NEW COST TABLES --Th
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in decimal and sterling
THE 1970 edition of the COMMERCIAL MOTOR Tables of Operating Costs will be published next week, and will be available from the Sundry Sales Department, IPC Business Press (S. and D.) Ltd., 40 Bowling Green Lane, London EC1 price 10s, (50p.) net, or lls. (55p.) postage paid.
The appearance of this 54th edition constitutes a milestone in the long history of this publication. First published by CM in 1911 to meet the growing needs of pioneer operators for advice on costing, the Tables have been revised virtually annually ever since, except for the war years. Continuity has been facilitated by there being only two compilers of the Tables throughout the span of 60 years from 1911 to 1970.
Maintaining continuity, however, has not meant stagnation. In addition to keeping pace with changes in prices and basic costs the range and types of vehicles included in the Tables have been adjusted when necessary to meet modern needs.
This has been a continuing process and the new edition constitutes a further link in that process.
But in another respect this new edition is unique and is likely to remain so. This is because for the first time tables showing the costs of operating a wide range of goods and passenger vehicles are now available in both the existing (£ s d) currency and in the new decimal(p) currency.
Decimal currency officially becomes effective on February 15 1971—D Day. In compiling this new edition, however, it was anticipated that for a period both before and after the changeover date road transport operators of both goods and passenger vehicles would need to deal in both currencies. They would accordingly need cost tables calculated in both currencies.
For example, before February 15 1971 forward estimates and quotations may need to be made in the new decimal currency. Similarly, after that •date accounts for transport services performed before February 15 1971 may need calculating or checking in what would then be the "old" currency.
So as in 1911, CM continues to anticipate operators' needs by publishing this new edition of the Tables in both currencies.
It is emphasized that for this changeover period the basic calculations have been made in the existing currency. The actual tables of costs have then been compiled in the same manner and pattern as previous years—again in the existing currency. The amounts shown in these tables have then been converted into the equivalent amounts in decimal currency.
Decimal currency, like our present money system, will still be based on the pound sterling. But the pound will be divided into 100 new pence instead of 20 shillings of 12 pence (or 240 pence to the pound) as at present.
Now we use three units to measure money values with three corresponding abbreviations: the pound (£), the shilling (s.), and the penny (d.). Under the new decimal currency system we should use only two: the same pound (£) and the new penny (P.).
Simplicity In applying these new amounts when converting the cost tables compiled on the basis of the existing currency, it was decided to continue to limit the accuracy of the calculations to two decimal places of pence despite the fact that the new penny (p.) will be worth 2.4 old pennies (d.). Therefore because of the resulting rounding off that became necessary some slight differences can arise when comparing otherwise similar sections of the Tables.
This decision was taken in continuance of the underlying policy on which the publication of the CM Tables of Operating Costs is based. This is that its prime purpose is to help the operators of small fleets of vehicles and newcomers to road transport who have little or no prior knowledge of vehicle costing. It is consequently a first priority that the Tables should at all times be kept as simple as possible. Therefore a changeover to a "simpler" decimal currency was certainly not considered the occasion to justify added complication, eg taking pence calculations to three decimal places to compensate for the increased value of the new penny as compared with the old.
In addition to providing an invaluable starting point in vehicle costing, successive editions of the Tables provide useful yardsticks as to the current rate of change for both new and experienced operators.
For example, the cost of operating a 7-ton truck 600 miles a week as shown in the extract of the new 1970 edition of the Tables reproduced here is (in existing currency) 27.97d. a mile or £69 19s. a week. Only a year ago the comparable figures were 23.96d. a mile or £59 18s. a week, an increase of over 16 per cent.
The corresponding comparison of the 10 items which make up the total operating cost are as follows (1969 figures in brackets): Standing Costs per week-52s. 6d. (51s. 6d.), wages 476s. 3d. (317s. 9d.), rent and rates 36s. 6d. (34s. Od.), insurance 64s. 9d. (59s. 9d.), interest 81s. 9d. (77s. 9d.), total 711s. 3d. (540s. 9d.).
Running costs per mile (at 600 miles a week)—Fuel 4.82d. (4.82d.), lubricants 0.32d. (0.32d.), tyres 149d. (1.62d.), maintenance 4.45ci. (4.04d.), depreciation 2.46d. (2.34d.), total 13.74d. (13.14d.).
Of these 10 items of operating costs the major increase is in the amount allowed for wages. As in previous years the amount shown in the Tables for wages is the total payable by the employer, inclusive of National Insurance and other contributions, for a basic 40-hour week, adjusted to allow for the equivalent of 45 working weeks a year.
• Because the actual wage payable to the driver can vary substantially from the basic amount, a ready reckoner has been included in each edition of the Tables since 1958. This facilitates calculation of additional payments in individual cases so that they can be consolidated into the total operating costs.
But in addition this year it has been necessary to increase substantially this basic amount in line with recent agreements. Even so, users of the Tables will find it necessary to make further adjustments to serve their individual purposes.
Examples of the new tables in sterling and decimal form are published overleaf Further examples will be published in CM next week