Tough Talk on Britain's Spending Cuts, But Big Challenges Ahead

On Monday, George Osborne, the Chancellor of Britain’s new coalition government, announced the results of a comprehensive spending review designed to identify cost savings across the public sector that will help the country to reduce its £156 billion deficit. Central to the controversial cuts that are planned is a £1.15bn reduction in ‘discretionary areas’ such as consultancy and, interestingly for Concur, travel costs. Public servants will be stopped from traveling first class and ministers will no longer enjoy the benefits of a personal chauffeured car. Walking, public transport and car pools are the new order.

It’s certainly a welcome break from the MPs expense scandal that rocked Westminster during the last parliament, where we saw firsthand the negative effects of a lack of clear T&E policy. Now, although the policy is becoming clearer, the reality of the reduced travel budgets announced this week will definitely be difficult for organizations to swallow. One thing is for sure, utilizing resources to the maximum will be absolutely integral to keeping to these strict new parameters. T&E management has an important role to play.

Getting a better handle on T&E spend, as I explained last year on CNBC during the MPs expenses crisis, is absolutely essential for any organization looking to squeeze the most out of its travel budget. According to analyst house Aberdeen Group, a staggering 52% of companies cite a lack of visibility into this kind of data as one of their top challenges. Without a transparent system in place that accurately shows the full spectrum of travel spend in near real-time, the idea that the public sector can adapt to these kinds of cuts is, speaking frankly, difficult to believe.

From speeches throughout the election campaign and the first measures introduced by the coalition government, it is clear that both sides of the Houses of Parliament understand there is a lot of political capital to be gained from a better expense management system. It remains to be seen however whether or not the appropriate solutions will be adopted and properly implemented across the public sector to ensure this becomes a reality.

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