19 May 2021

Councils charged triple the recommended mark-up on IT products

Councils charged triple the recommended mark-up on IT products image

Councils are paying more than three times the recommended mark-up on technology products, a new study has revealed.

The analysis by Probrand found that before the pandemic, the average margin paid by local councils on technology was 9.8%. The Society of IT Managers states that organisations should be paying no more than a 3% margin to suppliers.

One council was found to be paying margins of nearly 580% on its purchases, nearly two hundred times higher than the recommended mark-up.

The study also found mark-ups spiked 'dramatically' during the first national lockdown, rising to more than 50% on average for all tech buyers.

Ian Nethercot, MCIPS supply chain director at Probrand, said: 'When we conduct spending reviews it’s not unusual to find some organisations paying way more than 3% over the trade price of the product – especially if they don’t have price monitoring tools in place. In recent years though, we’ve seen companies getting more savvy when it comes to restricting the margins paid to suppliers.

'COVID-19 completely changed the landscape, however. We witnessed both a huge spike in demand and a significant contraction in supply – due to factories closing in Asia and planes being grounded. There is no doubt that this extreme supply and demand characteristic resulted in panic buying, with people prepared to buy whatever they could get their hands on at whatever price in order to equip staff working from home.'

SIGN UP
For your free daily news bulletin
Highways jobs

Senior Waste Manager

Isle of Wight Council
£42,923 to £46,402 per annum
We are seeking to appoint a highly motivated individual County Hall, Newport / Agile
Recuriter: Isle of Wight Council

Engineer (Client Team)

Manchester City Council
£35,336 to £39,571 (Bar at £38,553) per annum 
The post holder will be responsible for supporting the Client Team Manager Manchester, Greater Manchester
Recuriter: Manchester City Council

Support Worker - Class (UK) Ltd - Chelmsford

Essex County Council
Up to £10 per hour
Essex County Council (ECC) are delighted to be supporting Class (UK) Ltd to recruit Support Workers for their supported living service in Chelmsfor England, Essex, Chelmsford
Recuriter: Essex County Council

Day Centre Support Worker - Class (UK) Ltd

Essex County Council
Up to £10 per hour
Essex County Council (ECC) are delighted to be supporting Class (UK) Ltd to recruit Day Centre Support Workers for their day centre service, The Zo England, Essex, Chelmsford
Recuriter: Essex County Council

Trusted Assessor

City of Bradford MDC
£28,226 - £32,798 pa
We are looking for people who can
Recuriter: City of Bradford MDC

Partner Content

Circular highways is a necessity not an aspiration – and it’s within our grasp

Shell is helping power the journey towards a circular paving industry with Shell Bitumen LT R, a new product for roads that uses plastics destined for landfill as part of the additives to make the bitumen.

Support from Effective Energy Group for Local Authorities to Deliver £430m Sustainable Warmth Funded Energy Efficiency Projects

Effective Energy Group is now offering its support to the 40 Local Authorities who have received a share of the £430m to deliver their projects on the ground by surveying properties and installing measures.

Pay.UK – the next step in Bacs’ evolution

Dougie Belmore explains how one of the main interfaces between you and Bacs is about to change.