
and travel.
Cultural and
language barriers
across borders.
Time zones.
Source: Authors’ own
You’ve got email…all six trillion of them
by Stephen McGinty
“It has stretched the working day far beyond the nine to five, allowed us to check
in at the office wearing pyjamas instead of pinstripes and has now trumped the
phone as our business tool of choice.
Email, both the saviour and scourge of modern life, is now more popular than the
phone, both mobile and land line according to new research. While fans praise email as cheap, quick and easy to use, critics are concerned that it is leading to
mixed messages, excessive stress and poor communication skills.”
Source: The Scotsman, Monday 20th August, 2007. Research in article from Dimension Data
Scottish
Executive (2006)
70% of travellers and travel managers believed that these
Mason (2002)
technologies had no substantial effect on the number of trips made.
Over 5 years some substitution expected.
22% thought it could be used for internal meetings and
meetings with well established business partners.
36% thought they would increase the number of trips by
over 15% in 5 years time.
Access to email (84%), teleconferencing (36%) and
videoconferencing (32%) were the technologies that
had the greatest impact on business travel in 2005/06.
Of those travelling less for business, 25% put it
down to technology reducing the need.
Table 6: Considerations when using ICT
Barclaycard
Business, 2006
Video and face-to-face important too
“Researchers have found that an over-reliance on email, a failure to respond to
messages, and the use of inappropriate modes of communication can damage
trust and hamper the progress of critical projects. When virtual teams neglect the
need to socialise, make visual contact and establish up-to-date communication
guidelines, the trust they form is often fragile and easily compromised, leading to
conflicts and the breakdown of relationships, the report finds.
The Cisco study “The Psychology of Effective business communications in
geographically dispersed teams’…examines the erosion of trust which can effect
virtual teams. By comparing the pros and cons of computer-based
communication with face-to-face interactions, the report identifies new rules for
communicating that will help virtual teams to work together successfully.”
Source: The Times supplement on Internet Telephony, 28th February 2007
Source: Authors’ own
56
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SECTION 4
SECTION 4
Not all individuals or countries are equally suited to or as advanced in virtual mobility
approaches to business travel. The UK is relatively advanced in its adoption of
‘wired working’ in European terms, but it lags behind the Nordic Countries and the
US. There is also a difference between the sexes, as men tend to find more
sanctuary at work than women, making men less likely to work from home (Data
abstracted from www.gilgordon.com ).
4.4
The role of government policy
The government wants to encourage the use of flexible working as ‘it can ease
pressure on infrastructure, facilitate regional development and help employees
improve the balance between work and home life’ (DTI, 2003). Currently there are
no coherent policies which support the encouragement of sustainable or efficient
business travel during the business day.
One government policy which has been particularly effective in influencing
business travel is the change of company car tax rules in 2002, which reformed
the use and type of cars within the company car fleet.
4.4.1
Company car tax
In the first year of the new tax system, the number of business miles was reduced
by over 300 million miles per year and the average CO2 emissions of new
company cars decreased from 196 g/km in 1999 to 182 g/km in 2004 (Inland
Revenue, 2004 IN: Enoch et al, 2005).
Company car tax reforms have encouraged substantial numbers of people to
choose cars with lower CO2 emission figures, to the extent that average CO2
emissions for company cars were around 15g/km lower in 2004 than would have
been the case if reforms had not taken place (HMRC, 2006b). 60% of company
Fleets call for bio-fuel incentives
“Bioethanol or E85-powered cars will remain a minority business car market
unless the Government recognised the sustainable fuel’s superior ‘well to wheel’
CO2 emissions rating and applies greater ‘kick start’ fiscal incentives… Alan
Carpenter, Volvo’s international fleet sales director said “There is a pressing need
for the Government to demonstrate leadership with an agenda supporting this
greener technology through its market infancy”
Source: www.businesscar.co.uk, 22nd June, 2007
car drivers who were given a choice of company car by their employers were
influenced by the company car tax reform and chose a car with lower CO2
emission figures.
