More scope to cut cost of Government's vehicle rental bill

The retail entrepreneur was particularly critical of the discrepancy in the cost of car hire, and Neil McCrossan, chief executive of Nexus, said there was even more that could be done to make government cheaper.

"Our first-hand experience has identified a serious lack of execution on the ground when it comes to managing vehicle rental and mileage allowances. So I am not at all surprised he found a 92 difference in prices paid for daily rental – if I am surprised it's that the discrepancy wasn't bigger.

"It's not only the different costs paid for the same rental that is the issue, it's a matter of how rental is managed. There are government rental contracts where the administrative overhead could be cut by, we estimate, 75 per cent with no loss of efficiency just by using systems and expertise that are readily available.

"Across government, hundreds of millions of pounds are spent every year on vehicle rental and the payment of private mileage allowances to staff using their own cars on government business. However, there is no overall control and co-ordination of this spend.

"It seems that every arm of local and national government, all the emergency services and the military each run their own tender exercises. A major commercial operation would not allow all its individual departments to tender for the same service separately, so why does government?"

Mr McCrossan, whose firm is based in Leeds, said there should be a single procurement exercise which could be carried out through a portal available to government contractors.

"I already thought that what we were seeing in vehicle rental was likely to be true in other areas of government procurement. It's both encouraging – and disappointing – to see that Sir Philip's report actually backs up our experience."

The Arcadia Group billionaire said the Government had consistently failed to make the most of its scale, buying power and credit rating, particularly in IT, travel, print and office supplies, and the management of the Government's property portfolio.