To the rescue: opportunities for connecting council procurement and social enterprise

Person crossing the street in evening in front of building

Andreas Cebulla

COVID-19 is refocussing minds on the risk that major health, environmental, economic or social disruptions can pose to supply lines, from the availability of everyday items stocked in local shops to access to essential items for central services.

COVID-19 has also highlighted the susceptibility of society to secondary harms resulting from these disruptions. Not for the first time has a health emergency closed borders, stalled economies, raised unemployment and underemployment to new, if not entirely unprecedented, levels. Those most severely affected are, once again, the young and women. But the circle that defines vulnerable people and communities has also been widened, including many previously deemed safe from job loss.

These circumstances have triggered a search for new ideas and indeed the adoption of previously, by some stakeholders and commentators, unimagined and unimaginable policy interventions. The raise in the value of support payments to those who lost their jobs as result of, or even before, the onset of the pandemic is one obvious example. As previous contributions to the Economic Policy Forum have argued, the repercussions of COVID-19 may be long term – and pose major challenges.

Whilst the focus is often on business, and on supporting business, to find its way out the crisis, local councils in South Australia have also been asking what they can do to support their local economies and help them recover.

SACES has just released a document designed to assist councils with identifying opportunities for using their procurement for better social and economic outcome. The toolkit, produced with the financial support of the Local Government Association of South Australia, shows that local councils are already using local versions of the SA state government’s Industry Participation Program to leverage additional social and economic benefits through procurement contacts (such as committing contractors to use local labour or local job seekers as a proportion of their workforce). Councils also already engage directly with social enterprises and thus provide employment opportunities for vulnerable populations, including people with disability, unemployed youth, and Aboriginal communities.  

The toolkit illustrates with examples how councils can identify social procurement opportunities from within their budgets, using tools such as the Supplier Social Value Positioning Model (see figure below), and where to find potential social suppliers. Engaging social suppliers offers opportunities to support those most disadvantaged and, in the current climate, most vulnerable. Increasingly social suppliers become indistinguishable from conventional business – except for their social agenda and frequent commitment to reinvest resources into the business (thus helping it to sustain or grow) and local economy and society (helping both to flourish).

The supplier social value positioning model

Opportunities aside, the onus on realising potential is not solely on councils, but is also on the social enterprise sector. It needs to grow, diversify, become yet more noticeable as a model in that councils can safely invest; a model they can trust, that does not risk displacing existing business, but can genuinely add new products, services, and new value. This can be achieved collaboratively: councils working with social enterprises; councils working with councils to put themselves in a stronger position to provide sustainable opportunities for doing business with social enterprises; councils linking their own strategic (community) objectives to their procurement strategies; social enterprises connecting amongst themselves to create value chains. This is a long-term project, but one with a role to play now, as we attempt to repair the pandemic’s damage, and beyond as we re-discover the Entrepreneurial (Local) State.1

Notes: 1 Mariana Mazzucato (2018) The Entrepreneurial State. Debunking Public vs. Private Sector Myths, Penguin Books Ltd.

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