HISTORIC PRESS RELEASE : Andrew Smith calls for increased use of electronic systems in pursuit of lower procurement costs [November 2000]

The press release issued by HM Treasury on 28 November 2000.

Better use of modern payment systems will increase value for money, Andrew Smith, Chief Secretary to the Treasury said today.

His comments accompanied the publication of the third annual report of the operation of the Government Procurement Card run by Visa International EU.

The systems would include increased use of purchase cards, automatic credit transfer and consolidated billing in the move to make Government more effective in its business dealings.

Andrew Smith said:

The need for the public sector to adapt to modern and efficient methods of payment especially for low value transactions has never been greater. Not only would they provide efficiency savings and make government easier to do business with but above all demonstrates that government is truly modernising.

Making more effective use of the Government Procurement card will make it easier for Departments to meet their targets for purchasing low value items electronically. The opening up of these purchasing routes is a major step forward for Departments to increase efficiency in line with best practice techniques.

Brian Rigby, Deputy Chief Executive of the Office of Government Commerce (OGC), an Office of HM Treasury set up to improve best practice procurement in the public sector, said:

The analysis tool we are unveiling today will help Departments measure their effectiveness in reaching the Prime Minister’s targets for electronic business in the UK that 90% of low value transactions are to be conducted electronically by 2001.

It will also help them identify where effort needs to be concentrated in the purchase to payment process in order to meet their targets. The new tool represents a further piece of best practice guidance to assist them to meet those objectives.

Andrew Watson, Manager for GPC, Visa International EU, said:

The third year of the GPC scheme has shown considerable growth in the number of departments implementing programmes and also in terms of the number of cardholders and the volume of transactions. To help facilitate this growth, the OGC, Visa and KPMG are all working together to ensure best practice is promoted across government departments and agencies to improve efficiencies.

The OGC is at the forefront of assisting departments in providing a new drive to improve performance in this emerging electronic era for departments to deliver best value for money in their commercial activities.

By making greater use of the Government Procurement Card (GPC) the public sector can derive further savings in this area of electronic spend.  The card targets efficiencies in the area of low value ordering making up 80% of the purchasing transactions conducted by Government and is therefore a rich seam of potential efficiency gains.

Transactions conducted using the card are a major component in the calculation model issued by the OGC that has been made available to departments to measure progress against the target of 90% of low value transactions being delivered electronically by 2001.  Use of the GPC is entirely consistent with the government’s E agenda and needs to be taken into the calculation.

The extensive take up of GPC as a payment mechanism to date in over 100 departments demonstrates its viability as a payment method for government.  Given the availability of this and other similar systems such as Automatic Credit Transfer and consolidated billing shows that Government has proven solutions readily available that increase efficiency.