Crackdown on government cards to cut ‘wasteful’ spending

Thousands of taxpayer-funded credit cards will be cancelled under plans to crack down on “wasteful” spending, the government has announced.

Government procurement cards were designed as a convenient way to make low-value, one-off purchases.

However, the government said spending on the cards had quadrupled in the past four years without enough scrutiny.

The Cabinet Office will order departments to freeze almost all of the around 20,000 cards in circulation this week, with a strict new application process aiming to cut the number by 50%.

Cardholders will have to justify their need or see them cancelled by the end of the month.

Only a small number of cards, used for specific purposes such as by diplomatic staff working in unstable environments, will be exempt from the freeze.

Meanwhile, the maximum spend for hospitality – often used by officials working in trade or diplomatic roles – will be cut from £2,500 to £500.

Any spending over this amount would require the approval of a senior civil servant.

More than £675m was spent on the cards by central departments and core agencies last year, up from £155m in 2020/21.

Purchases included £2,500 spent by UK diplomats at a women’s shoe shop in Barbados and £1,200 on luxury coffee pods by one team in two months.

Where departments identify examples of inappropriate spending, they have been told to take disciplinary action.

The move is part of a wider effort to cut spending and waste across government.

It comes as Chancellor Rachel Reeves prepares to deliver her Spring Statement next week, which is expected to include billions of pounds worth of spending cuts.

In a speech last week Sir Keir Starmer promised to make the “flabby” state more efficient and cut bureaucracy.

Cabinet Office minister Pat McFadden said: “We must ensure taxpayers’ money is spent on improving the lives of working people.

“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.”

The government said it was aiming to redirect essential spending into more appropriate procurement routes, where items or services are purchased at scale, delivering better value for money.

When Labour was in opposition it accused the Conservative government of overseeing “lavish spending” on hotels, hospitality and other costs using procurement cards.

However, last month the Times reported that thousands of pounds had been spent through the cards on things like meals at private members’ clubs and luxury crystal glasses under the new Labour government, prompting claims of hypocrisy.

A Conservative Party spokesman said: “Conservatives will always support cutting waste across government, and we will always support measures to stop the frivolous spending of taxpayer money.

“But this is a bit rich coming from the party – Labour – that did nothing to stop spending sprees in which Labour ministers wasted thousands of pounds of taxpayer money at high end restaurants and casinos. It was Conservative government that took the first steps to increase government procurement card transparency and cut nonsense spending.”