A decade of savings

In the ten years since 1997 many ideas have been suggested for the effective delivery of public sector services. Not all of them have stood up to the test of time but one that we’re particularly proud of at Visa Europe is the Government Procurement Card (GPC Visa) programme.

Card payments
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 OGCbuying.solutions, Visa and five Visa-issuing banks means that public sector organisations can adopt GPC Visa and benefit from a pre-negotiated payment card contract. This is sourced in a competitive environment where all the contracted Visa-issuing banks actively compete 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.

Large savings
The success of the programme is demonstrated by the figures: there are now more than 100,000 GPC Visa users and over 850 active programmes in the UK. Since the programme began in 1997, more than £2.5 billion has been spent which has generated savings in excess of £419 millionº for the UK taxpayer. Any programme that can deliver clear efficiency gains and help ensure that each pound of public money is directed, as effectively as possible, toward the provision of services is going to have staying power.
Process efficiency savings are well documented and continue to grow as more and more public servants become aware of the benefits and potential of GPC Visa. These are a real achievement that means GPC Visa stands up for itself. This is a continued success story and the winner here is the UK taxpayer.
One of the factors for GPC Visa’s continued success is that it offers so much more than just a payment card. There are three things that show that GPC Visa was, and still is, ahead of its time when it was designed ten years ago. These are: paper savings, improving budgetary controls and putting service delivery at the top of the agenda.

Cutting paperwork
When the programme was being designed back in 1997, it was important that the system would avoid unnecessary paperwork. There are practical reasons. For example, most paper-based processes tend to be costly, prone to errors and considerable amounts of paper need to be handled and filed away.
There were also other concerns that were ahead of their time ten years ago, namely the environment. Climate change and the recently announced review of sustainable government procurement have made paperless systems more attractive today. It is one of the GPC Visa programme’s strengths.
Aside from the obvious fact that there is a reduced need to pulp down healthy trees to print reams of paper to support orders and payments, a paperless system reduces the need to ship paper around the country, thus reducing CO2 emissions. One monthly bill from your bank – or even an electronic file downloaded and integrated into existing financial management software – avoids the need for paper to be delivered as separate invoices from all of an organisation’s suppliers – again reducing CO2 emissions. Other reductions in toner cartridges, chlorine and bleaching agents for paper production, etc., add to the benefits you derive from using GPC Visa.
It has been calculated that the paper savings of a GPC Visa programme are on average, ten pieces of paper per transaction. Aside from the incalculable road miles saved thanks to GPC Visa, it’s saved 149 million pieces of paper since 1997. Stack that paper and the pile would tower over 14 kilometres.

Managing information
Another point that gives GPC Visa such staying power is that it provides organisations with clear, useful management information. This can then be integrated into either a management information system or software system. The benefit of this approach is that it allows managers to review not only the products being purchased and their price, but also who is buying and where.
Information this rich is useful because it allows centralised purchasing policies to be monitored and, more importantly, allows better price negotiation with suppliers. Today, GPC users can see all transactions that take place with a supplier and secure deals that reflect the full value and volume of business going to that specific supplier.
These features of GPC Visa are useful in working towards the Gershon efficiency targets, but continue to be crucial as further demands to increase efficiencies and reduce costs have to be met.

Redirecting duties
With budgets getting tighter, this sort of spending control and information enables the public sector to work smart. Knowing where money is being spent and negotiating improved deals based on that information can make a substantial difference. In addition, employee effectiveness improves as purely back office and administration duties can be redeployed to more citizen-facing service roles.
Therefore, GPC Visa helps to position the provision of services at the forefront of the public sector activities. GPC Visa, through increased efficiency and less time consuming processes, frees staff from unnecessary bureaucracy and paperwork and allows them to focus on front line service delivery. A recent new user of GPC Visa, Durham County Council, is a great example of how a GPC Visa programme can improve the quality of service for the taxpayer.

GPC Visa in Durham County Council
Durham County Council’s Service Direct Department, formerly the Public Works Department, carries out essential services that require specialist knowledge and skills. Services provided by the department include building services that covers the upkeep of all council-owned properties from schools to care homes. In order to satisfy the needs of their clients, the Buildings Maintenance Division has a rapid response team of tradesmen to carry out essential maintenance promptly and efficiently.
The stated aim of the rapid response team is “to provide clients with a service where one visit satisfies their requirements”. Whilst the tradesmen carry a number of supplies with them, it is not always possible to anticipate the exact requirements for each job prior to visiting the site. Depending on the location, this could result in the tradesmen making a lengthy trip back to the stores to pick up a part.
Durham’s previous system was a paper-based process that required tradesmen to handwrite every purchase order in triplicate. These forms then had to be filed correctly by the tradesmen. Not only was this process detracting from their primary work of maintaining the council’s properties, but it also created work for the back office. The clerical team would have to process all the paper orders raised by the tradesmen, which could be as many as 1,000 orders per month. Additionally, it is estimated that a significant number of order notes were being lost and that many of the orders which were filed contained errors that required resolution.
The council implemented GPC Visa with Deecal’s management information software. Employing a strict policy for using the cards, the council has allowed the tradesmen to use the cards to purchase the parts and tools they require for their rapid response work.
Using GPC Visa has resolved many of the procedural problems that were occurring under the old system. GPC Visa enables the tradesmen to assess the job first, and if they need to purchase additional supplies to complete the job, they can do so locally without having to complete forms in triplicate. GPC Visa therefore enables the tradesmen to deliver a more efficient, higher quality service and helps them to meet their goals.

Controlling spend
To control spend, tradesmen are limited to using their cards with preferred suppliers. Each of these suppliers has the capability to provide Line Item Detail (LID) data for all the transactions they process. The council now receives an electronic record of every item purchased using the cards, including the VAT that has been paid on each item.
Using LID-capable suppliers means that the data can be automatically uploaded to the council’s financial management system and that maverick spend can be easily monitored. In addition, the council has developed an in-house system so that the data can automatically be integrated with the job costings system to provide accurate up-to-date job information and expenditure, improving budgetary controls. The use of GPC Visa has resulted in back office time-savings equivalent to almost one full-time staff member. This time is now being used to deliver improved frontline services.
GPC Visa has provided a simple method to automate a time-consuming process. The Buildings Maintenance Division now has a new purchasing process that provides significantly better information while using fewer resources to deliver the same outcome.
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. This also provides access to a database of suppliers who may also provide additional, enhanced transaction data including Evidence of VAT at Summary VAT or Line Item Detail (LID). Last year the site received over 600,000 hits from 55 different countries – testimony to its success.For more information
Website: www.purchasingcard.info

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