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WHILE I was away in Cornwall we had the spending review announced by the Chancellor, George Osborne.

I’m truly not up to speed on this, although I do understand that the public sector is facing severe cuts. And while there will be true economic pain suffered by those suffering the sharp edge of the cutting axe, is it all bad?

After all, business has been through this pain already and has come out the other side fitter and leaner – in other words, there’s no reason why it follows that cutting public sector funding means reduced service. It should mean the opposite – at less cost to us, the tax payer.

I must admit, I tend to side with John Lewis, the chief executive of the British Vehicle Rental and Leasing Association (BVRLA), who commented: “The Department for Transport and other government departments have announced major budget cuts. But thousands of businesses up and down the country have had to take similar measures in recent months and years. Most of them have managed to maintain a high level of service to their customers. Let’s hope us taxpayers get a similar deal.”

Certainly public sector leasing specialists, Automotive Leasing, has been quick out of the blocks in presenting a white paper for public sector transport savings entitled (in typical public sector argot) Streamlining for the new Realities.

One area the paper explores is for the public sector to understand and learn from the experience and changes made by the private sector, which has made significant changes to transport policies to make tangible savings.

It suggests typical cost reductions – which I’m sure any SME business will testify actually work – in the following areas:

  • Procurement of vehicles
  • Procurement of vehicle-related services
  • Improving fuel performance/management
  • Realising appropriate residual values on disposal
  • Tighter control of private use

“As budget necessities force the public sector to rethink the status quo, they have an opportunity not only to cut costs, but to implement a more efficient form of fleet management,” reckons Stuart Walker, brand director, Automotive Leasing. Quite right.

One area of travel that’s going to get more expensive, clearly, is rail travel – more’s the pity. Expect higher fares thanks to the raising of the annual increase cap from RPI +1% to RPI +3%.

But for me the key wasted opportunity is the amount of money being offered for electric cars – £400m to promote the uptake of ultra-low carbon vehicle technologies.

While electric cars can drive down CO2 emissions to zero from the tailpipe, what about a grant for electric vans?

Sorry, electric cars just don’t cut it for small businesses at the moment; but electric vans really can work, because of their return to base operational structure: charge, delivery route, return to base for recharging. Given that so many vans operate in urban areas, electric vans would really help clean up the atmosphere.

Or is the government paying lip-service to the electric car makers (let’s face it, Nissan is a key car maker in Sunderland) knowing take up will be low, and so keeping the money in the bank?

Business Car Manager Editor’s Blog on the spending review

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Ralph Morton is an award-winning journalist and editor of Business Motoring, as well as Editorial DIrector of Business Car Manager Ltd. Ralph writes extensively about the car and van leasing industry as well as wider fleet and company car issues. A former editor of What Car?, Ralph is a vastly experienced writer and editor and has been writing about the automotive sector for over 35 years.

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