Evaluation work also suggests that if drivers no longer have a company car they
will choose private cars with CO2 emission figures that are around 5g/km higher.
The importance of company and fleet cars should not be forgotten, as they allow
people to go about their daily business and they also help green the overall fleet.
They are also more likely to be properly maintained thereby providing a crucial
safety benefit.
Company cars remain a status symbol due to their high economic value, scarcity
and visibility. Research even suggests that providing a company car rather than the
salary equivalent is the most effective way to gain employee satisfaction (Enoch et
al, 2005).
Company car tax rules
Since 2002 the tax charge on company cars has varied according to the level of
C02 emissions. Costs build up from 15% of the cars price for cars emitting
165g/km C02, in 1% steps for every additional 5g/km over 165g/km. Diesel cars
not meeting Euro IV emissions standards incur an additional charge of 3%, up to
a 35% ceiling. Further reductions are available for company cars using cleaner
fuels and technology.
58
59
60
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SECTION 5 – CONCLUSIONS AND RECOMMENDATIONS
SECTION 4
Travel is necessary for businesses, but action has been taken by SMEs to reduce
unnecessary travel. Initiatives are in place to reduce reliance on the car, but further
reductions will be very difficult to achieve without senior management support.
National and local government support is also needed. SMEs are taking a
leadership role, whilst recognising that there are some business trips that cannot
be replaced, since face-to-face communication is central to many business
transactions. Public transport is, on the whole, ‘not fit for purpose’, which means
that the car, supported by IT solutions will be the dominant tools for future business
travel arrangements.
SECTION 5
SECTION 5
Section 5 Conclusions
and recommendations
n
n
n
n
Rail transport operators should:
n
Based on the conclusions from this report, the following policy recommendations
are suggested:
Individuals should:
n
n
n
n
Be encouraged to think about whether the journey they are about to make is
necessary or if it could be done another way;
Refer to company policy on business travel before committing to a trip;
Consider the fuel efficiency of their chosen vehicle if in a cash out scheme; and
Think about improving the environmental and fuel-efficiency performance of
their car journey (e.g. maintain optimal tyre pressure, ecodriving, plan efficient
routes, travel at times when there is the least congestion, minimise
unnecessary loads).
n
n
n
n
n
n
n
n
Businesses should:
Develop policies and protocols for travelling during the course of the working
day. These may be part of a business travel plan and should link in with plans
for commuting;
Obtain buy-in for initiatives at all levels;
Look into delegating budgets for business travel down to line managers and
individuals to encourage direct responsibility. Costs should be aggregated for
auditing purposes;
Consider providing profit related bonuses linked with business travel savings to
provide incentives for staff to consider their business travel options;
Work with the local authority, public transport operators and other SMEs to
develop transport options in the local area;
62
Establish the availability and cost of VoIP (Voice over Internet Protocol – e.g.
SKYPE), teleconferencing and videoconferencing for use in the course of
business. Resulting staff training requirements should also be established;
Consider contractual terms with suppliers and customers to set a protocol for
frequency of face-to-face meetings and other methods for communication;
Think about how the workforce may be able to reduce their business travel by
encouraging flexible working; and
Where it is not possible to reduce or supplement car travel with other modes,
consider options available for reducing the environmental impact of business
travel (e.g. ecodriving, better scheduling, vehicle stock, loading etc).
Work in partnership with other transport operators to develop schemes that
improve the competitiveness of the railways for end-to-end business journeys (i.e.
carpool, carshare and taxi share schemes). In city or urban areas, onward public
transport options should be well signed and easily accessible for the one-off
unfamiliar business traveller. Linking onward journey information to rail booking
systems would be a very useful addition (e.g. through www.transportdirect.info).
