PRESS RELEASE: Council profits from cycle scheme at expense of local cycle shops

Labour-run Durham County Council is under pressure to help local bike
shops. Lib Dem campaigners have discovered that local firms have been
priced out of a cycle scheme in favour of a national firm.

Many big employers are involved in a salary sacrifice scheme which
allows employees to pay for a bike through national insurance rebates.
Durham County Council offers this scheme to its staff.

Two years ago local bike firms in County Durham were accessing the
council’s scheme. However a new contract with a national chain was
introduced. Whilst the local firms could still get involved, they
could only do so if they sold different bikes than the national chain
and had to pay a huge 15% commission.

Lib Dem councillor Mark Wilkes has found out that most of this
commission is pocketed by the Labour-run County Council. He commented
“Local firms have been priced out of the market by what is in effect a
back hander. This was not a requirement of the original tender. The
Council should immediately remove the 12% they are taking from this
scheme so that it is worthwhile for local firms to get involved.

A council spokesperson said of the commission “The income contributes
to the council’s costs for managing and promoting the scheme.”

The scheme has so far helped 205 employees take up the cycle program.
Almost all of those taking up the scheme in the last two years have
gone through the national company.

Salary sacrifice schemes like this one can be great at promoting
sustainable travel. The bike scheme helps to cut pollution and improve
health by getting people out of the car and onto bicycles.

However Lib Dem campaigners state that this should not be at the
expense of local firms who are in effect priced out of being involved.

Cllr Wilkes points out “By taking this commission the Council is
removing any chance that local firms can make money. Indeed we have
been told that to be involved actually costs them money as their
margins and costs are swept away by the council taking a cut.”

What makes campaigners even more angry is that the back hander was
kept secret until a local firm mentioned they were having to pay a
commission to the national provider.

Cllr Wilkes added “I imagine that not one of our local firms actually
knew the money was going back to Durham County Council!”

The Labour-run local authority has extended the national contract for
a further 2 years, but Lib Dem campaigners are calling on the Council
to amend the terms and remove the 12% cut they take so that local
firms can afford to get involved.

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