Transport for London sub – group individually, you automatically exclude another sub – group. This is a contradiction as our aim was to be all inclusive so I termed them‘ diverse suppliers’”, says Rasheed.
SOCIAL RESpONSIBILITIES 21
Transport for London sub – group individually, you automatically exclude another sub – group. This is a contradiction as our aim was to be all inclusive so I termed them‘ diverse suppliers’”, says Rasheed.
This approach to developing the definitions is unprecedented nationally and internationally. Rasheed pioneered the approach by consulting best practice from around the globe.
In the United Kingdom( UK), Rasheed’ s team cast the net wide to search various government organisations and found that the definitions were limited to size of the supplier in terms of annual turnover and / or number of employees.
The European Union was the most advanced with its definition, however it has not widely used Black, Asian and Minority Ethnic businesses as a sub – group.
The United States( US) has a comprehensive definition of Disadvantaged Business Enterprises( DBEs), though its sub – groups are aligned with the ethnic make – up( e. g. Hispanics and Native Americans), of the country and its history( e. g. Veteran – Owned, Small Business). A similar approach applies in South Africa.
Each of the sub – groups( a to d) which makes up the diverse supplier definitions at TfL is discussed in more detail opposite.
SMEs
SMEs have been considered as they frequently face barriers of entry when trying to win business with large organisations. TfL has defined Small and Medium Enterprise as follows:
A Small Enterprise is a business which has both the following: i) 0 – 49 Full Time Equivalent employees 1; And one of the following: either ii) Turnover 2 per annum of up to £ 6.9 million( up to € 10 million 3); in the last financial year; Or iii) Balance sheet total 4 of up to £ 6.9 million( up to € 10 million 3).
A Medium Enterprise is a business which has both the following: i) 50 – 249 Full Time Equivalent employees 1; And one of the following: either ii) Turnover 2 per annum of up to and including £ 34.3 million( up to € 50 million 3) in the last financial year; Or iii) Balance sheet total 4 of up to and including £ 29.4 million( up to € 43 million 3).
A Large Enterprise is a business which has both the following: i) Over 250 Full Time Equivalent employees 1; And one of the following: either ii) Turnover 2 per annum over £ 34.3 million( over € 50 million3) in the last financial year; Or iii) Balance sheet total4 of over £ 29.4 million( over € 43 million3).
The development of TfL’ s SME definition was derived from the Companies Act of 1985 5, the European Union( EU) 6 updated definition and the Department of Trade and Industry’ s( DTI) 5 definition for SMEs based on adaptation of the EU definition. Whilst the EU definitions are non – binding on Member States, it is good practice to adopt them.
1
Full Time equivalent employees are expressed in hours per week. TfL refer to standard UK hours of work as full time workers – i. e. those who work 35 hours a week and 52 weeks a year( including annual leave)
2
Turnover is in line with that defined in the Companies Act 1985. The amounts derived from the provision of goods and services falling within the company’ s ordinary activities, after deduction of: i) trade discounts Ii) value added
3
Based on the exchange rate £ 1 = € 1.46
4
Balance Sheet Total is refer to the value of the company’ s main assets.
5 www. sbs. gov. uk
6 http:// ec. europa. eu / enterprise / enterprise _ policy / sme _ definition / index _ en. htm