A new report by the Joseph Rowntree Foundation “Tackling Poverty through Public Procurement” suggests public procurement can help fight endemic poverty – particularly young people with bleak employment prospects.

The report, which was specifically targeted at poverty in the UK, but which could apply in many US states – promotes the concept that by opening up public procurement to smaller, localized enterprises, there would be the opportunity for job growth in the lower economic brackets. Although some may argue that this concept is public aid more than public procurement, there are significant social benefits of removing barriers to smaller enterprises. The report’s three main proposals are:

  1. That the public sector pledged to generate a year’s work for a person from a disadvantaged background or group for each £1m in contract value.
  2. Recruiting local people from disadvantaged groups involves little or no extra cost, boosts the local economy, and results in a skilled and committed workforce which benefits contractors.
  3. Small and medium-sized enterprises (SMEs) face barriers in competing for larger contracts, despite being in an advantageous position to deliver social and community benefits. By distributing tasks within large public contracts, the opportunities will increase for SMEs to tender successfully.

A program similar to the report’s proposals has already been trialed in the city of Chicago, where construction contracts were offered for tender with the proviso that a percentage of workers were drawn from the neighborhoods in which the project was to be constructed.

The report also refers to Derry City’s “Kickstart 2 Work” program, which acknowledged that the lack of recent work experience was a barrier to the long-term unemployed for finding a job, and offered proportionally paid employment to participants over a 50-week period.

It is difficult to argue with the goals expressed in the report, and it could be possible that public procurement can help fight poverty for people from disadvantaged backgrounds or groups.