Latest news with #GPCs
The Independent
18-03-2025
- Business
- The Independent
What Labour's crackdown on government credit cards reveals about its approach to public spending
The dour Scotsman holding the title of chancellor of the Duchy of Lancaster and Cabinet Office minister, Pat McFadden, doesn't seem much of a space cowboy but he has in common with Elon Musk an apparent zeal to eliminate waste. Being more sensible and considerably less excitable than his (rough) US counterpart, McFadden has not yet egregiously breached the British constitution but he has summarily abolished almost all of the civil service 'credit cards', a distinctly Doge-like action. It's more than just a symbolic move… What's the problem? The immediate one is the sometimes seemingly wanton use of some 20,000 government procurement cards (GPCs) that enable officials to order relatively trivial items – ie not new aircraft carriers or reservoirs – without too much onerous invoicing and other paperwork in the digital age. Typically this means paying for ad hoc official hospitality, travel and office equipment. However, Labour in opposition discovered some expenditure that seemed questionable. This included: A £4,445 dinner in New York for the then prime minister, Boris Johnson, for himself and 24 of his staff About £1,500 on lunch and dinner for Liz Truss, as foreign secretary, in two upmarket restaurants in Jakarta Rishi Sunak, when chancellor, spending £3,000 on 13 photographs to brighten up the Treasury Buying DJ equipment, which raises the possibility that the karaoke kit that featured in the Partygate horror was paid for by the taxpayer Total spending on GPCs has quadrupled in the last few years to a non-trivial total of £600m. What's the answer? An immediate Muskian freeze on GPCs, a reduction in the item limit for hospitality from £2,500 to £500, and any spend more than £500 requiring director general (top civil servant) approval. Civil servants will also be banned from using cards where there is either a departmental or cross-government procurement route. McFadden would like to radically reduce the number of GPCs in circulation. Is McFadden 'the British Musk'? Joking apart, he and his colleagues in the Cabinet Office and Treasury are pursuing waste, inefficiency, and ineffectiveness across the British state, the most high-profile examples being the abolition of NHS England; the current review of social security long-term sickness and disability benefits; Yvette Cooper's attempts to get spending on migrant hotels down; and Angela Rayner's drive to reorganise local government. Regulators are being told to prioritise growth, and the government wants to rationalise agencies and quangos. The chancellor, Rachel Reeves, has actually created a new quango, the Office for Value for Money, to reassure the public about things, though the parliamentary public accounts committee has expressed scepticism about its role. The cuts in overseas aid are the nearest functional parallel to Doge, though, to be fair, British ministers don't argue that such transfers are corrupt and wasteful. Why does it matter? In the great scheme of things, this is 'sweating the small stuff' and doesn't make much difference to the big picture in a public spending total exceeding £1 trillion a year. However, McFadden and his colleagues recognise, if not fear, the damage that lurid stories about abuse do to the reputation of the state and trust in government. Tony Blair always used to say that the public didn't mind paying more in tax for public services provided they could be sure it wasn't being wasted, and, as they couldn't have such confidence, were therefore reluctant. The public's dismay at the £3bn a year that's been spent on migrant hotels is a prime example of how things can go wrong. Is Labour now the party of prudence? Funnily enough, the GPCs were introduced by the New Labour government in 1997, to reduce administrative costs, but things appear to have got out of control in the Conservative years. There will always be waste and inefficiency, even in the most cash-starved of organisations in the public or private sectors; but at least McFadden, Keir Starmer and Reeves seem to be genuinely appalled by it. Maybe one day they too will drift into the kind of bad habits parties develop after a prolonged time in power.
