Birmingham City Council is buying new desks for staff at the rate of 200 a year as part of an annual #4.7 million bill for office furniture.

The figures, unearthed during an inquiry into procurement processes, show that managers relied on 147 different firms to supply the goods and paid 11,389 separate invoices during 2004.

More than three-quarters of the transactions were for sums of less than #100,000 and organised on a non-contract basis, which meant opportunities to bulk buy and negotiate lower costs were missed.

* What do you think? We want know - get in touch by email, messageboard or by sending a web letter to the editor *

Figures produced by Paul Higgins, the assistant director of corporate services, showed the council paid #20 million to 104 different building firms, many of them locally based.

Mr Higgins admitted he did not know how many transactions were on a contract basis, although initial work put the figure at only four per cent.

Just over #6 million was spent on equipment for schools, with the council paying 25,000 invoices to 223 suppliers.

There were 1,400 transactions for white goods - typically, fridges, freezers and washing machines - with 27 outlets supplying goods worth #560,000.

Mr Higgins said the council's procurement rules meant only purchases above #100,000 were subject to full tendering procedures. "The lower level spend is not something we have any input into," he added.

The council could find itself in a difficult position if it decides to reduce drastically the number of firms supplying goods and services, since 34 per cent of the total spend is with Birmingham-based companies.

More than 60 per cent of construction work, worth #126 million a year, is handed to local firms.

Mr Higgins warned: "There are firms at risk as they are dependent on council work for a significant proportion of their turnover and may be vulnerable to aggregation or changed procurement activity."

The scrutiny committee inquiry found transactions conducted on a non-contract basis were routinely more expensive than on a contract basis. A five-year leasing deal for a photocopier on a contract negotiated by the council cost #10,740, compared with #14,540 for a non-contract deal.

Temporary office staff employed through a contract with an agency cost #7.64 an hour, compared with #9.90 an hour on a non-contract basis.

Committee member Alistair Dow questioned whether all procurement spending was necessary.

Coun Dow (Lib Dem Selly Oak) said: "I don't believe we really need to buy desks at the rate of 200 a year. We may be buying for reasons of style and decor rather than out of necessity."

Coun Mick Wilkes (Lib Dem Hall Green), chairman of the committee, stressed the need to protect as far as possible local suppliers and said he would like to see more work given by the council to Birmingham-based firms.

Coun Wilkes added: "We should be aiming for a strong interface between procurement and regeneration, depending on where in the city we do our spending. If we spend in an area then there will be a knock-on effect which will lift the area up."