How Local Councils are leading the charge in social procurement

How Local Council are leading the charge in social procurement

Written by Kris Spann, Social Procurement Advisor and Matt Panayi, State Lead QLD/NT - Social Traders

Social enterprises are businesses that exist for good. Procuring goods and services from social enterprises is a way to align and deliver multiple strategic economic and social objectives across local government. Social procurement is an untapped resource for Local Councils to drive wellbeing and environmental outcomes, improve equity and free up government resources that are much needed elsewhere.  

Social enterprise procurement is a ready-made solution to use existing spend to achieve social impact and better enhance community wellbeing. 130 businesses and governments around Australia have already committed to social enterprise procurement, including three state governments (VIC, NSW and QLD) and 11 local councils (including Brisbane City Council and Logan City Council). 

Since FY 2018 when Social Traders began facilitating social procurement activities between our Business and Government Members and our community of 500 certified social enterprises, we have measured over $607 million in direct procurement spend. Through our Social Impact reports regularly provided to Business and Government members we know that this spend has resulted in 3,730 jobs, 689,000 hours of training and over 16,000 tonnes of waste being diverted from landfill1. 

Social Procurement activity is growing exponentially in Australia and around the world and the time is now for local councils to join the movement and become leaders in this space.   

Brisbane City Council (BCC), for example, has been exemplary in their implementation and growth of social procurement for over 20 years.

• In 2001, BCC signed one of Australia’s first social procurement arrangements with a local social enterprise, awarding spend on a range of parks maintenance services to the Nundah Community Enterprise Cooperative (NCEC). 
• The Nundah Community Enterprise Cooperative was founded in 1998 to ‘create sustainable employment and training opportunities for people with cognitive and/or psycho-social disabilities with profits re-invested in the business to benefit members’ 2.
• The original proposition was of a ‘jobs club’ to generate a range of opportunities for people with learning difficulties to undertake odd jobs such as garden maintenance as paid work. Jobs were identified and allocated to worker members. The work was intended to be part-time and casual to reduce the burden on worker members and infrastructure.

“We often refer to this initial contract as an ‘anchor contract’ as it anchored the fledgling business in securing cash flow and income. This also gave the co-operative a steady supply of meaningful work, along with an excellent source of revenue and a profile in the community. The income generated by long-term park maintenance contracts provided sustainable revenues in those vital first years of establishing NCEC and significantly reduced the workload of its coordinator 3.” 

From this initial contract with Council, NCEC has now grown to hire 35 people and provide 11,000 hours of long term employment annually across 5 different social enterprise initiatives. NCEC was awarded Australia’s best small social enterprise in 2015 and then Australia’s best large social enterprise in 2020 at our annual Social Traders National Game Changers Awards.

Brisbane City Council now have an annual social procurement target of $10 million which they successfully exceeded in the 2021-22 financial year with a spend of $13.7 million 4. BCC continue to work closely with Social Traders through a Tailored Support government membership to uncover new opportunities to work with social enterprises and to harness our range of training programs to empower internal social procurement champions.

As this example shows, Local councils in Australia can play a significant role in growing the social enterprise sector within their jurisdictions. Here are several ways in which local councils can proactively become leaders in Social Procurement:

1. 

    

   Social Procurement Policy & Targets: Local councils can implement social procurement policies that prioritize the engagement of social enterprises in their procurement processes. This involves setting targets or preferences for purchasing goods and services from certified social enterprises. 
2. Internal Training & Education: Educating staff and councilors about the businesses for good movement can provide internal confidence in the capabilities and positive outcomes associated with procuring goods and services from local Social Enterprises. Staff need access to practical guides and processes that are easy to understand and follow to support and sustain the policy in practice.
3. Capability Development: Providing access to tailored supplier readiness programs accelerates the capabilities and capacity of social benefit suppliers, making it easier for local councils to engage with them and to create better outcomes, faster. State governments currently fund accelerator and business development programs which Councils can refer their local Social Enterprises to participate in.
4. Contracts over Grants: Signing contracts with social enterprises provides them with stable foundations to grow their capabilities and continue to win further work in the open market. A core feature of social enterprises is that they derive the majority of their income from trade revenue. Low risk, low value spend items can be an effective way to get initial contracts over the line and build momentum.
5. Measure and Celebrate Successes: Local councils can utilise their communication channels to highlight the positive social and economic impact of social enterprises operating within their communities. Certified social enterprises also measure and report against set social impact metrics which can be included and shared in Council’s own annual reporting.
6. Cluster Development: Local councils can facilitate networking events, forums, and conferences that bring together social enterprises, local businesses, community organizations, and other stakeholders. These platforms encourage collaboration, knowledge sharing, and partnership building, fostering a supportive ecosystem for social enterprises.
7. Business Support Services: As purpose-led businesses social enterprises can benefit greatly from access to local councils existing business support services. Ensuring that social enterprises are included in communications about upcoming workshops, programs, mentoring, support services, funding opportunities, marketing initiatives and tenders help social enterprises navigate the challenges of running a business like any other.

If you would like to build an inclusive economy in your LGA by activating your local social enterprise sector, Social Traders exists to provide you with advice on social enterprise strategy and social procurement implementation. 

Find out how your Local Council can lead the charge in social procurement by visiting www.socialtraders.com.au and arranging an initial consultation with your local Social Procurement Advisor or get in touch via business@socialtraders.com.au

References:

1. Social Traders impact reporting https://www.socialtraders.com.au/our-impact 
2. About Nundah Community Co-operative Enterprise http://www.ncec.com.au/about-ncec/ 
3. Neighbourhood Centres Queensland Case Study https://www.communitypraxis.org/uploads/5/1/0/1/51019687/20230412_ncq_casestudy_socialenterprise_ncec_final.pdf 
4. Brisbane City Council Annual Reports and Financial Statements https://www.brisbane.qld.gov.au/about-council/council-information-and-rates/news-and-publications/council-annual-plan-and-budget/annual-report-and-financial-statements 

Get in touch with Matt Panayi (matt.panayi@socialtraders.com.au) to find out how you lead the charge in business for good.

If your council requires assistance with utilising Local Buy Arrangements as part of your procurement process, please get in contact with our Senior Engagement Managers, Tina Pholi tpholi@localbuy.net.au or Jeremy Walker jwalker@localbuy.net.au. They’re here to help simplify procurement in local government across Queensland.