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Spending Review: Public sector warned off knee-jerk reactions to budget constraints

By / 8 years ago / Latest News / No Comments

Stuart Walker, brand director of Automotive Leasing, LeasePlan's specialist public sector fleet service provider, warned that decisions that show immediate savings can often quickly lead to much higher ongoing costs.

He commented: 'With George Osborne's Spending Review announcement, the public sector faces the harsh reality of budget constraints for years to come and it must make some very difficult decisions about where the axe will fall. Fleet will inevitably be a tempting target but decision-makers should not be tempted to reach for the low-hanging fruit. Ill-considered cuts will not lead to long term savings and may indeed cause higher costs in the long run.

'Cutting fleet may look good on paper, but the need for employees to travel will not disappear, and there is a risk that leasing savings could be cancelled out by increasing expense claims for mileage or vehicle rental.

'The private sector is already leading the way and offers a blueprint for the public sector. An estimated 60% of private sector fleets with over 250 vehicles are outsourced, yet for similar sized public sector organisations, the figure is closer to 25%. By outsourcing, these organisations not only cut costs, but save administrative time, reduce carbon emissions and improve employee health & safety.'

He added: 'With a long-term vision, however, the Spending Review presents an opportunity to reform fleet management, increase efficiency and achieve significant cost savings. 

'A well-considered fleet strategy can improve both transport efficiency and achieve savings.'

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