Mayor pledges to use GLA spending power to create an equal London

The Mayor of London, Sadiq Khan, has unveiled bold plans to use the £9.5bn combined purchasing power of the Greater London Authority Group to help make the capital greener and fairer for all Londoners.

The Responsible Procurement Implementation Plan will support the Mayor’s commitment to helping small businesses thrive and to achieving net zero for London by 2030, by embedding new requirements in all contracts with suppliers to the GLA Group - which includes Transport for London (TfL), the London Fire Commissioner, the Mayor’s Office for Policing and Crime (MOPAC), the London Legacy Development Corporation and the Old Oak and Park Royal Development Corporation (OPDC).

As a result of these changes:

• All suppliers of contracts over £5m must provide carbon reduction plans
• New contracts from 2025 will require zero-emission deliveries to GLA Group sites
• The GLA Group will work towards purchasing 20 per cent of goods and services from small and medium-sized enterprises (SMEs) either directly or indirectly, in line with the London Anchor Institutions Charter. This ambition will involve further work to understand the constraints, deliver and effectively measure.
• Suppliers are expected to be willing to have trade union recognition agreements.
• And tenders above certain values, will have a minimum of 10% weighting applied to Social Value which recognises bidders who will deliver community, environmental and local economic benefits.

The GLA Group will also double the number of suppliers accredited to the Mayor’s Good Work Standard from 26 to 52 and create 500 new supply-chain apprenticeships per year, prioritising diversity.

The new policy is already having a positive impact across the GLA group, including:

• Design and architecture contractors bidding for contracts with the LLDC must commit to developing work placements and internships that pay the London Living Wage. These jobs are targeted at students living in the local area and those from under-represented communities. More than 40 young people studying for construction or design related degrees have secured placements and over 80 per cent of them are from Black, Asian or minority ethnic communities.
• TfL’s Supplier Skills programme, introduced to tackle skills shortages and under representation in transport and infrastructure, helped 868 new apprentices start their careers in 2021/2022. Half of the apprentices are from a Black, Asian or Minority Ethnic background. This is as a result of a requirement built into the suppliers’ contracts - suppliers working with TfL need to create skills and employment opportunities, through apprenticeships, placements and school visits, that are in direct proportion to their value of the contracts.

This initiative complements the responsible power purchasing agreements that the GLA Group is pursuing to buy clean energy. The first tender, issued in June by TfL, aims to purchase approximately 10 per cent of TfL’s required electricity from renewable energy sources and new build assets. Subject to a successful procurement route being developed and agreed, further tranches of energy purchasing by the GLA Group, linked to a financing offer, will be brought to market.

This work is an illustration of the Mayor leading by example as part of London Anchor Institutions’ Network. The Anchor’s Network is made up of 16 of the capital’s biggest organisations. Members of this group have pledged to spend up to 20 per cent of their annual procurement budgets on small businesses based in the capital. More than £125m has already been pledged towards supporting micro and small businesses, voluntary, community and social enterprises and local supply chains in 2022, with an additional £1.17bn anticipated across the next three to five years.

The Mayor of London, Sadiq Khan said: “As a group, the GLA has immense purchasing power and we can harness that to directly support the capital’s small businesses and contribute to making London net zero by 2030. We need to implement bold initiatives to ensure that the decisions we make help to build a better London – a safer, fairer, greener and more prosperous city for all Londoners.”

Stuart Harvey, Chief Capital Officer at TfL, said: “TfL has an extensive supply chain which supports diverse businesses of all sizes across the UK. This plan means that in partnership with our suppliers, we are leveraging our purchasing activity to address the socio-economic and environmental challenges facing London and the UK, meeting the Mayor’s ambitious Net Zero targets and aligning to our own strategies and objectives. Recruiting diverse and talented people is one of the biggest challenges many industries face and we are already seeing how our work is making a lasting change to address skills shortages and under-representation in our extensive supply chain, while supporting the UK’s recovery from coronavirus.”

Lyn Garner, Chief Executive, LLDC said: “The money we spend on behalf of the taxpayer is not just about finding the cheapest price, but finding suppliers who will add value to our contracts. We’re able to embed carbon reduction initiatives into the work we commission as well as support local businesses through the supply chain. We’ve also been successful in contractors committing to pay the London Living Wage alongside delivering job, skills and training opportunities for local people.”