I move:
That Dáil Éireann takes note of the Report of the Committee on Public Expenditure:
Review of a Proposal to Introduce a Charge Card System for Civil Servants Travelling on Official Business.
I thank the House and particularly the Minister for Finance for the opportunity to have a brief discussion on this proposal which can effect some standard of savings and introduce greater efficiencies in certain areas.
This committee report, circulated to all Members of the House, which is a short one, examined the possibility that the Exchequer might benefit from the introduction of charge card facilities for civil servants travelling on official business. The committee felt that an experimental pilot scheme should be established which would allow civil servants to use charge cards in making payments related to official travel. The report suggests that the use of such charge cards could improve the Government's cash-flow and could also gain credit of about 60 days in some cases on payments for official travel and related costs. In this context I should mention that the gross expenditure last year was £21.5 million for travel and £14.5 million for subsistence — a total of about £36 million.
The committee also suggests that the use of charge cards would improve employee productivity and morale, that official travel would become more convenient and would involve less security risk and also that the Government's buying power with the travel service and other suppliers would be enhanced because expenditure could be readily monitored and reported and would, therefore, have a greater competitive edge.
The improvement in employee productivity and morale would concern any member engaged in any evaluation of the public service at the present time. In view of the difficult economic era there has been an increased degree of scrutiny in relation to public expenditure generally. One of the concerns is that some of this evaluation may result in a diminution of morale and professional pride in a service for which this House has a great degree of respect. The introduction of a modern innovative purchasing technique which implies by virtue of its being granted to the recipients a certain degree of trust would unquestionably add to the morale and productivity of the people involved and would show civil servants that they are trusted to do their business effectively and efficiently on behalf of the State. It obviously means that official travel will become more convenient. Anybody who has gone abroad on official business will be aware of the occasional difficulties which arise caused by the need to make elaborate pre-emptive arrangements and of the difficulties attached to transacting business in foreign currencies and so on. A card which brings the opportunity of doing business in an international language reduces the difficulties.
Not insignificantly, the reduction and the virtual elimination in some respects of the security risks, which the card would bring with it, is also to be welcomed and would make for greater peace of mind for the bearers of the card.
The Government's borrowing power is close to the heart of the Minister and those watching public expenditure patterns as they emerge. The buying power of the public service could be more easily monitored and evaluated by the high tech approach which is adopted in the context of charge and credit cards. The enhancement of expenditure monitoring would yield significant results. Easier, more rapid evaluation of where individuals and Departments spend moneys will unquestionably lead to stronger purchasing power. It is significant that because of its clear accountability factor it would lead to a reduction in mistakes, whether deliberate or otherwise, in the claiming of expenses for travel arrangements. The card affords an enhanced measure of security in that respect. The competitive edge is also a valuable one. Where there is the possibility of block purchasing, of competing in the market place, these things are helped where one has more accessible information at one's fingertips.
In July 1984 the committee decided to investigate the possibility that the Exchequer might benefit in overall terms from the introduction of charge card facilities for civil servants travelling on business. At this stage it is no harm to distinguish between the concept of a credit card and a charge card. The main difference seems to be that a charge card account has to be settled in full approximately every 30 days, whereas with a credit card account it is possible to get something like twice that length of credit free of charge depending on the time of the month at which the charge is incurred. A charge card is normally a method of deferred payment which is targeted at the business traveller who is not looking for credit as such. In terms of cash flow and creditability there may be potential for evaluating and possibly implementing a system for charge/credit cards.
The committee heard evidence from Diners Club International, to whom I on behalf of the committee extend gratitude for their great willingness to talk to us without any strings attached to help us to develop this report. They acted in a selfless and civic-minded manner for which we thank them. The resultant paper is to the benefit of all. The Diners Club International at our request made a detailed submission and the views of the Department of Finance were then obtained on the feasibility and possible cost benefit to the Exchequer of the introduction of a charge card system.
The objectives of the committee's inquiry were to examine the procedures used within the public service in the payment of charges for travel and subsistence, to compare them with the alternative system proposed by Diners Club and to consider whether better value for money could be obtained from that or some other system.
I hope that the House and the Minister for Finance will embrace the committee's fairly moderate conclusion that a pilot scheme should be established for the introduction of a charge card system. In arriving at this conclusion we were mindful of the fact that charge cards are used widely in the private sector and by certain semi-State sponsored bodies where they do not cause any difficulty and where they add to the ease, flexibility and accountability of the organisations which use them. In addition, the operation of the charge card service in the US Federal Government has proved to be successful and the most recent reports on that indicate that that experiment has been very successful and that it is proposed to extend it. Therefore, the committee are conscious of the need for innovation and experimentation within the public sector and we understand that a pilot scheme or, indeed, a service-wide scheme could be introduced by the charge card companies operating in Ireland and that if approached in the right way they might do this free of charge. Our recommendations suggest that the pilot scheme at least should be carried out free of charge if at all possible and that it would not involve any net increase in cost to the Exchequer. We believe that is in the interests not just of the Exchequer in this case but of the credit/charge card companies who, one would hope, would justifiably also generate extra business and extra advantage from the activity.
Of course, we are fully aware that there will be occasions when charge cards cannot be used. This has been the experience in the US, and this is overcome by maintaining a more modest system of cash advances in cases where cards would not be appropriate. However, with the increasing scope first of all in terms of range and comprehension of card services throughout the world, and secondly by the increasing variation in terms of flexibility and versatility which the charge card companies have now introduced, there are relatively few cases where it would be necessary to continue with the cash advance system. Therefore in the circumstances my committee have no hesitation in recommending that a pilot scheme should be introduced following detailed investigation by the Minister for Finance of the merits of the scheme on the understanding that there would be no net increased costs to the Exchequer.
We are confident that the proposal, which I submit is modest, would have advantages not just for the Exchequer but also for the individual Departments and individual users of the charge card system in terms of self-image, flexibility, versatility, and efficiency, not to mention the significant savings which we believe will arise from the introduction of the scheme eventually.
I will conclude by restating my gratitude to Diners Club International and Mr. Brian Murphy particularly and to the other card companies who have offered whatever assistance and advice they can to help us to progress the system. I express my gratitude to the Minister for Finance who has at all times — I am not saying this merely because he is in the House but because it is true — expressed a particular degree of sympathy towards the aims and aspirations of the committee and has taken a close personal interest in our work which we have found heartening and encouraging. Accordingly, I commend this modest report to the House and to the Minister and await with interest his reaction to it.