More than 500 bike shops unite against Cycle to Work scheme changes

Cycle to Work has been a contentious issue for bike shops for some time, but when Cyclescheme updated its terms and stopped retail partners from charging additional fees, it felt like the final straw for many.

Now, the industry has united around the issue. More than 500 bike shops have signed up to the Association of Cycle Traders' (ACT) campaign to change the Cycle to Work scheme.

Last week, three members of the ACT, director Jonathan Harrison and independent retailers Mark James and Mike Rice, met with MPs to address the industry's concerns.

Harrison said they were not looking to present a solution, but rather to "highlight the challenges faced by independent retailers" and convey "their views on what needs to be changed".

Talking to the Cycling and Walking All-Party Parliamentary Group (APPG) co-chairs Fabian Hamilton MP and Selaine Saxby MP, Harrison said:

"The scheme no longer fits the purpose for which it was originally intended – to get people to cycle to work."

In part, that's because people do not commute in the same way since the pandemic, as Harrison explained:

"Since the pandemic working habits have fundamentally changed, with more people working remotely therefore the 'to work' requirement is increasingly difficult to meet for many people."

But there are many more reasons why retailers find the scheme not fit for purpose. First of all, there's the overwhelming complexity of it, which Harrison highlighted to the APPG:

"Typically, the employer pays for the voucher, the provider owns the bike, the worker hires the bike, the voucher is paid back via salary sacrifice and there is often a misinterpretation around ownership and many users never truly understand how the scheme actually works."

Read more: Everything you need to know about the Cycle to Work scheme

Then there's the grey area that comes at the end of the hire period.

"During the extended hire period, the bicycle was still owned by the provider, with some providers charging fees providing an additional source of income whilst others do not," Harrison explained. "Often these fees come as a surprise to the end user."

Finally, there is the matter of administration costs, most of which tend to fall on the individual retailers.

"In the current marketplace, many independent cycle retailers are reporting profits between 3% and 7% which is disproportionate when compared with the profitability of some of the providers," Harrison told the APPG.

"Very low margins in the cycle retailer sector and future increased costs with the rise in the UK minimum wage mean they can no longer absorb the charges levied by Cycle to Work providers."

He continued: "Fees need to be fair, transparent and consistent. The fees charged by different providers currently range from 4% to 15%, some schemes have a cap, others do not."

Harrison argued that manufacturers and distributors, who benefit from sales going through Cycle to Work schemes, should bear some of the administration cost.

Finally, he called for consistency and predictability:

"At the moment there are no universal terms and conditions that scheme providers must adhere to, which is proving detrimental to ACT members."

Despite the industry's pushback against Cycle to Work schemes, the ACT want to reform it, not remove it. Harrison highlighted the potential the scheme has for growing the industry and getting more people cycling:

"The ACT is calling for a collaboration of everyone in the cycle industry to work together to reform Cycle to Work as the priority growth strategy for the cycle trade and to increase cycling for all.”