Network Rail spending with SMEs surpasses £2.5bn in 2019-20

Network Rail spending with SMEs surpasses £2.5bn in 2019-20

Britain’s rail industry has a key part to play in its economic growth, and in light of current Covid-19 outbreak, also its recovery. The railway allows people to get to work, businesses to markets, and people to their families and friends.

It also carries goods worth over £30 billion each year, bringing food to shops, building materials to construction sites, and fuel to power stations. Even for those who never use a train, the railway makes everyday life possible.

In the 2019-2020 financial year, Network Rail spent 35.6% of its total £7.1 billion expenditure with small and medium-sized enterprises (SMEs), surpassing the government target of 33% of yearly expenditure to be spent with SMEs by 2022. In real terms, this equates to a total of £2.22 billion and is the first time Network Rail has topped £2.5 billion in a single financial year.

The number of suppliers contracted directly by Network Rail was 4,246 in the 2019-2020 financial year, of which 3,051 (71.9%) were SMEs, reflecting an increase of 440 more SMEs than in 2017-18 (2,611).

Network Rail’s direct spend with SMEs increased more than five per cent from 12.77% in 2017-18 to 17.8% in 2019-20.

Clive Berrington, Network Rail Commercial and Procurement Director, said: “Our extensive supply chain network plays a vital part in helping us run a safe and efficient railway and accelerate innovation to make Britain’s railway even better for passengers and freight users.

“We have focused a lot in the past two years to ensure Network Rail is more accessible to the SME market. We now work directly with over 3,000 SMEs, ranging from technology companies that design innovative solutions to keep the railway running safely to catering companies that replenish our teams working through the night.

“Since establishing our SME action plan in 2019, we have also launched several initiatives to make Network Rail ‘easier to do business with’ and these results demonstrate we are on the right track. We have developed initiatives to make us more dependable and easier to work with by working smarter with our supply chain and involving them earlier in the planning phase to help us deliver work more efficiently. These initiatives include improved contracting strategies.”

Rail Minister, Chris Heaton-Harris, said: “More than ever it is vitally important that we support smaller businesses right across the country.

“I’m delighted that Network Rail has gone above and beyond the targets we set them, supporting jobs and smaller businesses from engineering to the service industry.

“Our railways have long been the lifeblood of this country and supporting thousands of smaller businesses only adds to that.” 

Details of Network Rail’s procurement pipelines is updated every four weeks and is available to view on Network Rail’s website.

Image: Network Rail 

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