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SUPPLIERS SUE CONSORTIUM OVER 'UNFAIR' OUT-OF-AREA TRADING

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A council-based purchasing consortium which trades outside its boundaries is to be challenged in the High Court nex...
A council-based purchasing consortium which trades outside its boundaries is to be challenged in the High Court next month.

A judicial review is being brought by the British Educational Suppliers Association against the Yorkshire Purchasing Organisation, which trades with schools across the country.

If the case is successful it could force up the cost of buying a whole range of goods.

It comes despite legal advice from the government at the end of last year that councils were free to trade outside their boundaries with specified bodies. The Audit Commission has yet to issue advice in reaction to the legal opinion.

The British Educational Suppliers Association says its 220 members, which have a combined turnover of half a billion pounds, are facing unfair competition from these public sector based organisations.

Purchasing consortia are used by councils to give them clout in their dealings with suppliers. By pooling orders they are able to negotiate large discounts.

The BESA says the advent of local management of schools has increasingly seen these consortia operating outside their area. It says the move to expand markets is being done with the expectation that the consortia will be privatised.

It also claims that smaller council-based supply departments are being undermined by the trading activities of the larger organisations.

BESA chief executive Dominic Savage said its decision to take the Yorkshire Purchasing Organisation in particular to court was incidental, since it had to choose one consortium in order to bring the action.

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