Amazon signs £600m deal to supply Yorkshire’s public sector

AMAZON has launched an assault on Britain’s public sector procurement market with a £600m deal to sell Yorkshire’s schools, social care providers and emergency services everything from paper clips to bandages.

In its first major public sector contract in the UK, the web giant will provide a one-stop-shop from which public bodies across Yorkshire can buy a broad range of products they need to operate.

Its site will replace a more complicated procurement system involving a number of suppliers.

With services ranging from office supplies to medical equipment, the deal covers education, emergency services, local government and social care across 13 local authority areas and is expected to be run through the new Amazon Business division.

Amazon signed the five-year deal with Yorkshire Purchasing Organisation (YPO), a procurement body owned by local authorities which helps to drive the cost of goods down by agreeing mass deals with suppliers.

Sales via the dedicated Amazon site are anticipated to be worth up to £600m during the contract period. Gus Tugendhat from data company Tussell, which tracks public sector contracts, said: “Having revolutionised consumers’ retail habits, Amazon’s next step may be to do the same for public sector purchasing.”

A contract notice published by YPO suggested that Amazon was “the only viable contractor currently operating in the market”, and showed that it had only received one expression of interest for the job which it was willing to consider.

While this is the first time Amazon has struck such a deal with a UK region, it has similar agreements in place in the United States.

Last year, it agreed to supply parts of the public sector through purchasing the organisation US Communities.

However, the plan has faced criticism amid concerns it has taken business away from local suppliers. The company launched its Amazon Business division in the UK in April last year, hoping to target the multi-billion pound business-to-business market.

It includes features designed to appeal to the business community, including Vat-exclusive pricing and a tracking system for purchasing managers so they can work out what is being spent.