Public procurement can tackle youth unemployment

We know that poverty in the UK is growing, and that social mobility is declining – trends that are likely to continue even as the economy improves. We also know that there are too few job opportunities, and too few chances for in-work development, for young people here. In total, 17% of 18-24 year olds are out of work (the percentage is higher in many communities) and many more are in dead-end jobs.

A new JRF report by Richard Macfarlane – Tackling Poverty Through Public Procurement – shows how these problems can be tackled.

This report offers many practical examples of how clauses inserted into any public procurement contract can require the contractor to provide targeted training and job opportunities, which can be focused on poor people and poor places. And these mechanisms comply with UK and European procurement rules. Case study examples include:

• Glasgow Housing Association: Through clauses in 35 contracts, 60,000 weeks of employment have been created for 1,158 apprentices and trainees: 48% of these opportunities have been taken up by the city’s most deprived areas.

• Birmingham City Council, Library of Birmingham: The council included jobs and skills requirements in the £193m library contract. This resulted in 306 jobs for Birmingham residents including 82 apprenticeships. 54% of these opportunities were taken up by residents of priority areas.

Why not just leave employers to target marginalized jobseekers on their own, without imposing special clauses in their contracts?

With a big pool of skilled and experienced people available, from an increasingly wide labour market, evidence shows that few employers left to their own devices are likely to home in on the least experienced and most excluded jobseekers. The Scottish and Welsh governments have already recognised the potential of public contract clauses to provide routes into work for marginalized young jobseekers, and developed policies and practices that help and encourage these approaches.

In many ways the mechanisms described in this report can be seen as heaven-sent in an age of austerity and public spending cuts, where public resources for tackling poverty are vastly reduced. These provisions also fit very well with the English coalition’s localism policies. They provide a way of targeting help at excluded communities at no extra cost to the public purse. Sustainable development policies provide a clear framework for public bodies that want to use their procurement capacity to tackle poverty. There is a commitment to this in Scotland and Wales, and an emerging approach in Northern Ireland. In England, the public services (social value) act 2012 has the potential to improve the position.

However, there is more to be done if clauses in public contracts are to be used more widely. The approach has not yet been adopted by central UK government agencies. There is a case for government developing more explicit powers if the use of clauses is to become a core requirement. And last but not least, the mainstreaming of this approach requires strong political leadership.