Thursday, 2 June 2011

Councils taking taxpayers for a ride with lavish credit card spending


This week The Daily Telegraph revealed that councils across the UK spent over £100million on taxpayer funded credit cards in the last three years. Government Procurement Cards (GPCs), as they are officially known, were intended to cut red tape and the costly bureaucracy involved in reimbursing employees for small expense claims, but The Telegraph’s findings show that over the last three years councils have spent recklessly on their credit cards, taking taxpayers for a ride.

And that ride was quite often to the Far East for employees of Cornwall council, as they took trips to Goa, Bangkok and Kyoto at taxpayers’ expense, in turn racking up a bill for over £1.1million in the last three years on hotels alone. The council refused to comment when contacted by The Telegraph.

It's alright, it's on the taxpayer!

Council employees also dined at the Michelin starred Claridge’s restaurant in London’s Mayfair, and spent over £500,000 on lavish gifts from retailers such as Gucci and Tiffany’s. The list of transactions ranges from the extravagant to the outlandish: a Horsham council employee spent £1,150 on two llamas to graze a patch of commercial land and Aberdeenshire council splashed-out £3,500 on some cheerleading pom-poms. Councils across the UK also spent over £100,000 on Apple products alone; it is hard to believe the benefit of this to residents across the country. Apple products are by no means the cheapest products on the market – there are other options available.

Eric Pickles described the findings as “wild” and claimed “some councils have been enjoying the high-life, paid for by you and me.” He’s right: many of the items of spending simply cannot be justified. Some councils don’t even have a record for some transactions; a total of over £20,000 was unaccounted for by councils because no receipts were provided. If an expenses system was cumbersome, at least receipts had to be shown. But with GPCs councils are agreeing to pay for transactions they do not even have a record for.

The Telegraph discovered that of the 434 local authorities questioned only 48 do not issue employees with credit cards. Those that do seem to have their own internal guidelines on how they should operate. Philip Green in his efficiency review concluded that spending on GPCs is “simply not monitored.” They may be the most cost effective means of spending for certain items, but what was supposed to be a means to cut red tape has resulted in taxpayers footing the bills for unchecked spending. The principle of GPC’s is a good one however it needs to be properly monitored, the current financial controls are inadequate.

With an expenses system, staff may be more careful with their spending as they have to pay for items themselves first. But with taxpayers’ cash on tap, this is no longer an issue and many have had quite a time on our shout.

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