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A healthy operation
Business Travel World – March 2007

The Department of Health's travel budget is a tiny part of the Treasury's health spend, but that doesn't mean no one's watching, says Mark Smulian

Keeping the nation healthy makes demands on the skills of everyone from brain surgeons to hospital porters and, less obviously, travel managers.

With the media full of stories about eye-watering deficits in the primary care trusts that make up the National Health Service, every little helps.

The Department of Health, which is ultimately responsible for the NHS, spends nearly 7m a year on travel, almost all of it domestic and on rail.

That figure includes the standalone agencies that deliver some of the department's responsibilities and some, but not all, of the local trusts that act as the NHS's front line.

Pressure from the Treasury on all government departments to keep their spending under control means the DoH travel budget is under scrutiny like any other, which is why FCm is trying to squeeze savings out of the train operators on behalf of its client.

FCm Travel Solutions won the DoH account three years ago from Carlson Wagonlit Travel, many of whose staff transferred over to keep some continuity of knowledge about the department's needs.

The account's business manager is Fraser Thomson, who has worked in travel since he left school 14 years ago, the last eight in business travel, joining FCm from Uniglobe in 2005.

Thomson says: "DoH staff are civil servants and our main task is to understand their market.

"Our staff work alongside the department day in and day out so have a better understanding of its requirements than if it was just one part of other work.

"They get a better overall picture and that is fed back to the department so each knows what the other is doing."

The DoH uses Expotel for its hotel bookings and FCm's work solely concerns transport - some 90% of it rail, although there is the occasional domestic flight or overseas trip to handle.

FCm's main project with the department is the introduction of online rail booking. This will allow users to check and compare rail fares and make bookings, although these will be routed through FCm's link to the Evolvi rail booking service.

"It enables the operations team in one fell swoop to look at every fare, and get a fare that might be cheaper for an earlier or later train," says Thomson. Indeed, the process of implementing rail online has led in itself to a change in the way the department handles its train bookings, which has already started to show savings.

"When we were talking to them about implementing rail online they needed a business case, they needed to know what savings could be made," says Thomson.

"We tested what savings were available on the five main routes that they use most often and had a look at what changed if you went for the cheapest in class for first class passengers, or cheapest on day in any class.

"It turned out that there could be a lot of cheaper tickets by changing times."

Some departmental staff are entitled to first class travel, whether because of seniority or because they are travelling a long distance and need to work. "The department said it would be too big a jump to abolish first class travel," says Thomson.

What it did do was to encourage staff to think both in terms of mixing single tickets and about how 'fixed' their journey times really were.

Thomson says: "When the train operators changed the fare structure to offer single tickets it was a big change and I'm not sure business travel people have fully taken on board that it can be cheaper than a standard open return."

Now staff are encouraged to, for example, specify that they want a single to London on a train that leaves Leeds at 8am, but they can flexible about their return time, with a standard open single being sufficient.

"You can say to someone 'you wanted the 8am train from Leeds to London, but the 8.15 is a bit cheaper and the 8.30 is a lot cheaper and still in your timeframe'," says Thomson. "There is a certain guilt factor there."

Since this new policy was implemented last July there has been an increase in the number of train seats booked by FCm, but the DoH's spend has fallen.

Economies of scale are more problematic. Although the DoH uses certain routes heavily, its 7m budget is split between numerous train operators and the main benefit of it being a large customer for rail has been what Thomson calls "soft rewards" for frequent users, such as discounts, priority seating and upgrades.

Exploiting economies of scale with train operators is possible but not straightforward. A Virgin Trains spokeswoman says: "We do have some corporate accounts but we need to discuss each case.

"A travel management company might come to us saying it has a huge spend on rail and then it turns out only a few thousand pounds is actually spent on our trains."

Savings made, or potential savings, are reported to the department at a monthly meeting with FCm, where ideas are exchanged and decisions are made on whether any changes are needed to the service provided.

The department's travel budget is based on the previous year's spend, which should mean that the savings so far secured by FCm will become locked into the process.

FCm books relatively few airline seats for the DoH, but will use budget airlines where they offer the lowest fare or the only service on the route concerned.

This applies even to ministers, who may have to y at short notice on government business, which FCm is obliged to keep confidential. "We can sometimes be asked to book a flight, and then find out why when we see a minister on television visiting a hospital," Thomson says.

FCm Travel Solutions

FCm Travel Solutions, formerly Britannic Travel, is the specialist business travel arm of the Australian owned Flight Centre company.

It offers airline, hotel and car rental bookings in addition to the rail services used by the Department of Health, using its ability to tap into Flight Centre's links with providers.

FCm has 14 staff who work solely on DoH business, based either within departmental buildings in London and Leeds or in a team at Peterborough that deals with enquiries from the separate agencies within the department and from NHS trusts.

Two exceptions - the Medicine & Health Care Regulatory Agency and the Council for Healthcare Regulatory Excellence - are handled in London because that suits their needs.

Not all the trusts are part of FCm's deal with the department, though they can join if they choose to.

The Department of Health

The Department of Health's 7m spend on travel is a drop in the ocean of the health budget, which is more than 80bn for 2006-07.

The NHS employs some 1.3 million people, making it the largest employer in Europe.

Below the Department of Health is a structure of strategic health authorities, then primary care trusts that in turn oversee hospitals, general practitioners and dentists. There are also numerous specialist agencies.

Departmental administration, which includes the DoH's travel budget, is a more modest 300m.



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