Tuesday, 29 Mar 2022  |  Reading time:  12 mins  | Read online

Social procurement

This week’s edition of Global Local focuses on how local governments can use their public procurement powers to improve social outcomes, both within their communities and throughout the supply chain.

Public procurement accounts for between 12% to 20% of global GDP – representing up to 11 trillion US dollars per year. Subnational governments are in charge of decision-making for around 50% of public procurement, creating a significant opportunity to ensure that procurement spending is responsible and transparent.

Over the last 20 years, increasingly visible societal and environmental challenges have led many governments to reconsider their procurement practices and expand their selection criteria to include social and sustainable factors as well as price and quality. This new social procurement model is centred around procuring high-quality services that represent the best value long term for the government and community, not just the lowest price.

What is social procurement? Socially responsible public procurement (SRPP) is “about achieving positive social outcomes in public contracts,” as defined by the European Commission. SRPP can drive positive social outcomes through creating employment opportunities for marginalised groups, making services more accessible, and/or ensuring goods are provided through ethical supply chains that respect human rights.

What can local government do? Mechanisms supporting SRPP at a local level can include reserved contracts, social clauses to support employment of specific groups or people at risk of labour market exclusion, and additional policies to make it easier for social enterprises and non-profits to access public contracts. However, there is no one-size-fits-all approach.

Who inspired us this week? We loved the Australian Government's Indigenous Procurement Policy and how it can act as a model for local government, advice for ethical ICT procurement from Stockholm, Sweden, and the holistic approach to social procurement taken in Auckland, New Zealand.

What is the Local Government Information Unit?
We are a non-profit, non-partisan organisation for anyone with a passion for local democracy and finding local solutions to global challenges.
Click here to find out more about Global Local from LGIU

This week's featured briefing

Leveraging social procurement to close the gap

By Ella Sutton, SGS Economics and Planning

The difference between the social, economic, and health outcomes for Indigenous and non-Indigenous Australians continues to be a pressing national issue. Despite progress being made since the introduction of the Closing the Gap framework, some indicators reveal stagnation while others, worryingly, show a worsening of outcomes.

Looking at this issue through a community wealth building lens, it is apparent that local governments have an important role to play in supporting Aboriginal and Torres Strait Islander peoples. In Australia, local governments are considered anchor institutions due to their significant local budgets, land, and assets, and their role as purchasers and employers. Their inherent place-based nature is also a critical factor. Councils can therefore play an important role in Indigenous economic development due to their capacity as large employers and by leveraging their sizeable procurement spending, their infrastructure (including land and facilities), networks, and assets for local benefit.

Social procurement in particular provides an avenue for local government to improve outcomes for Aboriginal and Torres Strait Islander peoples. Many councils already have clauses in their procurement policies to encourage the purchasing of more environmentally and socially responsible goods and services. This is typically administered through applying a 10% sustainability weighting which effectively improves the price competitiveness of a more sustainable tenderer’s offer.

Although this is positive, procurement policy can go much further. If leveraged effectively, it has the potential to take a targeted approach to provide Indigenous Australians with more opportunities to participate in the economy and catalyse numerous direct and indirect benefits.

LGIU Global Local Highlights

 

Put your money where your mouth is: Investing in sustainable regional food systems and communities through public procurement

This brand new blog reflects on a recent event organised by Food for Life Scotland and Sustainable Food Places, which brought together a broad range of organisations working on public food in Scotland – all of whom believe that food procurement is of vital importance in building a better food system.
Read this blog here.

Cork's Smart Procurement & Planning Strategy for Social Housing Delivery: Chambers Ireland Excellence in Local Government Awards Winner

Cork City Council designed and implemented an integrated competitive dialogue procurement and planning procedure to deliver and construct hundreds of social housing units. The resulting procurement process is an innovative solution to the housing delivery puzzle. 
Read this briefing here.

