The business case for social procurement
Social enterprises can provide equal quality service at a competitive cost while delivering long-term social outcomes, recent research by AMES and Urban Communities suggests.
Recent research by AMES and Urban Communities suggests that social enterprises can provide equal quality service at a competitive cost while delivering long-term social outcomes.
Urban Communities contracted Magic Green Clean (MGC), a social enterprise run by AMES, to provide commercial cleaning services for the Kensington Redevelopment project. According to AMES CEO, Catherine Scarth, they received top‐notch and cost‐effective service. She adds that they also helped train and employ long-term unemployed jobseekers from the local public housing estate.
“This is a call to action for local, state and federal government to support the social enterprise business model,” AMES CEO, Catherine Scarth states. “Right here is a case for social procurement.”
The social impact assessment and economic modelling undertaken shows that accrued economic benefits include a growth in wages, which means more taxable income for the government, significant savings for the government in unemployment benefits and a substantial increase in the number of traineeships available for disadvantaged jobseekers.
The research was supported by the Department of Education, Employment and Workplace Relations (DEEWR), VicHealth and Urban Communities, following the progress of the Magic Green Clean (MGC) social enterprise in Kensington in Melbourne’s inner northwest. The project provided a group of long-term unemployed people traineeships in Asset Maintenance (Cleaning) and transitioned them into ongoing full-time and part-time employment.
Urban Communities asset manager, Ashley Lance comments that “cleaning is of a better standard, attention to detail is better”.
The research also uncovered that a more preventative approach to maintenance is being practised by the social enterprise trainees, potentially saving Urban Communities 11 percent in costs over three years.
For the long-term unemployed involved in the project, increased employability and overall improved health and wellbeing are all visible outcomes. As well as having a new training credential, trainees also reported better communication and teamwork skills, improved confidence, ambition to increase education levels and the desire for long-term, full-time work.
For copies of Social Enterprise: Making it Work a guide for establishing social enterprises and summary and full copies of the paper A Case for Social Procurement, follow this link to the AMES website: www.ames.net.au/research-and-policy/research.html.