Laura Sharman 21 September 2018

Councils have 'dangerous dependence' on a handful of suppliers

Councils have dangerous dependence on a handful of suppliers image

Councils are concentrating more than half their total spend with their top five suppliers, new research has revealed.

A freedom of information request by Ivalua found councils in England spent £52.5m with their top five suppliers in the past year, putting public services at risk in the event of a company collapsing.

Despite one in five councils previously working with Carillion, the research found that just one council plans to increase the number of suppliers used. In fact, 21% of councils announced plans to decrease the number of suppliers used in the next 12 months.

Alex Saric, smart procurement expert at Ivalua, said: 'A level of supplier consolidation makes sense. Consolidating spend in specific categories with a handful of suppliers supports volume-based discounts and the ability to better monitor supplier performance and strengthen relationships.

'However, it’s clear that many councils have a dangerous dependence on a handful of strategic suppliers, increasing the risk of being left in limbo and scrambling to backfill contracts and onboard new suppliers.'

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