Governments should leverage their buying power to help mitigate some of the impacts of the COVID-19 pandemic through social procurement, according to a new report.
With the federal government having spent $64.5 billion procuring goods and services in 2018–19, and in light of the impacts of COVID-19, a new paper released by the Victorian Parliamentary Library and Information Service has argued that the government could use its purchasing power to generate positive social, economic and environmental benefit.
The potential for social procurement to create inclusive employment “represents a truly unmissable opportunity” as Australian governments prepare their policy responses to tackle the challenges posed by the pandemic, the report said.
“By involving social benefit suppliers in their supply chains or using contractual obligations as a way of incentivising employers to take on jobseekers experiencing disadvantage, public bodies can help create employment opportunities through their goods, services and infrastructure contracts,” it stated.
“Furthermore, as the federal government prepares itself for a new employment service system in the coming years, social procurement provides an opportunity to initiate the types of employer-focused job creation initiatives that are needed to tackle long term unemployment.”
Report author Maria Mupanemunda suggested that one action the federal government could take is “exploring the benefits of making social value mandatory”.
Reforms such as the United Kingdom’s Public Services (Social Value) Act 2012, would “explicitly integrate social and environmental objectives into value-for-money purchasing principles” and “legitimise social procurement as a strategic policy tool for incentivising inclusive hiring practices”, the report said.
A number of conditions must be met in order for social procurement policies to fulfil their potential, the report noted.
For example, purchasing officials must receive adequate resources, such as skills training, to effectively carry out strategic public procurement.
“Without these technical skills, it is difficult for purchasing officials to effectively manage their strategic procurement processes,” the report said.
A supportive policy environment that encourages social procurement policies and the growth of social benefit suppliers is also needed.
Actions governments could undertake include supporting employers in the social benefit supplier sector to build capacity to take on marginalised jobseekers, and regularly evaluating existing social procurement policies to ensure they tackle long-term unemployment in meaningful ways.
“Governments must lead by example and demonstrate how, through strong leadership, they are building the foundation of thriving social procurement policies,” the report said.
“Cross-party political commitment is also needed to develop policies that successfully link government spending to employment policy objectives.”