‘Plusbus’ is a useful initiative, but needs further advertising;
Ensure there is adequate station car parking for business travellers, to help
encourage modal shift from car to train. This could be achieved through
allocated business travel parking;
Have a ‘frequent business user’ or similar loyalty scheme to encourage more
frequent business travel. Points collected could then be used for reduced ticket
fares, free Wi-fi access, first class upgrades or station lounge usage; and
Develop booking systems to rival airlines. Business journeys are often planned
many months in advance, but current booking procedures only allow bookings
to be made three months in advance. Equivalent bookings for air travel can be
made a year in advance. Rail companies must keep up with the service and
ease of booking provided by the airlines to secure regional journeys. Simplified
ticketing systems are needed.
Bus operators should:
n
n
Provide good quality, clean and safe fleets to encourage use;
Ensure that their services are direct and timely to secure business traveller use,
by targeting key business parks and industrial estates. It may be possible to run
both express and local services alternately to provide a service which is suitable
to an areas overall need’s;
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SECTION 5
n
n
If business travellers are to consider buses a viable option operators must take
radical steps to overcome the negative image of travel by this means; and
Develop a dialogue with businesses, especially those at business parks to
ascertain needs and where partnership working can take place.
Local government should:
n
n
n
Ensure that public transport is accessible to the business traveller. Well-signed
systems, with tube-style maps that highlight landmarks are essential. Good
targeted information to business travellers at key interchange points is central
to increasing use and improving business confidence in the system;
Take steps to encourage walking and cycling for business use by providing
map information and possibly cycle pools at railways stations. People often
over-estimate the time it takes to walk and cycle to places, especially in urban
locations. The unfamiliar business traveller may well take a taxi for a journey that
could have been made on foot or by cycle. Once again good signage with
walking and cycling times rather than distances is needed supported by
information prior to the journey about options available; and
Work to improve the business travel planning process. They should ensure that
business travel plans adequately cover travel during the business day and do
not focus narrowly on the commute. Targets for local authorities should reflect
this change in emphasis. Local authorities currently concentrate on ‘big
business’ to secure quick wins for business travel planning causing SMEs to
unfairly lose out. There should be a re-orientation towards working with the
smaller organisations which are likely to be time and resource poor, but in need
of help (See: Transport for London’s www.anewwaytowork.co.uk).
5.1
Recommendations for future research
Business travel during the course of the business day is a little researched area,
especially beyond the telecommunications arena. However, it is encouraging to
see that it is now being given the attention it deserves with several government
initiatives and research projects focusing on the issue (e.g. National Business
Travel Network, Institute of Travel Management, WorkwiseUK and the Transport For
London A New Way to Work Campaign).
We hope this report has highlighted some important issues from an SME
standpoint. Further research into the following areas would be of significant use:
n A greater understanding of the use and prevalence of company cars through
joint work between the fleet industry and the Inland Revenue. Further research
on company car usage; expanding on the Royal Bank of Scotland model would
be of use especially for answering questions such as
n
What are people using their cars for (e.g. a place of work)?
n
What are the gender issues?
n Investigating how best to measure the value of time for business travel;
n The growth and specific business travel requirements of the ‘white van man’;
n An evaluation of Transport for London work with SMEs in London to consider
UK wide applications; and
n Research into the tax options available for influencing business travel.
National government should:
n
n
n
Develop a business travel planning system that incorporates SMEs, without
being an excessive administrative burden. Area-wide conglomerates of SMEs,
joining resources together for mutual benefit may be an appropriate solution;
Improve incentives for businesses to engage in the business travel planning
process. Local authorities currently have few ‘carrots’ with which to tempt
businesses; and
Leave local solutions to prevail in the short to medium term before imposing
strict legislation on the issue.
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SECTION 6 – REFERENCES
SECTION 5
SECTION 6
SECTION 6
Section 6 References
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SECTION 1
The British Chambers of Commerce
65 Petty France
London SW1H 9EU
RAC Foundation
89-91 Pall Mall
London SW1Y 5HS
Registered Charity No. 1002705
Telephone 0207 6545800
Facsimile 0207 6545819
www.chamberonline.co.uk
Telephone 020 7747 3445
www.racfoundation.org
www.ukdrivetime.com
http://racfoundation.wordpress.com/
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