Danny Kinahan – 2015 Parliamentary Question to the Department for Transport

The below Parliamentary question was asked by Danny Kinahan on 2015-10-27.

To ask the Secretary of State for Transport, what steps he has taken to reduce barriers to small and medium sized enterprises supplying new products to the Highways Agency.

Andrew Jones

Highways England has set up an Engagement Council to ensure all highways suppliers, wherever they sit within the supply chain network, can have a voice and show leadership in identifying waste (cost, time and quality) and improvement to deliver better value.

Engagement Council

• Membership extends to all highway suppliers wherever they sit in the supply chain for Highways England contracts
• Prime route for collaboration
• Promotes innovation and improvement

Other ways which Highways England encourages SME involvements in its supply chain are:

• The use of Constructionline – a case study recently published by Constructionline recognises the benefits it brings to removing barriers through our Meet the Buyer events which allow us to directly engage with SMEs. This helps to identify potential tendering opportunities and give advice on the tendering process.
• Contract clauses – A standard contract clause included in our Model Contract documents to encourage the use of SMEs by our Tier 1 suppliers.
• Project Bank Accounts (PBA) – Highways England promotes the use of these on all contracts (unless there is a compelling reason not to do so) benefitting suppliers from a significant acceleration in payment of their monthly invoices.

Current PBA data at August 2015

• 48 PBAs in operation for live schemes.
• PBA total declared contract value of £4.66bn as of August 2015.
• In the first quarter of 2015/16 27% of the overall scheme spend is with SMEs. This data however is only based on those SMEs included in the PBAs and does not take account of spend with SMEs in the extended supply chain which could significantly increase this %.

Highways England is currently developing an SME mentorship scheme alongside key industry associations as well as the larger contractors operating on the network. The scheme will allow SMEs the chance to develop their capability and help to create an environment which removes barriers to market allowing them to operate effectively. Health & Safety, innovation and leadership will be key elements of the scheme.