The Telegraph goes after councils and procurement cards again

I’m getting increasingly annoyed with the reporting in certain newspapers of public sector Procurement Card expenditure. It’s the worst sort of sensationalist journalism, with no depth to it, no consideration of  what the issues really are, but simply playing to the public’s easily roused (and understandable)  indignation about waste of public money.  It also, as night follows day, leads inevitably to an Eric Pickles outburst, which... no.  Let’s not go there.

You expect it of the Mail – let’s face it, they can get worked up over a square centimetre of cellulite on an actress’s thighs – but the Telegraph are also applying the same standards, which is disappointing for a newspaper that has pretensions of seriousness. Their report on Saturday was a classic –

Councils spend tens of millions on taxpayer-funded credit cards.... Despite being ordered to cut spending by almost 30 per cent, town hall chiefs have continued to lavish hundreds of thousands of pounds on dinners at Michelin-starred restaurants, leisure trips and expensive gifts including iPads and video games while slashing jobs and scrapping front-line services.

The tactic is to merely list what the suppliers who are being used with the Card, or the items bought, as if that in itself is evidence of waste or even fraud. So the fact that John Lewis is a supplier is somehow bad? There is no analysis of whether the purchase was legitimate – actually when something is explained, it doesn’t sound unreasonable.  £500 with Tiffany’s sounds a bit dodgy till you read that it was a long-service gift for a council employee. Now we could have a debate about whether councils should award long service gifts, but given every private firm I’ve worked for do it, it doesn’t seem unreasonable.

A far better investigation would be to look at the policies that sit behind this.  Of course Card expenditure should have proper sign off and approval procedures, and there should be clear guidelines in terms of Card use.  A travel and subsistence policy should be in place – I personally don’t think execs and councillors should be travelling first-class or staying in 5 star hotels.  So the scandal would be if the right governance around expenditure is not in place. But blaming Cards, listing where purchases were made and then jumping up and down about that is lazy, illogical and ridiculous. Money can be ‘wasted’ just as well through petty cash, traditional expense claims or indeed purchase orders.

The cost of a Card transaction, as all procurement people know, is far less than a full req to cheque process. Used properly, the management information obtainable from a Card programme can be at least as useful and complete as you’re likely to get from a conventional PO system. Cards are a useful option within the procurement portfolio for most organisations.

My fear is that all this nonsense will lead to a knee-jerk reaction which will cost us money in the long-term. I hope the Telegraph consider that next time they report on this issue, but don’t hold your breath...

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Voices (2)

  1. Peter H. O'Neil:

    Peter well said! While not as developed as in the UK, Purchasing Cards in Canada (where I am) & the US often face these same type of media stories that you outline. Using FOI tactics, it is an easy story to combine ‘Government Credit Cards’ with any vendor or dollar amount and call it reckless. Zero context is given, like program cost savings, portion of overall spend on cards versus non-cards, improved cash flow mangement or Policy intent. Perhaps these could have been given if the newpaper had called for a comment?

  2. Matt:

    Great article Peter, and not forgetting the council staff time it takes to pull together all this information for all transactions for the last 6 years etc. I agree with the principle of Freedom of Information (FOI) requests but they do cost a lot of staff time in answering.

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