pCard and corporate credit card procurement

Today's Times included a throwaway comment that "there were signs that restrictions on corporate credit cards had started to loosen". Given that the article was generally referring to bankers, perhaps we should not draw conclusions that this is indicative of a general trend.

Of course we also need to be cautious in reading too much into what is meant by 'the restrictions' - for example, does it mean higher thresholds, wider categories of spend allowed or wider access to corporate credit cards?

Either way, organisations need to remember that corporate credit cards are not a perk or an opportunity for extravagance at the organisations expense. They should fit within the Finance and Procurement Policies and Strategies as a way of reducing transaction costs, and managing Low Value Orders. They also need to be supported by protocols, controls and guidance otherwise you may as well just hand over a wad of cash and tell the profligate to go and enjoy themselves.

24 hours to get your communications plan ready

It seems this weekend was a good time to bash public procurement and that the attack will continue on Monday night with Channel 4's Dispatches programme. I make no defence for public money wasted and am ashamed of some of the poor public stewardship exhibited. But the headlines can be misleading, the sound bites are easily digested and create barriers for hearing the truth. But procurement can see the media attention as an opportunity, to do that you need to think about what will be 'heard', how to respond and how to create a constructive platform for moving forward. These few days public procurement bashing can be very healthy and provide a useful opportunity for strategically repositioning procurement, if you want.

So, let's recall, Saturday's public procurement bashing centred around the Taxpayers' Alliance publication of the Bumper Book of Government Waste. The headline figure was £15bn of procurement waste per year. You can read my blog on how I believe the headlines were flawed. To me, if you are in public procurement, you need to have a quick refresh of the content of Towards Tesco, understand the key arguments, set out the pros and cons of your own organisational structure (acknowledge there is no perfect structure), be clear how you can maximise the benefits of collaborative procurement internally and externally, and set out your collaboration strategy.

Monday night's Dispatches programme provides a second bite of the cherry. In anticipation of that you should try to read the Sunday Times procurement bashing articles. Expect a revisit of Sir Philip Green's flawed report - you could read my critique. To me the focus of the bashing will be on pCards - now I've dealt with those before. You should understand the benefits of procurement cards, particularly how they can help local SMEs at the present time with cashflow problems. Also be clear about the transaction cost reductions and, contrary to the bashing, the increased control and visibility they provide. The Dispatches programme here is your ally as it highlights visibility which may not otherwise have been available. Make it clear that pCards were not the problem but inadequate governance, controls and procedures.

The timing of the media procurement bashing is also fortuitous - if the newspaper articles hadn't have been over the weekend, CEOs may not have had time to consider them. Your challenge now is to seize the opportunity and prepare a briefing paper for your CEO so that you can use media procurement bashing as part of your procurement communications strategy.

Trouble with Edinburgh procurement visibility

I'm sure you recognise that there's a responsibility on those looking after the public purse to demonstrate good stewardship. Does that apply with all money spent though?

I have come across a peculiarity when it comes to public bodies spending money which can be recharged back to individuals.

To help you grasp what may appear complex at first, some context is required. I apologise this may be a bit geeky, but try to bear with me. Just as important it may help you learn from the lessons of Edinburgh.

A council can serve a statutory improvement notice on a property owner and subsequently recharge the owner for any repairs carried out as a result of the owner's failure to carry out the repairs. Of course the owner can opt to carry out the work themselves, but sometimes the owner cannot be found in sufficient time and the council, therefore take on the role of agent, getting the work done and then pursuing the owner for the costs.

There are two potentially opposing pressures on the agent. One the need to get the work done as soon as possible to protect the property or neighbouring properties. The other the need to ensure that, acting on behalf of the owner (who may not be traceable), the 'price is right'. 

One way of trying to achieve those twin objectives is to put in place a framework agreement which can be drawn upon - not always as easy as it sounds. Of course not every council recognises the need to save the owner money or, if that money is not recovered, it is a cost incurred by the council and, as those un-recoupoed aggregated costs can up to a lot of dosh (in Edinburgh's case (£27m).   

I hope that sets some context. And so to the suggestions regarding Edinburgh reported today.

Opportunity Knocks but can the NHS shine in buying music lessons?

Personal Budgets have been around in local government for some time.  They are now to be rolled out so that anyone within the NHS Continuing Care programme will be able to request their own Personal Health Budget. What does this mean and are there implications for procurement?

In theory Personal Budgets are the lowest form of devolved decision making you can arrive at and they maximise user choice. The person in need of care, rather than being told 'these are the services you will receive' is given a budget to purchase what they think is most helpful to their personal situation. This could include buying a dog for company, paying for music lessons, or, ... . Theoretically there is no reason we couldn't have the next Choir of the Year made up of recipients singing a song on their experiences of Work Capability Assessments!

£2.7bn a year will be spent on the programme - but could it be spent more effectively and will procurement expertise be drawn upon?

I would like to see commissioning, social services staff and those closest to the future recipient to help design the potential shopping list of services which may be required. I would then like framework agreements put in place which the recipients could access. If the 'price is right' and the quality matches the users need, then the recipient could 'call off' the framework.

Of course for recipients ease of access and visibility of the catalogue would need to match their experience of online shopping - could the NHS beat the best in the use of social media functionality for Personal Budget purchasing?

You may ask:

pCard or not pCard, that is the question: Considering the evidience

The Government Procurement Card (pCard) was introduced in 1997. Its primary purpose was to reduce the transaction costs associated with Low Value Orders when it was assumed the cost of the transaction was more than the actual purchase price.  It was also believed that pCards would deliver better control and reduce fraud.

On 1 June 2012 the Public Accounts Committee (PAC) published its report on the use of pCard’s in central government. While the PAC report highlights the need for strengthening controls and a refreshed business case. This blog is not concerned with the key content of the report but instead considers some of the oral evidence reported verbatim in the report. The oral evidence discussed reveals some matters of relevance to all those concerned with reducing procurement transaction costs, regardless of whether or not they are based in the UK, engaged in central government or the wider public sector.  While concurring with the PAC findings and recommendations, the significance of some of the key issues debated appears to have been missed in the key body of the PAC Report.