The Circularity Gap: An opportunity for local government leadership and practical change

This briefing explores how local governments can include reporting on the circularity gap as part of their wider annual reporting processes. It includes links to sustainable procurement guides for state and local government. 
Read this briefing here.

Innovation & Inspiration

Curated case studies from around the globe

USA: Seattle engages female and BIPOC business owners through procurement scheme

A 40-year programme by the City of Seattle promotes the use of women- and minority-owned businesses (WMBE) on its contracts through outreach, engagement, departmental plans, and annual voluntary inclusion goals. The programme is regularly monitored and assessed, including through an annual report and an ongoing disparity survey to ensure that the scheme is driving equity in practice. WMBE can self-identify through the city’s online business directory or seek state certification.
City of Seattle

Europe: Public authorities share learning about ethical ICT procurement

Buyers from 18 European public authorities shared good practices to ensure that procurement of ICT equipment meets environmental and human rights standards in a working group last year. Participant Region Stockholm, Sweden, recommended contractually obliging suppliers to monitor supply chains and follow up on risks, rewarding tenderers that have good practices, and seeking Electronics Watch affiliation. Other participants emphasised the value of cooperation and preparing questions to ask suppliers about their social policies and certification.
Sustainable Procurement Platform / Procura+ Network

Global: Innovative food procurement strategies meet local needs

Local authority innovators from around the globe shared procurement strategies used to improve food access and sustainability in the Power of the Public Plate podcast, run by ICLEI and the UN One Planet Network. Case studies highlighted include integrating indigenous African vegetables into the school procurement system to fight malnutrition in Busia County, Kenya, and a healthy public food procurement policy introduced in Quezon City, the Philippines, to improve access to nutritious food and boost sustainability and community.
The Power of the Public Plate

New Zealand: Auckland social procurement treated as ‘business as usual’

Auckland Council have integrated key socio-economic outcomes into their procurement policy and practices through setting objectives and targets, inspired by global best practice. Key objectives include transitioning to net zero, designing out waste, and improving access to business and contracts, particularly for regional, Māori- and Pasifika-owned businesses. Requirements for an Auckland Transport construction project included a targeted employment strategy for people who are Māori, Pasifika, women, and/or from minority groups, supported by skills, training, and a wage strategy.
New Zealand Government Procurement

More best practice case studies

  • The European Commission has brought together 71 good practice cases of social procurement globally across a range of areas including construction, healthcare, and cleaning services.
  • Buy Social Canada's guide to social procurement includes examples of policy and case studies from across Canada, as well as worksheets and answers to key questions.

Think Tank Review

This week, we’re highlighting a selection of reports connected to social procurement from our Think Tank Review: a monthly survey of the freshest thinking on local democracy and governance worldwide.
You can read the latest edition in full here.

Serving the Citizens—Not the Bureaucracy (The Chicago Council on Global Affairs, USA)
This report looks at how city procurement could be an engine for change and improving lives locally, but would require a different approach to developing procurement and procurement teams.

True value: Towards ethical public service commissioning (Localis, UK)
This report includes a seven point ‘charter’ for ethical local procurement, specifically aimed at English councils but applicable more broadly, and highlights reforms needed for central government to facilitate strategic procurement locally.

Getting the green light: achieving sustainability at a local level (Social Market Foundation, UK)
Although UK local authorities are only directly responsible for 2 to 5% of local emissions, they may have the opportunity to influence up to a third of local emissions through leadership and placemaking. This report explores how local government could incentivise sustainable development through procurement, planning rules, and municipal green bonds.

More from Global Local

Voices from Ukrainian local government

LGIU supported an event with Ukrainian local government colleagues. It was both heartbreaking and inspirational. We highlight key points from the discussion and how local government around the world can help now.
Read about the event here.

Thanks for reading!

Next week, we're sharing a quarterly round-up of the topics we have explored so far this year. In two weeks, we'll look at how local government can design and support age-friendly services and places.

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