Councils are concentrating more than half their total spend with their top five suppliers, despite dependency concerns following the collapse of Carillion, 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.'
Thios story orginally appeared on LocalGov.
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