Sky News
18-03-2025
- Business
- Sky News
Mass crackdown launched on government credit cards as some expenses 'not justified'
Why you can trust Sky News Thousands of government credit cards are being cancelled because some of the expenditure is "not justified", a cabinet minister has said. Appearing on Sky News' Breakfast with Wilfred Frost, Pat McFadden was asked if the crackdown on government procurement cards (GPCs) was because civil servants are "fiddling their expenses". He said he would "not use that phrase", but added: "I don't think some of the lines of expenditure I've seen are justified." "This is public money - I think people need to take care with it," he said. "So the process now will be, if people want to have one of these cards, they're going to have to justify why they need it and reapply for it." It was announced last night that thousands of GPCs will be cancelled as part of a crackdown on wasteful spending in government. Under the plan, departments and their agencies have been instructed to freeze almost all the 20,000 cards in circulation in a bid to cut the number in use by at least 50%. Civil service cardholders will be forced to reapply and justify that they really need them. If they don't, their cards will be cancelled by the end of the month. Only a minority of cards will be exempt from the mass freeze, such as those used by diplomatic staff working in conflict zones. Rules to be tightened up Mr McFadden said the number of cards and the expenditure "has grown enormously", quadrupling "in the last four or five years". Figures show spending on the cards in the last financial year reached over £600m in central departments and core agencies - compared to £1.5m in 2020/2021. In some situations, such as Foreign Office staff in hostile environments, the cards are justified as "it's the most convenient way to account for small amounts of expenditure", Mr McFadden said. The limit on expenditure on the cards, which is currently £2,500, will come down to £500 - with anything above this requiring the approval of a senior civil servant, he added. The crackdown on GPCs is part of a wider drive to cut spending and waste across government, as the chancellor seeks to plug a gap in the public finances in next week's spring statement. 1:27 More cuts to come Rachel Reeves has lost £9.9bn of fiscal headroom (the amount she could increase spending or cut taxes without breaking her fiscal rules) since the October budget due to a poor economy and geopolitical events. Last week, it was announced NHS England will be abolished because there is too much duplication with the work the Department of Health and Social Care is doing. Health Secretary Wes Streeting has since indicated he will look to scrap other health-related bodies, while integrated care boards have been asked to cut their budget by half.
The Guardian
17-03-2025
- Business
- The Guardian
Thousands of Whitehall ‘credit cards' to be suspended in spending crackdown
Thousands of Whitehall officials will have their government 'credit cards' suspended this week in Labour's latest crackdown on what it regards as wasteful spending in the civil service. Pat McFadden, the Cabinet Office minister, said on Monday he would freeze almost all of the 20,000 government procurement cards (GPCs) within days with a view to permanently cancelling at least half of them. It is part of a push to reduce spending on the civil service that has already led to the abolition of organisations such as the Payment Systems Regulator and NHS England, at a cost of about 10,000 jobs. 'We must ensure taxpayers' money is spent on improving the lives of working people,' McFadden said. 'It's not right that hundreds of millions of pounds are spent on government credit cards each year, without high levels of scrutiny or challenge. Only officials for whom it is absolutely essential should have a card.' Officials use GPCs to buy relatively small items such as flights, office furniture or drinks for official functions. They were introduced by the last Labour government in 1997 as a way to reduce the bureaucracy required to run Whitehall departments. Spending on them has more than quadrupled over the last five years to £676m, with Labour sources pointing to spending on items such as shoes and DJ equipment as potentially wasteful. While in opposition, Labour conducted an investigation into all spending on GPCs, which found examples of high spending by senior officials and ministers. In 2021, for instance, the then prime minister Boris Johnson used a government card to pay for a £4,445 dinner in New York for himself and 24 of his staff. Later that year Liz Truss, as foreign secretary, spent nearly £1,500 on lunch and dinner during a visit to Indonesia in two of Jakarta's most exclusive restaurants. Also in 2021, the Treasury under Rishi Sunak spent more than £3,000 buying 13 photographs from the Tate to hang in its Whitehall building, despite already having access to the government art collection. The Foreign Office is one of the heaviest users of GPCs, in part because officials have to organise regular functions to entertain foreign dignitaries. But as well as spending on items such as flights and catering, officials also spent nearly £2,500 at a shoe shop called Shoe Crush in Barbados. Under new guidelines being rolled out by McFadden, the maximum spend for hospitality will be cut from £2,500 to £500, with any spending over £500 requiring approval from a director general. Civil servants will be banned from using cards to buy things such as travel or office supplies, which could be bought more cheaply in bulk at a departmental or cross-departmental level. Most of the 20,000 cards that have been issued will now be frozen, with exemptions for a small number of cases such as diplomatic staff in unstable locations. Cardholders will then be forced to reapply for their cards, and if unsuccessful will lose access to them by the end of the month. McFadden has also asked departments to identify any items of spending that breach government guidelines and discipline the individuals in question. Keir Starmer is spearheading a wider shake-up of Whitehall. As well as cuts to quasi-non-governmental organisations, the prime minister is urging departments to make greater use of technology such as artificial intelligence tools to reduce spending and streamline decision-making. Some experts have warned that rather than making government more efficient, the changes to how Whitehall works could make it harder for civil servants to deliver the government's main priorities such as cutting NHS waiting lists.
