Thousands of Whitehall ‘credit cards’ to be suspended in spending crackdown

Read More

Thousands of Whitehall officials will have their government “credit cards” suspended this week in Labour’s latest crackdown on what it regards as wasteful spending in the civil service.

Pat McFadden, the Cabinet Office minister, said on Monday he would freeze almost all of the 20,000 government procurement cards (GPCs) within days with a view to permanently cancelling at least half of them.

It is part of a push to reduce spending on the civil service that has already led to the abolition of organisations such as the Payment Systems Regulator and NHS England, at a cost of about 10,000 jobs.

“We must ensure taxpayers’ money is spent on improving the lives of working people,” McFadden said. “It’s not right that hundreds of millions of pounds are spent on government credit cards each year, without high levels of scrutiny or challenge. Only officials for whom it is absolutely essential should have a card.”

Officials use GPCs to buy relatively small items such as flights, office furniture or drinks for official functions.

They were introduced by the last Labour government in 1997 as a way to reduce the bureaucracy required to run Whitehall departments. Spending on them has more than quadrupled over the last five years to £676m, with Labour sources pointing to spending on items such as shoes and DJ equipment as potentially wasteful.

While in opposition, Labour conducted an investigation into all spending on GPCs, which found examples of high spending by senior officials and ministers. In 2021, for instance, the then prime minister Boris Johnson used a government card to pay for a £4,445 dinner in New York for himself and 24 of his staff.

Later that year Liz Truss, as foreign secretary, spent nearly £1,500 on lunch and dinner during a visit to Indonesia in two of Jakarta’s most exclusive restaurants.

Also in 2021, the Treasury under Rishi Sunak spent more than £3,000 buying 13 photographs from the Tate to hang in its Whitehall building, despite already having access to the government art collection.

The Foreign Office is one of the heaviest users of GPCs, in part because officials have to organise regular functions to entertain foreign dignitaries. But as well as spending on items such as flights and catering, officials also spent nearly £2,500 at a shoe shop called Shoe Crush in Barbados.

Under new guidelines being rolled out by McFadden, the maximum spend for hospitality will be cut from £2,500 to £500, with any spending over £500 requiring approval from a director general.

Civil servants will be banned from using cards to buy things such as travel or office supplies, which could be bought more cheaply in bulk at a departmental or cross-departmental level.

Most of the 20,000 cards that have been issued will now be frozen, with exemptions for a small number of cases such as diplomatic staff in unstable locations. Cardholders will then be forced to reapply for their cards, and if unsuccessful will lose access to them by the end of the month.

McFadden has also asked departments to identify any items of spending that breach government guidelines and discipline the individuals in question.

Keir Starmer is spearheading a wider shake-up of Whitehall. As well as cuts to quasi-non-governmental organisations, the prime minister is urging departments to make greater use of technology such as artificial intelligence tools to reduce spending and streamline decision-making.

Some experts have warned that rather than making government more efficient, the changes to how Whitehall works could make it harder for civil servants to deliver the government’s main priorities such as cutting NHS waiting lists.