Councils overcharged for IT purchases, study warns

The annual IT Margins Benchmarking study has highlighted that local authorities are being charged up to 11 times too much for IT purchases, as a result of excessive margins by suppliers.

The study, published by KowledgeBus, found the average margin paid by local councils last year was 19 per cent, despite best practice instructing a markup which is no higher than three per cent.

Al Nagar, head of benchmarking at KnowledgeBus, said: “The most extreme example of excessive margins are regularly found on those lower volume, spontaneous, ‘as and when’ purchases. These are typically unplanned purchases consisting of items such as memory sticks, power adapters and cables.

“All procurement officers need to be aware of this trend. Although this type of purchase may be perceived to be of a lesser value, compared to major pieces of IT infrastructure, they can make up a good 25 per cent of the IT budget. By the end of the year, this can easily add up to a six figure difference to the overall IT budget.”