Crown Commercial Service
Ministry of Justice saves £500,000 with our Payment Solutions framework
Greater use of virtual procurement cards saves time and money for the Ministry of Justice.
The Ministry of Justice, alongside their executive agency HMPPS (Her Majesty’s Prison and Probation Service), is responsible for the prison estate across England and Wales. This includes the provision of safe, secure and supportive prisons that reform offenders.
One aspect of this duty is ensuring that all publicly managed prisons in England & Wales receive the food they need to keep in excess of 100 prisons and over 70,000 prisoners fed and watered.
This is a huge administrative task, resulting in the department previously receiving in excess of 70,000 invoices per year from their main contracted food supplier.
In a bid to use staff time more effectively along with improving supplier relationships and generating funds, in 2017 the Ministry of Justice looked to CCS to implement a procurement card programme.
The Ministry of Justice had previously taken advantage of our framework and had begun to reap the benefits of this against some lower volume contracts.
They identified that the transactional nature of the HMPPS food contract (high volume and low value) could suit this solution and realise further benefits.
“We recognised that, if we used the Payment Solutions framework for this contract, we could save significant internal resource whilst improving the experience for end users and strengthening the supplier relationship,” said Les Cook, a Commercial Lead at the Ministry of Justice.
The Ministry of Justice are now in their 5th year using procurement cards, currently under our Payment Solutions framework (RM3828), and have enjoyed transformative results:
- through implementing a virtual card, the manual processing associated with 70,000 invoices has been eliminated and this has saved in the region of £500,000 per year.
- the previous payment solution often resulted in a high level of overdue debt, which consumed further resources. Eliminating this has meant that contract management staff are able to shift focus to core tasks, spending more time implementing improvements elsewhere.
- using payment cards improved the Ministry of Justice’s payment times to suppliers from 30 days to around 4 – significantly strengthening their supply chain and improving relationships with suppliers. This has been hugely beneficial in recent times given the volatile cashflows of the supplier due to COVID-19.
Reflecting on the impact the Payment Solutions framework has had, Les Cook said:
“In addition to the £500,000 of savings, we have also eradicated historic problems with high amounts of overdue debt. This had a much broader benefit of improving relationships between the department and supplier and allowed us both to redeploy resource onto added value and strategically important pieces of work.
“Linking the virtual card to the suppliers’ ordering portal has also delivered improved product information and improved accessibility for end users which has seen our order compliance improve.
“I would recommend that procurement cards are considered by other departments when considering acquisition arrangements for low value, high volume transactions.
“It’s important that this is thoroughly reviewed prior to implementation and in advance of any associated procurement activity. Costs and benefits need to be clearly understood by both parties as it will impact on both the department and supplier.”
Start benefiting today
Whether you’re already using procurement cards and want to further harness their power, or if you want to introduce them into your organisation, you can quickly and easily start seeing the benefits.
Already using procurement cards?
If, like most, your organisation already uses procurement cards, we recommend that you conduct a thorough review of all current and future purchases to see where there’s an opportunity to spend more on cards.
Despite their unlimited scope, many organisations use cards for a narrow set of purchases – every purchase not made by card is potentially losing you time, money and control while weakening your supply chain.
New to procurement cards?
If your organisation is not currently using procurement cards, or are interested in switching providers, contact our team today.
You can also find out more about the agreement on our Payment Solutions web page.
It’s quick and easy to integrate procurement cards into your organisation. You can start saving time and money, strengthening your supply chain, generating additional funds, and enjoying increased financial control within weeks.
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