Play your cards right

The Government Procurement Card (GPC Visa) has successfully generated in excess of £350m in cumulative savings for the public purse and has been credited with achieving 20 per cent of OGCbuying.solutions reported savings in 2005-06. Jim Parkinson, head of payment cards at OGCbuying.solutions, talks about some of the ways in which the UK public sector has been harnessing this essential procurement tool, both to save money and improve front line service delivery.

What is gpc visa?
Launched in 1997 following a fully compliant tender process, the GPC Visa programme offers one of the easiest ways for the UK public sector to meet its efficiency targets. Following a second EU-compliant tender process, an exclusive agreement between OGC buying.solutions, Visa and six Visa-issuing banks enables public sector bodies to opt for GPC Visa and benefit from a pre-negotiated payment card contract with a core service of no card fees and no transaction fees. This is sourced in a competitive environment where all the contracted Visa-issuing banks actively compete for their business with their own GPC Visa programmes.
    
Endorsed by both HM Treasury and the National Audit Office, GPC Visa is a payment and data delivery system. It also offers users one of the most cost-effective e-procurement tools available. It combines flexibility, convenience, security, simplified payment, reduced costs and an unrivalled capability for data management – all on a bespoke basis.
    
Today there are now more than 89,000 GPC Visa users and over 750 active programmes around the country. With spend on GPC Visa to date exceeding £2 billion and savings in excess of £350 million, there has never been a more compelling reason for those involved in procuring goods and services in a public sector environment to take serious note of its potential.

Cashable and non-cashable savings
This is particularly the case because GPC Visa delivers both cashable and non-cashable savings – a key aspect of Gershon’s Efficiency Review targets. Put simply, GPC Visa enables users to spend less on the purchase of goods and services so that savings can be re-deployed into other areas of the organisation. At the same time it makes back office processes more efficient and less time consuming, freeing staff from unnecessary bureaucracy and paperwork and allowing them to focus on front line service delivery.
    
Viewed in this way, GPC Visa becomes a cornerstone of public sector efficiency. And, because it is so flexible and versatile it can be used by any size of organisation, either as part of a wider efficiency drive or as the primary agent of change.
    
Examples of GPC Visa in action may be found on the www.purchasingcard.info website together with a useful benchmarking tool designed to help public sector bodies and suppliers understand how GPC Visa can contribute to their organisation’s procurement strategy.

User benefits
Key benefits that current GPC Visa users enjoy include: full empowerment with accountability of end users to procure products and services, always within appropriate levels of control; clear audit trails through bespoke management information reports which identify for each transaction how much was spent, when, with whom and by whom; and improved relationships with suppliers because they know they will be paid within four working days through GPC Visa (the buying organisation settles a monthly consolidated invoice issued by its chosen bank provider).
    
When GPC Visa was first introduced, the system was generally used to purchase simple commodities with an emphasis on lower value procurement (typically below £500 per transaction). However, in recent years public sector organisations have become increasingly confident in the power of GPC Visa as a procurement tool. This means they are using it for more advanced procurement and higher value transactions which can exceed £10,000.
    
In addition, the rise in the use of the internet has stimulated growth in GPC Visa travel and subsistence schemes as a means of eliminating bureaucracy while providing the added benefits of insurance and security protection. Finally, there is growing recognition that GPC Visa can be used in the e-environment as a ‘virtual embedded card’ as well as a physical card.

Edinburgh City Council
Edinburgh City Council illustrates this point well in a ground breaking scheme to support the City’s Safe Building’s Initiative.
    
Edinburgh City Council is responsible for maintaining one of the largest stocks of heritage public buildings and landmark properties in the country. It faced a major issue processing the vast quantity of paper invoices relating to property maintenance work (over 14,000 in 2005), and experienced major difficulties in paying contractors on time.
    
The decision was taken to work with the Council’s bank, a third party software provider and GPC Visa to develop the first automated invoicing and payment system for Building Maintenance. The web based system was designed to speed up the payment of contractors to within 48 hours of sign off of all invoices, create a simple, transparent process through which invoices could be tracked and finally to remove paper from the back office environment.
    
The result was everything that the Council had hoped for and more. Relationships with valuable local contractors have improved as payment is received within 36 to 48 hours while unnecessary back office administration has been eradicated freeing staff to focus on front line service delivery. Work flows are easier to manage as any delays are instantly identifiable through the web-based system, and paper consumption has been reduced as all bills are consolidated onto a single monthly statement providing a full audit trail. In addition, the Council has saved over £330,000 in process costs, not to mention the time savings from the seamless integration of the system into the existing back office Oracle system.

Kent County Council
Elsewhere in the local authority arena, Kent County Council is a shining illustration of how GPC Visa has helped to improve the County’s social care facilities. As one of the UK’s largest councils, Kent County Council has over 70 suppliers providing care services to 36,000 adults living at home. It purchases over 2.5 million hours of care each year, which traditionally generated up to 25,000 invoices annually.
    
Kent wanted to improve the efficiency of its back office processes so that care workers could be paid more quickly, growing demand for the Council’s services could be met and resources could be more effectively deployed in priority areas.
    
The result was an e-commerce solution based on GPC Visa to manage invoices and payments to care providers. Completely tailored to the needs of the Council, the system has dramatically changed home care service provision across Kent for the better. By reducing the council’s administrative costs, money is being freed to deliver better care and as service providers are being paid within four days, they too are able to run their businesses more efficiently resulting in better service to the Council. Currently it is estimated that as a result of using GPC Visa, Kent County Council is generating efficiency savings of £700,000 per annum and this is only set to increase.

GPC shows the way
Given the current rate of growth of GPC Visa, both in terms of spend, numbers of programmes and cumulative savings, it is clear that confidence in the system is rising. GPC Visa has proved its credentials as an effective and versatile procurement tool which is benefiting public sector organisations as diverse as the Scottish Executive, DEFRA, Southampton NHS Trust, and the Metropolitan Police, to name but a few.
    
Given the overwhelming evidence in its favour, there is no denying that the future of both cashable and non-cashable savings in the public sector lies in the cards.

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