Better checks on taxpayer funded credit cards

June 01, 2012 12:18 PM

The Ministry of Defence spend more money using Government Procurement Cards than any other Department - accounting for three-quarters of all use of the cards - according to a new report by the powerful House of Commons Public Accounts Committee. Are they using them to pay for necessary equipment or five star hotels and four course dinners? We just don’t know. Maybe the expenditure is legitimate, maybe it is deeply wasteful. The really incredible thing is that they don’t know either! The Committee were told that they only checked a sample of their transactions, perhaps as little as 5 per cent of the total.

GPCs were first introduced for convenience and there are now around 24,000 of them in circulation. They can be a more efficient way of paying everything from everyday office costs to MPs’ expenses. But the critical thing is that there needs to be scrutiny of the spending. The Public Accounts Committee warns that the controls currently applied are not strict enough to deter and prevent inappropriate use. It describes a one-off Cabinet Office investigation which found 99 cases of “inappropriate use" of the cards in Whitehall over three years. In 2011 we asked all Whitehall departments what they had spent on GPCs. In just one year Whitehall departments had racked up £25 million on these credit cards. Far too much of the money had gone on extravagances such as first-class flights, five-star hotels, exclusive restaurants and high-street shopping sprees.

At the moment, the people who are supposed to have their hands on the purse strings at the Department just don’t know if the money is being spent on something wasteful, like a five star hotel or some quality time at Hooters, or something really important, like a phone call to alert their base to the imminent threat of giant evil robots.



The answer isn’t to spend a fortune on more civil servants to check up on their colleagues. It is to publish the information transparently. That way journalists, campaigners and the public can keep an eye on how their money is being spent. Just knowing that the information will be published will encourage those using the cards to be a lot more cautious. Fortunately, it is very easy to combine GPCs with spending transparency, the Department just needs to publish their credit card bills. In some very special cases they might need to redact small amounts of information, for example when it affects security or genuinely personal data, but it will be cheaper and more effective if they go easy on the black marker pen.

Today’s PAC report is a positive step along the way to ending the abuse of taxpayer funded credit cards. Now we need to see all the Departments, local authorities and quangos that use them publish the simple data that can really make GPCs work for taxpayers.The Ministry of Defence spend more money using Government Procurement Cards than any other Department - accounting for three-quarters of all use of the cards - according to a new report by the powerful House of Commons Public Accounts Committee. Are they using them to pay for necessary equipment or five star hotels and four course dinners? We just don’t know. Maybe the expenditure is legitimate, maybe it is deeply wasteful. The really incredible thing is that they don’t know either! The Committee were told that they only checked a sample of their transactions, perhaps as little as 5 per cent of the total.

GPCs were first introduced for convenience and there are now around 24,000 of them in circulation. They can be a more efficient way of paying everything from everyday office costs to MPs’ expenses. But the critical thing is that there needs to be scrutiny of the spending. The Public Accounts Committee warns that the controls currently applied are not strict enough to deter and prevent inappropriate use. It describes a one-off Cabinet Office investigation which found 99 cases of “inappropriate use" of the cards in Whitehall over three years. In 2011 we asked all Whitehall departments what they had spent on GPCs. In just one year Whitehall departments had racked up £25 million on these credit cards. Far too much of the money had gone on extravagances such as first-class flights, five-star hotels, exclusive restaurants and high-street shopping sprees.

At the moment, the people who are supposed to have their hands on the purse strings at the Department just don’t know if the money is being spent on something wasteful, like a five star hotel or some quality time at Hooters, or something really important, like a phone call to alert their base to the imminent threat of giant evil robots.



The answer isn’t to spend a fortune on more civil servants to check up on their colleagues. It is to publish the information transparently. That way journalists, campaigners and the public can keep an eye on how their money is being spent. Just knowing that the information will be published will encourage those using the cards to be a lot more cautious. Fortunately, it is very easy to combine GPCs with spending transparency, the Department just needs to publish their credit card bills. In some very special cases they might need to redact small amounts of information, for example when it affects security or genuinely personal data, but it will be cheaper and more effective if they go easy on the black marker pen.

Today’s PAC report is a positive step along the way to ending the abuse of taxpayer funded credit cards. Now we need to see all the Departments, local authorities and quangos that use them publish the simple data that can really make GPCs work for taxpayers.

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