State to save up to €30 on every procurement

A new system of invoicing will save government departments and state bodies up to €30 per transaction while earning banks millions in fees.

A framework agreement launched by Brian Hayes, minister of state at the Department of Finance, named Ulster Bank Ireland and Bank of Ireland as the winners of a lucrative tender to provide government bodies with purchasing cards that it is hoped will be used to process €200m of state expenditure a year.

An Ulster Bank spokesperson said that the bank will charge a small fee per transaction. “Ulster Bank receive a modest transaction service fee, the level of which reduces as usage increases.”

The average value of each transaction is as low as €350.

However, a spokesperson for the Office of Public Works (OPW) said that there will be huge savings in efficiencies within the public sector as a huge number of invoices will no longer have to be prepared and processed.

“Through the use of purchasing cards, there will be administrative savings derived by public sector bodies through the reduction in the number of invoices processed through accounts systems.

“Purchase card transactions will be batched into a single monthly invoice, eliminating the need for invoices for each individual transaction to be issued and processed. It is estimated that administrative efficiencies of some €30 per transaction can be generated through the use of purchasing cards,” a spokesperson for the OPW said.

Mr Hayes described the arrangement as mutually beneficial to both the banks and the Government.

“The purchasing card framework agreement ticks many of the boxes as far as government policy is concerned. For example, the SME sector will be assisted through the improvement of their cash flow and it will also help address many efficiency and cost reduction objectives of the Public Sector Reform Agenda,” he said.