Cliff Notes – Government credit cards used as personal piggy banks
- A cabinet minister has revealed that thousands of government procurement cards are being cancelled due to unverified expenditures, with officials required to reapply and justify their need for these cards.
- The number of government credit cards has increased significantly, quadrupling over the past four to five years, with spending on these cards reaching over £600 million in the last financial year.
- In an effort to reduce wasteful spending, the government plans to lower the expenditure limit on these cards from £2,500 to £500, and many cards will be frozen, except for specific exemptions like those for diplomatic staff in conflict zones.
Government credit cards used as personal piggy banks
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 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.
Freeze almost all the 20,000 cards
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%.
That amounts to a whopping 600 million pounds per year that government officials are using on expenses.
WTX News analyst
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.
That again to lead to abuses.
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.