A contract awarded to Amazon by a local government purchasing organisation is the biggest in the UK public sector, according to new research, despite the US-based company being accused of avoiding tax and treating its employees badly.

YPO signed a £400m deal with the controversial online retailer last month to provide a digital marketplace for councils to buy goods and services – far ahead of the next biggest UK public sector contract with HM Customers and Revenue worth £47m.

Market analysts Tussell say Peterborough City Council has proved the biggest public sector spender with Amazon, totalling nearly £600,000 last year over 25 purchases.

Its research shows UK public sector bodies have awarded 39 contracts worth a total of £460m to the company since 2015, according to the research.

Local government spending is mainly small transactions compared to much bigger central government deals.

These include contracts for Amazon Web Services through third-party suppliers to provide cloud computing.

The GMB union, which commissioned the research, accuses the company of paying too little UK tax and of mistreating employees.

The research shows Amazon received £11m for web hosting services from HMRC last year, despite paying just £1.7m on profits of £72m declared through its Amazon UK Services subsidiary in 2017.

A UK-based cloud hosting SME went bust after HMRC decided to switch to Amazon in 2017.

Amazon also received £4m from the Department for Work and Pensions, at least in part for hosting elements of the Universal Credit system, the new figures show.

Two senior civil servants, who were reportedly among the architects of the Government’s ‘cloud first’ procurement policy that directly benefited Amazon, recently switched to working for the company.

GMB general secretary Tim Roache said: 'Amazon are taking us for mugs.

'They must quite literally be laughing all the way to the bank – they’re making profit from a government that they refuse to pay their fair share of taxes to.

'They refuse dignity and rights for their workers, don’t pay their taxes and the Government give them contracts anyway – it’s beyond a joke.'

Local authorities will receive a financial dividend once a year from the money they have paid for goods and services through the framework.

LocalGov has contacted Amazon for a comment.

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