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Carlson Wagonlit Travel told BTN Friday that a United Kingdom government target set this week of £100 million annual savings on business travel is "achievable" and
that the public sector has already reduced its spend by 20 percent this year.
Meanwhile, another travel expert said the £81 billion cuts announced in the
government's Spending Review on Wednesday may trigger a renewed downturn in
private sector travel in the U.K.
The Spending Review document published by the U.K. Treasury
made two direct references to business travel. One said Prime Minister David
Cameron will cut his own spending by 25 percent, in part by switching much of
his air travel from private charters to scheduled flights. More importantly,
the review stated the intention to "implement new standard guidance on
Government travel policies, bringing them in line with industry best practice,
to save £100 million a year."
Nigel Turner, director of program management for the U.K.
and Ireland for CWT, which has one of the largest marketshares in the U.K.
public sector among travel management companies, said travel spend had already
been slashed in anticipation of the review.
"For the last six to nine months, government
departments have been making cuts to travel budgets and looking for ways to buy
more efficiently," said Turner. "First-class rail travel has been
heavily discouraged since earlier this year, and some departments have put a
freeze on travel to external events. We have seen a reduction of 20 percent by
government customers in 2010."
In spite of the measures already taken, Turner believes the
public sector could achieve much more. "£100 million is an achievable
target," he said. "There is more that can be done in terms of compliance
and consolidation. We feel they will try to consolidate their suppliers
At present, there is only limited consolidation of travel
suppliers within the public sector. A procurement arm of the government called
Buying Solutions has created frameworks for various categories of suppliers and
intermediaries, such as TMCs and card providers, which enable buyers to select
from a shortlist of vendors. However, there is no compulsion to use framework
suppliers. That may change, for central government departments at least,
following the formation of the Cabinet Office-led Efficiency and Reform Group
in May 2010, which has subsequently announced travel as a procurement priority.
Turner said the group is likely to insist on fewer TMCs and other suppliers
Turner said a dip in CWT's public sector business this year
has been compensated by an improvement in private sector revenue, reversing the
trend of 2009.
Jon Reeve, director of trade relations for the corporate
rail booking tool provider Evolvi, agreed, but warned the situation could
change. "If government retrenchment means not buying goods from the
private sector, that could lead to a drop in private sector travel, which
currently is buoyant," he said.
Reeve also warned that rail fares are likely to jump sharply
in 2012 as part of a new pricing formula for train operating companies
announced in the review.