Business travel leaders have expressed concern about the government’s future travel management strategy.
Central government currently uses at least nine travel management companies (TMCs) to book travel and accommodation. In a bid to consolidate travel spend, this will be reduced to just two in 2012.
One TMC will be appointed to manage global travel, the other domestic.
Speaking anonymously to ABTN, a senior business travel figure said it was “ludicrous” to limit the number of TMCs to just two, given the government’s professed aim of supporting smaller businesses.
Another business travel leader, Mervyn Williamson, joint managing director of Statesman Travel, said the tender did not encourage smaller businesses to put themselves forward.
He said his TMC had not applied as it did not comply with the terms of the tender.
“The criteria that had to be met limited to a great extent the number of TMCs that would be eligible,” he said. “They weren’t set at levels that would make it an open playing field.”
Statesman has recently acquired Commodore Travel, but even after the merger, which will put the TMC in the top 10 UK TMCs, Williamson said they would not have been in a position to apply.
The tender was issued in April through the Government Procurement Service (GPS) (formerly Buying Solutions).
A spokeswoman for the GPS said: “The Central Government Travel Management Service is a new procurement that will deliver better value in travel services across Government.
“The scope for this travel management service is the booking of rail, air, ferry, hotels, conference facilities and other services online or via a call centre.”
All central government departments, including the Department of Health and the Ministry of Defence, will be mandated to use the new service.
“This approach will save taxpayers’ money,” said the GPS spokeswoman.
“This reduction in Travel Management Companies will drive efficiency and supply chain management to achieve better value and lower travel costs.”
Key aims of the government will be to increase the use of online booking tools to “reduce transactional costs and administrative burden” and to lower costs by creating contracts with suppliers based on committed volumes.
She added that central government also hoped to reduce its travel “through demand management”.
The successful agencies will be told in November, ready to start in the New Year.
American Express and Carlson Wagonlit have both confirmed they are taking part in the tender process.
Anthony Drury, American Express’ UK general manager, said the public sector was one of the “focus industry segments for 2012”.
Andrew Burnham, head of travel at accountancy firm Macintyre Hudson, said the government’s new travel strategy was indicative of a “root and branch review of how government buys in services”.
“I think there is a certain half of the coalition that is very keen to rattle the public civil service management structures and look to broaden and simplify the way in which consultancy and management services are bought by the government,” he said.
“It’s not just in business travel. It’s part of a broader review to try and drive out cost where possible by casting a fresh eye over how matters are organised by government, to ensure there is competition and clarity.”
According to Paul Tilstone, CEO of the Institute of Travel and Meetings, the GPS is following best practice by reducing the number of TMCs on its books to two.
“It is fairly sensible that in order to cut costs you’ve got to consolidate,” he said, “and if you’re going to consolidate you’re limited in choice.”