Government doubles card spending to £305 million

9 June 2004
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10 June 2004 | Geraint John

Expenditure on the Government Procurement Card (GPC) doubled last year and efficiency savings of £50 million were made, according to its annual report.

A total of £304.6 million was spent by more than 46,000 card holders across the UK public sector. And 65 new public bodies went live with the GPC in 2003, taking the total number to 277 - a 31 per cent increase.

Office supplies were the most purchased item, followed by temporary labour.

The report, Delivering Efficiency Savings Across the Public Sector, by accountancy firm KPMG, concluded that with almost 1.8 million transactions, and an estimated saving of £28 per transaction, total "process and efficiency" savings amounted to £49.7 million.

This money could be diverted into front-line services as part of the government's public-spending agenda, it suggested.

Sarah Allen, a director at KPMG and author of the report, said use of the card freed up staff time to concentrate on more valuable work. "If you are paid to run a school, you can do that rather than chasing paper."

Jim Parkinson, head of payment cards at OGCbuying.solutions, which runs the GPC programme, defended the £28 figure, saying it had been endorsed by the National Audit Office and was at the lower end of the savings range.

But Peter Parry, director of Sterling Consulting Group and a purchasing card expert, said transaction savings tended to be "ephemeral".

"Unless staff are either laid off or redeployed, no financial savings are actually made. And organisations have generally not done this very well."

The GPC scheme was launched in 1997 for central government, but in February last year a new five-year contract with Visa extended the agreement to local councils, NHS trusts, the emergency services and educational institutions.

By 2008, the OGC wants a total of £4.5 billion to have been put through the GPC.

SMjun2004

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