Industry-wide Expenditure Transparency Charter mooted to improve procurement

The group suggests that an industry Expenditure Transparency Charter should become part and parcel of future contracting competitions.

The proposal was made on the back of two surveys that the group carried out on behalf of the government to support the rail industry and accelerate rail priorities.

Key findings from the surveys include:

• If the effects of Covid-19 were to continue for up to 12 months, only 62% of respondents would be confident of their organisation’s survival, falling to 52% if the crisis goes on for longer. Although there is an increase in confidence since Spring 2020, the levels remain a cause for concern.
• The availability of labour and skills as a barrier to recovery is now more important than last summer and was identified by 35% of businesses, compared with 26% in Spring 2020.
• The pilot projects have shown ‘improving work pipeline visibility’ is a key enabler for increasing productivity in the short-term in relation to planning efficiencies and resource utilisation; but also, in the long-term when looking at training, apprenticeships, staff retention and facilitating innovation.
• Each pilot project showed there is sufficient information already available to provide in-flight visibility of their work pipeline that could be shared with the supply chain, incurring minimal or nil cost, enabling forward planning horizons to be increased significantly.

The group has also committed to developing four plans further including the expenditure charter. They are:

1. Establish an Industry Expenditure Transparency Charter to be signed by at least 250 organisations so it becomes an integral part of current contracts and future procurement.
2. Extend the equivalent of the work pipeline visibility commitments in the Network Rail SME Supplementary Action Plan to more suppliers.
3. Build on the alignment with the Construction Playbook which emphasises Strategic Supplier Relationship Management and Successful Relationships.
4. Demonstrate the value of taking action to increase work pipeline visibility.

Rail Supply Group chair Philip Hoare said: “It is great to see the resilience shown by businesses right across the sector which have quickly adapted to new ways of working and are determined to survive this crisis.

“The situation remains challenging for a significant number of suppliers, but I believe the sector can be stronger as it emerges from the pandemic.”

He added: “It’s evident that rail suppliers need confidence in order to invest in their people, skills, services and new ideas, and now there is an indisputable appetite and commitment from the biggest project sponsors to provide that confidence.

“What’s clear is that collaboration must now filter down the supply chain to make this visibility real at all stages of a project. The next step is to develop an industry-wide Expenditure Transparency Charter as part of future procurement and contracting processes.”

Business minister Lord Callanan added: “It is good to see signs of confidence beginning to return to the rail sector, in part thanks to the role the Rail Supply Group has played in taking swift action to support the industry.

“Establishing a visible pipeline of work is a great example of industry-wide collaboration in practice, with some of the rail industry’s largest clients and many of their suppliers committed to far more transparency. This move should help to increase productivity and competitiveness and help the UK build back better.”

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