Warwickshire County Council’s Reform-run cabinet has approved the procurement of a three-year Microsoft 365 licence renewal worth about £9m. The move was dubbed “blackmail” by its former leader as the approval went through.

The decision report – introduced by Reform councillor Michael Bannister – commits the council to a renewal agreement that runs from June 2027 to May 2030. The cost is roughly £3m a year, and that’s about £375,000, or 15%, more than the council pays currently. Bannister attributed the rise principally to Microsoft’s pricing changes across the public sector, after the previous renewal had deferred increases by continuing existing national pricing arrangements.

Warwickshire County Council – which rolled out Microsoft cloud in 2019 – buys through the government’s Microsoft aggregation route, which uses collective public sector buying power to secure pricing. Confirmation of the award is subject to a licence count review of active users, allocations and optional products.

The report prepared for council cabinet approval describes the licences as “business critical”, in that they underpin “core productivity, collaboration, information management, security and analytics capabilities”, as well as cyber security, data protection and the groundwork for automation and artificial intelligence. Around 900 licences are to be charged to the relevant business areas, with further optional products potentially pushing the cost higher.

Green councillor Keith Kondakor, who represents Weddington, framed the decision as paying Microsoft for software the council would not own. Holding up a floppy disk he bought more than 40 years ago, he said: “When we bought Microsoft products in 1983, we owned them. You couldn’t get trapped, because once you bought your DOS, you got your DOS.”

His point was to draw a contrast with today’s subscription licensing. “The problem now is that we’re getting trapped into paying licence fees. We licence for a year or three years and then Microsoft can whack the price up,” he said.

He noted the French government is moving away from Microsoft, and warned: “If you are beholden to an American corporation, things can change.”

Rob Howard, Reform UK’s former council leader now serving as portfolio holder for economy, replied. He did not dispute the framing. “You’ve echoed what we were talking about in our pre-meeting,” he said. “I think we are all shocked about the amount of money this is going to cost us. We have no choice on this occasion, I’m afraid.”

His reasoning was that there was too little time to stand up an alternative before the May 2027 expiry. But he accepted the longer-term risk. “You’re right, we don’t want to be held with this sort of blackmail over the next 10 years. It is going to be more next time round,” he said.

The exchange came as the Competition and Markets Authority (CMA) considers designating Microsoft’s business software ecosystem with strategic market status, while Microsoft contests the premise of the investigation.

The report warned that failing to approve the procurement risked “poorer commercial outcomes and disruption to essential digital services”. It also flagged that the agreement may overlap with local government reorganisation, with licence numbers, transfers and potential duplicate costs to be resolved before award.

The decision approves the procurement in principle. Any actual award rests with the executive director for resources, subject to affordability, completion of procurement and legal and financial assurance, while the extra £375,000 a year still has to be found within the budget.