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GPC Annual Report 2004

GPC Annual Report 2004

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Published by Ian Makgill
Government Procurement Card Annual Report 2004
Government Procurement Card Annual Report 2004

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Published by: Ian Makgill on Apr 28, 2008
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06/16/2009

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This year we can celebrate the milestoneof over £1 billion cumulative spend onthe Government Procurement Card (GPC Visa), by more than 62,000 users, inover 420 public sector programmes. This achievement is not just a good exampleof efficiency working, but also one ofcollaboration succeeding as OGCbuying.solutions (OGCb.s) has worked with Visa Europe and a consortium of sevenbanks to make this initiative a reality. Inachieving such a significant success,GPC Visa has shown that the public andprivate sectors can work in partnership. Effective partnership is not the only initiativewhich is being demonstrated here. GPC Visa is also a key component in the Nationale-Procurement Strategy, assisting publicsector organisations to fulfil both theirefficiency targets and their e-targets as wellas meeting prompt payment legislation.In turn, prompt payment and reducedadministration have another beneficialeffect – enabling small and medium sizedenterprises to conduct business with awide range of public sector organisations. Environmental benefits are generated as aresult of using less paper – 330 tonnes ofpaper has already been removed from thepurchase to pay process. The number of cardusers is on the increase, and it is estimatedthat GPC Visa is now responsible for savingover 2 million pieces of A4 paper per month.So GPC Visa is, in every sense, a success.It reduces bureaucracy and saves moneywhile it opens up the Government marketto new opportunities and new suppliers.The card has already been adopted bymany areas of Central Government andthe wider public sector. I would urge everypublic sector organisation to make fulluse of GPC Visa; it really is an easy way toreduce their administration and maximisetheir potential for efficiency savings.John OughtonChief Executive, OGC
Introduction“GPC Visa is, in every sense, a success. Itreduces bureaucracy and saves moneywhile it opens up the government marketto new opportunities and new suppliers”
John Oughton, Chief Executive, Office of Government Commerce, 2004
 
Government Procurement Card Annual Report 2004
Delivering efficiencysavings across theUK Public Sector
 
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Seventh year results
This, the seventh year of the card, has beenthe most successful to date. The total amountof spend on GPC Visa since the first card wasissued is now more than one billion pounds.This is an increase in spend of £405 millionin the last year, which represents more thana 56% increase overall. The use of GPC Visais accelerating fast, with over 60% of the£1bn total spend occurring since the launchof the second contract in February 2003.
This year’s progress“The total amount of spend placedthrough GPC Visa since the first card wasissued is now over one billion pounds”.
Total spend (cumulative)
Source: UK banks
Monthly spend, 2004
Source: UK banks
Monthly growth comparing 2003 and 2004
Source: UK banks
 A good indication of card usage is to look atboth the amount of spend and the numberof transactions. Comparing the figures forspend and transactions for individual monthsbetween 2003 and 2004 shows monthlyincreases in both spend and transactionsacross the twelve months. When comparingspend, the lowest rate of increase betweenmonths across the year is 18% betweenJanuary 2003 and January 2004, whilst a 50%rate of increase is found between December2003 and December 2004. Comparing thenumber of transactions per month between2003 to 2004 demonstrates similar rates ofincrease. Growth is clearly both consistentand regular, and there is no expectationthat it will slow in the immediate future.The pattern of monthly spend increasecontinues to reflect that of previous years. Again there were slowdowns in spendduring April and December, which can beattributed to spring allocation of budgets andChristmas holidays respectively. The trendwas upwards growth throughout the year.
15m20m25m30m35m40mDecNovOctSep AugJulJunMay AprMarFebJan 0m200m400m600m800m1000m1200m2004200320022001200019991998 0%10%20%30%40%50%DecNovOctSep AugJulJunMay AprMarFebJan — Monthly spend— Monthly number of transactions
 
5
This year’s progress cont.
Turnover has also increased, with this year’samounting to 45% of the total since theprogramme started in 1997. The reason forthis very strong growth can be attributedto the number of card programmes, whichhas grown from 277 in 2003 to 424 this year,representing an increase of 53% in 2004. Thisis the largest percentage increase in the lastthree years.For the first time the number of transactionsper programme is less than the previousyear. However, with such significant growthin the number of programmes, this is notunexpected and as new initiatives maturewe expect to see a significant increase in thenumber of transactions per programme for thecoming year.Such strong growth clearly demonstratesthat GPC Visa is becoming a standardform of payment for the public sector. Cardprogrammes are rapidly extending beyondCentral Civil Government departments andinto all areas of the public sector. For exampleBristol City Council are using 170 virtualcards in 160 schools to improve the efficiencyof their procurement, whilst the Ministryof Defence have over 14,000 cards in theirprogramme. In both cases the purpose is thesame: increased efficiency. As the use of the card has increased, so havethe savings figures. The annual savings figurefor calendar year 2004 is £64,875,216* whichrepresents 35% of the £187m cumulativesavings for the entire programme.
This year’s progress“GPC Visa is becoming a standard form ofpayment for the public sector”
Environmental
Increased usage of the GPC Visa cardalso has a positive environmental impact. Visa estimates that 23 million pieces ofpaper were saved last year** by usingthe card, an increase of 53% on theprevious year. This amount of paper is anequivalent saving of 2,015 trees this yearalone, with a cumulative saving of 5,804trees during the whole programme.With approximately 35% of all landfill in the UKbeing made up from waste paper, we can seethat the GPC is having a positive effect, bothin terms of reducing the consumption of paperand reducing our dependency on landfill. Alsoby reducing paper usage we reduce the useof printer inks, energy use for print runs andtherefore positively reduce CO
2
emissions.
*Calculated using the NAO approved figure of £28 saving per transaction.** Paper savings based upon 10 pieces of A4 paper saved per transaction
Total cumulative savings
Source: UK banks0m50m100m150m200m2004200320022001200019991998

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