Espoo keeps executives’ car benefits despite criticism and €1.7m cost

The city of Espoo will continue offering company cars to senior managers, with leasing costs expected to exceed €1.7 million over a four-year contract, Yle reports.

Espoo plans to introduce a total-pay model in the first half of next year. Under the new system, the taxable value of any car benefit will be included in an employee’s total salary rather than added on top of their cash pay. The city says this will make the pay model more transparent and keep its overall costs stable.

The city currently has 30 company cars. Their lease payments total about €35,350 a month, or more than €424,200 a year. The city says the procurement, which includes a framework agreement worth about €4 million, does not represent a new additional expense or mean it plans to increase the number of car benefits. The agreement sets the terms under which vehicles can be ordered.

At a meeting on Monday, the Espoo City Board upheld the decision to procure vehicle maintenance and leasing services. Board chair Mervi Katainen used her right to bring the matter before the board for consideration.

The three largest political groups on Espoo’s city council have criticised the costly cars. The city is laying off 80 employees for financial reasons, and the group leaders say executive car benefits should also be reviewed as the city seeks savings.

Espoo says senior managers have had company cars since 2008. Employees eligible for the benefit can use a leased car paid for by the city.