Card scheme 'on course' for £70m savings target

14 December 2000
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14 December 2000 | Elizabeth Bellamy

The government procurement card (GPC) scheme has made steady progress over the past year, but there is still a long way to go to achieve annual savings of £70 million by 2002, according to a new report.

Consultancy KPMG's third annual review of the scheme, GPC - The Future, found that £9.6 million had been saved in the three years since it was started - a rise of 295 per cent on last year's £3.7 million.

"The programme has clearly gained momentum," said the report, although it pointed out that savings were only 14 per cent of the target of £70 million the Treasury wants the GPC to save annually by 2002.

Jane Gibbs, head of e-commerce at the Office of Government Commerce, defended the results. "The card's growth is exponential and it will take us a couple of years to hit the target," she told SM. Gibbs was "more concerned with making sure people were happy with the system".

David Harbey, senior manager of commercial products at Visa purchasing, said he had "always known it would take time" to reach the £70 million target, and that progress was "broadly in line with where we expected it to be". Visa has a five-year contract to run the scheme.

The number of departments and agencies adopting the scheme this year jumped from 44 to 112, beating the original target of 100, said Gibbs.

The number of cardholders has nearly doubled from 6,347 to 11,984, and the number of transactions processed was up by almost a third to 342,616.

The total cost of transactions billed from October 1999 to September this year was £42.7 million. This was an increase from 1999, when £13.4 million was spent using the card, and 1998, when less than £2 million-worth of goods were bought via the GPC. Sources say the government should hit a target of £55 million by the end of this month.

The card was introduced in a bid to reduce spending on low-value, high-volume goods and it is hoped £300 million of spending will be channelled through the card. It is part of an Office of Government Commerce initiative to carry out 90 per cent of high-volume, low-value transactions electronically by April next year.

SMdec2000

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