As examples of procurement card spending – from the apparently profligate to the petty – emerge in the media and the clamour for full publication of card expenditure grows, Ben Willis asks whether a scandal is brewing

If the headlines are to be believed, civil servants are on the brink of an outrage akin to the MPs’ expenses furore of two years ago. Over recent weeks, a number of national newspapers have been invoking the scandal that brought an abrupt end to numerous parliamentary careers as they publish allegations that officials are apparently racking up millions of pounds in unjustifiable expenses on government “credit cards”.

On the face of it, the evidence against civil servants does not look good. Figures gathered by the Telegraph from 18 departments suggest officials have used the cards to pay for at least £25m-worth of goods and services – and the paper says many instances of spending are “questionable”, including the purchase of five-star hotel rooms, expensive restaurants and theatre tickets. While there are also plenty of examples of admirably thrifty spending (our graphics are based on a range of figures drawn from the published data), anonymous Whitehall sources quoted by the newspaper said the spending was “wasteful and profligate”, while the sense that there is something to hide has been amplified by some departments’ refusal to publish figures showing their card-based spending – so far only the Departments for Communities & Local Government and Work & Pensions, the Treasury and the Cabinet Office have made figures (partially) public.

But for some, the suggestion that the revelations are the tip of a bigger iceberg is going too far. “To say this is some sort of expenses scandal is absurd,” says Ken Cole, a director of public procurement consultancy SPS. “In an organisation the size of central government there may be some examples [of spending] that in the current economic situation were not particularly wise uses of resources. But these cards are not expense accounts for people to blow on a trip to Marbella for three weeks. There are controls attached to them.”

Although described in the press as “government credit cards”, the source of the controversy is not in fact a credit card, but the so-called Government Procurement Card (GPC). Introduced in 1997, the GPC was conceived as a form of electronic payment for local and central government officials to cover items not included in regular procurement contracts – travel, day-to-day goods and services, online items and so on.

When it was introduced, the scheme had many aims, but one of the overriding objectives was to save money by removing the bureaucratic costs of processing a paper invoice for a particular transaction; in this regard, the cards appear to have proved successful. The National Audit Office has calculated that over its lifetime the GPC has saved the public purse over £860m, equating to a saving of £28 per transaction.

In the context of the current outrage over the apparent misuse of GPCs, it’s important to note that they’re not simply for civil servants to use as they please. Most cards are tailored to individual users, often restricting usage to specific items or services – known as merchant categories – and limiting the value of payments per transaction or per month. Furthermore, every card leaves a clear audit trail, so departmental finance teams can monitor how cards are being used. According to a spokesman for Visa Europe, this trail should in itself act as a deterrent against abuse.

“If you ask the question about why should I use my GPC, the starting point is that you are totally accountable for everything you do,” the spokesman says. “You know that anybody who looks at the management information [for your card] will know who you are, who you’re buying from, how much, when and so on. So when you’re given that accountability, you ask yourself a lot of questions about whether you need to do this. You don’t want someone coming and tapping on your shoulder and asking why you spent that £200.”

The question, of course, is how closely the audit trail left by GPCs is monitored across government – and, therefore, whether every instance of abuse is being detected. This issue was raised in the government efficiency review conducted last year by the retail tycoon Sir Philip Green. In his report, Green said that procurement cards did not allow government “to control or monitor spend efficiently”, and that in general, central government allows expenditure of up to £1,000 on GPCs without monitoring. In future, Green said, all GPC transactions should require authorisation.

The Cabinet Office was approached for comment on the extent to which GPC usage is monitored across government compared to other forms of public expenditure, and whether it has plans to act on the Green report’s recommendations, but was unable to provide any answers. However, the Visa spokesman insists that the current systems for monitoring GPC expenditure should be adequate: “You have got here a very robust system that bears comparison with any other form of procurement, and enables government to monitor how money is being spent,” he says.

More immediately pressing for the government is the question of whether or not departments should publish detailed figures on their GPC spending. Earlier this month, the Cabinet Office’s position was that individual departments should decide whether or not to disclose information on GPC spending. Since then, there have been growing calls in the national press for full disclosure, and claims that departments’ continued silence is an indirect admission of guilt. But for some observers, by publishing the figures departments would be playing into the hands of those seeking to undermine the GPC. According to Colin Talbot, professor of public policy and management at Manchester Business School and a veteran Whitehall commentator, the problem with publishing raw data on GPC spending is that it doesn’t contextualise spending, giving newspapers further opportunities to decry apparent public sector waste.

“It would just feed the newspapers with more stories,” Talbot says. “With all of these things, you have to know the context in. There was a story a while back about the Audit Commission going to the races, but it turned out this race course had a conferencing facility attached to it, which they’d used for a meeting because it was the cheapest local venue. It’s very easy to come up with these stories that on the face of it sound like public sector profligacy, but when you go into it you discover were very sensible decisions.”

Instead, Talbot says, the government should appoint the National Audit Office to undertake a proper study of GPCs, evaluating how they’re being used and where problems are occurring. “There are bound to be some things that have gone wrong, and the only way you’re going to sensibly understand what’s working and what isn’t is to do a proper study,” he says.

Cole agrees that full disclosure would be of limited value, adding that publication might cost departments more than the value of any inappropriate GPC expenditure. However, he does believe the government should now act swiftly and decisively to prevent the story from dragging on: with the issue getting so much media attention, he argues, departments and councils are being bombarded by expensive and time-consuming Freedom of Information requests about their use of GPC cards.

“What the government should do now is a ‘quick and dirty’ independent audit of the way in which the cards are used and what controls are in place,” he says. “And that should be published with recommendations within next two months. It’s wasting a lot of people’s time now, and costing a lot of money.”

Written by Ben Willis