Social Procurement and Economic Development in Greater Western Sydney

1. Social Procurement and Economic Development in Greater Western Sydney ‘The Business Case’ Chris Newman Director ArcBlue Consulting Chris.newman@arcblue.com.au www.arcblue.com.au 0412 318 384

2. ArcBlue Government Procurement Development Activity across Australia/NZ • QLD Local Government • Gold Coast Capability Development and Contract Management Program • LG Social Procurement Forum • WA Local Government • Procurement Training Program • NSW State Government • Accreditation Program – preparation and assessment • Category Management Programs Procurement Capability Assessment / Development • SA Local Government • Roadmap Program • Regional Development Programs • NSW Local Government • Roadmap Program with LGP • Procurement Leadership Program • Social Procurement Guidelines • Regional Procurement and Shared services Programs • VIC State Government • CIPSA Certification • NZ Government • Departmental reviews Federal Government • VIC Local Government • Procurement Roadmap Development • Contract Management Guidelines and Training • Procurement Leader’s Conference • Federal Government • Contract Management Development • Regional Social Procurement Development State Government Local Government • NZ Local Government • Procurement reviews

3. NSW Social Procurement Action Group (SPAG) • 17 cross-sector organisations working support the growth of social procurement • 2012 Launch of ‘Social Procurement in NSW: A Guide to Achieving Social Value through Public Sector Procurement’ • Social Procurement Australasia (SPA) • A non-profit Association supporting the growing demand for guidance, networking, and development in the social procurement field • Established to increase the social impact of procurement in Australia and New Zealand • Founding Members include: Social Traders, ArcBlue, Eco-Buy, Councils, NSW SPAG, Peak Bodies including the MAV (Vic) and Local Government Procurement (NSW) • Activities: Forums/ events; Website portal – Case studies, research, clauses, guidance; Newsletters; Advocacy, policy development; Training and support

4. Greater Western Sydney – A Picture Population Growth • 47% of the population of metropolitan Sydney live in GWS • By 2036, this will be over 50%. • An increase of 890,000 people in GWS by 2036, compared to only an additional 370,000 for the rest of Sydney.

5. Greater Western Sydney – a Picture Gross Regional Product: • Greater Western Sydney in 2011-12 was $97,150 billion from a total Sydney GRP of $306,172 billion • Employment: • 706,359 people employed in Greater Western Sydney in 2011 from a total of 1,961,823 for the whole of Sydney • Youth Unemployment • 11.2% Sydney - 19% Central-west, 13.2% South-west, 13.5% North-west • 47% of the population of Sydney • 32% of the Gross Regional Product • 36% of the Employment • 75% of the unemployment (97,000 as at Jan 14)

6. Greater Western Sydney – A Picture Employment Containment: • According to the 2011 Census, there were over 724,000 workers residing in Greater Western Sydney • Of these, 516,000 worked in GWS Source: AECGroup 2013

7. Greater Western Sydney – A Picture Employment: • The unemployment rate for GWS at February 2014 was 6.8% while for the rest of Sydney the rate was just 5.0%. • Participation rate for GWS was 63.6% compared to 68.3% for the rest of Sydney. • The Industry Employment Mix is changing

8. Greater Western Sydney – A Picture • Education Levels • Proportion of people with post-school qualifications: Overall in metropolitan Sydney 55%, while in GWS 46.8% • GWS has a lower proportion of people with degree qualifications and a higher number of people with certificate qualifications.

9. GWS - Critical Challenges and Opportunities • Job Creation • Creating jobs for GWS residents, particularly local and regional jobs • Business Development • Developing opportunities for and the capacity of local and regional businesses and attracting businesses to operate and employ in GWS • Economic Participation • Creating and sustaining opportunities for economic participation for those excluded or disadvantaged • Specific groups e.g: • Place-based disadvantage (social housing, specific areas) • Aboriginal community • Disabled – physical/ intellectual • Long-term unemployed • CALD communities/ refugees • Young people

10. New Approaches to Achieving QBL Objectives • All levels of Government & (Private Sector) have social, economic, environmental and Leadership/ Governance objectives (QBL) • Traditional ‘silo’ approach to achieving objectives • Innovation – Complex issues require new models • New ways to address complex, multi-causal and long-standing community, economic and environmental issues • Integrating QBLS objectives into procurement, service design and employment • For Government these may include: • Breaking cycles of long-term disadvantage • Providing genuine pathways to training and sustainable employment • Achieving ‘Zero Waste’ and carbon footprint reduction targets • Driving local and regional economic development outcomes

11. Strategic Procurement • Procurement is how we spend most of our money • NSW – State Gov’t $25bn and Local Gov’t $9bn each year • Service delivery, community and civil infrastructure • GWS Local Government expenditure estimate of $1.5bn/ year • Private development – housing and infrastructure • Major Projects • Procurement is moving from an administrative activity to a strategic one • NSW Government Accreditation Program – underway across State Departments • NSW Local Government Roadmap Program • 60 Councils will have participated by June 2014 • Regional Programs underway in Southern Sydney, Central and Southern NSW • WSROC Program begins on the 7th of May • Procurement represents significant market power to: • Deliver high quality, value for money goods, services and works; • Drive sustainable cost savings; • Influence, enable and stimulate the private and social enterprise markets to deliver social, economic and sustainability outcomes;

12. Levels of procurement maturity Centre of Excellence across all expenditure Procurement foundations in place with improved controls Some functional and category strategies in place Level 4 Advanced Level 3 Developing • Professional procurement • Influencing the business • Transactional • Order placement Largely unco-ordinated procurement with gaps in compliance Level 2 Basic Level 1 Emergent Focus on meeting legislative requirements

13. Procurement Maturity Model Mission Strategy Results and benefits Delivery Organisation Category Management Contract Management People External Focus Strategic Procurement Internal Focus Sustainability Policy Framework Systems and Data Social Procurement Framework Enablers Compliance Management Economic Development

14. Social procurement - a strategicapproach to meeting social and economic objectives through procurement Organisation Strategic Procurement Social Objectives FunctionalSilos Strategic Social Procurement

15. Social and Sustainable Procurement - Features • An efficient way to deliver social impact • Does not require ‘new’ money – making the most of the money we are already investing • NSW $34bn/ year – State Gov’t $25bn/ Local Gov’t $9bn • Service delivery, community and civil infrastructure • GWS Local Government expenditure estimate of $1.5bn/ year • Private development – housing and infrastructure • Major Projects • Procurement is moving from an administrative activity to a strategic one • Significant market power to: • Deliver high quality, value for money goods, services and works; • Drive sustainable cost savings; • Influence, enable and stimulate the private and social enterprise markets to deliver social, economic and sustainability outcomes;

16. Social Procurement and Economic Development in GWS • Expanding range of case studies and activity already underway • International, National, Local • Challenges • Inconsistent practice – ad hoc rather then mainstream • Need for sustained collaborative GWS solutions • Priorities • How to we ensure social and economic objectives are built into project design and procurement practice – creating ‘demand’? • Ensuring that the way ‘Major Projects’ are planned and delivered leaves lasting legacies for GWS • How do we ensure ‘supply’ capacity to respond to those social and economic objectives: • Strengthening opportunities and the capacity of local and regional small to medium businesses and social enterprises to participate in the supply chain • Strengthening pathways to employment for disadvantaged residents

17. The Day Ahead