The Go-Ahead Group is promising to increase spending with small and medium sized businesses across all 12 of its UK bus and rail operating companies.
In a programme aimed at helping small businesses bounce back from the pandemic, the firm says it will spend at least £250 million with SMEs each year from 2022.
A range of initiatives are to be introduced to make business opportunities easier to identify, to reward valued suppliers and to make contracts simpler including a new company SME champion, a guide on how to do business with the company, a short contract written in plain English and a commitment to publish an 18-month forward pipeline of forthcoming tender opportunities.
Go-Ahead says it works with more than 3,200 SMEs, which represent 75% of the company’s suppliers. SMEs include smart ticketing software suppliers, independent rail station cafes, mobile app providers, infrastructure improvement suppliers and bus spare parts providers.
One-third of Go-Ahead’s influenceable spend (c. £247 million) was focused on SMEs in 2020. Influenceable spend refers to all spending outside of required industry costs (for example, rail access charges) or contractual agreements which cannot reasonably be switched to SMEs – for example, procurement of rolling stock, buses or fuel.
Go-Ahead says the pandemic has disproportionately affected SMEs in comparison to large businesses – with 70-80% of SMEs experiencing a drop in revenue since February 2020 – some by up to 50%, so the Group plans to spend an extra £15 million and to bring in 100 new SME suppliers by the end of 2023, bringing the proportion of SMEs among its suppliers up to 77%.
(Picture – Go-Ahead)