The government will freeze thousands of “credit cards” used by civil servants in a “crackdown on wasteful spending”.
The Cabinet Office will instruct departments and their agencies to this week freeze most of the roughly 20,000 government procurement cards currently in circulation, with the aim of cutting the numbers by “at least 50%”.
A minority of cards, those used for specific operational purposes such as by diplomatic staff working in unstable environments, will be exempt from the freeze, the Cabinet Office said.
The government procurement cards are used by officials to make low-value, one-off payments for goods or services that need to be purchased quickly.
Spending on the cards has quadrupled in four years, surpassing £600m in the last financial year across central departments and core agencies, according to the Cabinet Office.
Following the freeze, cardholders will be “forced to reapply and justify that they really need them – if they don’t the cards will be cancelled by the end of the month,” the Cabinet Office said.
Departments will be told to approve the minimum number of new cards possible, with the expectation that number of cards will be reduced by at least 50%.
Those who keep the cards will be banned from using them where there is either a departmental or cross-government procurement route. The Cabinet Office said these procurement routes deliver better value for money by procuring at scale for common goods and services, such as booking official travel, training, or office supplies.
The government will also introduce tighter new spending controls for hospitality, with the maximum spend on the cards slashed from £2,500 to £500, and any spend over £500 requiring director general approval.
Departments have also been asked to review spending with the cards by their officials and to take action where they identify examples of usage that is incompatible with guidance, including disciplinary action and rescinding cards.
Pat McFadden, the chancellor of the Duchy of Lancaster, 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.”
He said the “clampdown on government credit cards” will deliver savings that can be used to drive the government’s Plan for Change – the six milestones it is aiming to achieve by the end of this parliament.
Government-wide procurement card policy, published in 2020, says there are “many benefits” to using procurement cards, including “reducing procurement process times, operational efficiencies and supporting the government’s prompt payment initiative for small and medium enterprises, supporting and maintaining cash flow to suppliers”.
The Crown Commercial Service document says “increasing use of procurement cards can improve departments’ efficiency and accelerate payment to their suppliers while still ensuring robust controls”.