NETWORK RAIL

SME SPEND DATA

SME spend data 2019/20

Key points I wish to highlight are:

· In 2019/20, Network Rail spent £2.52bN with SMEs. This equates to 35.6% of our £7.1bn expenditure. The 35.6% splits equally between direct spend and indirect spend.

· If we were to exclude traction and non-traction electricity spend from the calculation, Network Rail’s relative SME spend in 2019/20 would increase to 38.5%.

· Network Rail direct spend with SMEs has increased from 12.77% in the 2017/18 FY to 17.8%in the 2019/20 FY. In the same period direct numbers of SMEs we contract directly with has increased by 5.03%.

· During the indirect SME spend data gathering exercise, Network Rail received a 97% response rate from our top 110 Tier 1 suppliers (by spend).

· Network Rail indirect spend with SMEs (via Tier 1 suppliers) has increased from 14.0% in the 2017/18 FY to 17.8% in the 2019/20 FY.

· We remain on target to achieve the Government target of 33% spend with SMEs by 2022, although I anticipate a Covid-19 related dip in the current financial year before recovery in 2021/22.


With regard to the numbers of SMEs we contract with directly:

· During the 2017/18 financial year Network Rail contracted directly with 3958 suppliers. 2611(66%) of these were small to medium sized enterprises

· During the 2018/19 financial year Network Rail contracted directly with 4011 suppliers. 2855(71%) of these were small to medium sized enterprises.

· During the 2019/20 financial year, Network Rail contracted directly with 4246 suppliers. 3051 (71.9%) of these were small to medium sized enterprises.

· The number of direct contracts with SMEs have increased by 440 over the last 2 years (from 2611 to 3051).


The graph below shows progress against the Government SME spend target of 33% by 2022

From: Ken Blackley - Commercial Director, Route Services