Social clauses in public procurement for sustainable employment


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City

Amsterdam

Icons use case study main actors

Main actors

City Government, Private Sector

Icons use case study project area

Project area

Whole City/Administrative Region

Icons use case study duration

Duration

Ongoing since 2015/01

Amsterdam uses public procurement to support its young people at risk of exclusion to obtain a formal engineering qualification and work experience. It combines training measures with creating job placements specifically for this target group.

Amsterdam implemented a pioneering approach in its public procurement to bring both social and environmental sustainability into the city’s activities and maximise the social value of the money spent by the city. Amsterdam procures work from private companies on the condition that they reinvest part of the profits from the public contracts into programmes with an added social value, such as employability programmes for young people without qualifications. The ‘social return’ clause requires contractors to add activities to their tender that create employment, training or work experience placements for job seekers, young people without qualifications or work experience, and other vulnerable groups. The clause also specifies a minimum percentage of the profit earned by a contractor in each tender that needs to be invested in these activities. 

The Case Study exemplifies how the clause works in cooperation with Rutte, a road construction company with a strong sustainability philosophy that incorporated an education and work programme in civil engineering. The programme lasts two years and after participants graduate guarantees them a six month full-time contract. The participants of the programme study one day a week and work four days at Rutte, where they get on-the-job training guided by the company craftsmen. The programme is funded by Rutte, whereas the city administration funds the reintegration component of the programme.

Originally published by EUROCITIES, the network of 130 European cities - PDF: http://nws.eurocities.eu/MediaShell/media/353-green-web_final.pdf

Sustainable Development Goals

Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
Reduce inequality within and among countries
Make cities and human settlements inclusive, safe, resilient and sustainable
Take urgent action to combat climate change and its impacts
Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
City
Amsterdam, Netherlands

Size and population development
731.289

Main functions
Capital city, financial and business capital of the Netherlands

Political structure
Amsterdam is governed by a directly elected municipal council, a municipal executive board and a mayor

Administrative structure
Amsterdam is divided into 8 boroughs, each borough is governed by a directly elected district committee

In 2013 Amsterdam’s youth unemployment reached 24%. Currently there are 32,000 young people in the city without any work. These young people do not have a secondary education, vocational or third-level qualification, or previous work experience. As a result they have little chance of gaining permanent employment.

Amsterdam also has the ambition to improve its sustainability and become greener. The city’s objective is to cut CO2 emissions by 40% by 2025 (compared to the 1990 baseline) through energy savings, increased use of sustainable energy, and using the energy from fossil fuels more efficiently.

Consequently, Amsterdam implemented a pioneering approach in its public procurement to maximise the social value of the money spent by the city. The ‘social return’ clause requires contractors to add activities to their tender that create employment, training or work experience placements for job seekers, young people without qualifications or work experience, and other vulnerable groups. The clause also specifies a minimum percentage of the profit earned by a contractor in each tender that needs to be invested in these activities. Procurers are free to specify exactly how they will fulfil the clause requirements but the goal is to have an impact that lasts beyond the duration of the project, both for the target group and the company.

Rutte, which is a road construction company, is one example of how the clause works. The company has a strong sustainability philosophy and contributes to Amsterdam’s CO2 emissions reduction target by greening its operations, saving non-renewable resources and limiting its construction site waste.

Rutte incorporated an education and work programme in civil engineering as part of its tender for constructing and renovating roads and squares in the city. The programme lasts two years and after participants graduate guarantees them a six month full-time contract. The programme is dedicated to people aged between 18 and 25 who are on social welfare and who have no formal qualifications, lack work experience, come from a difficult background or have some form of disability.

The participants of the programme study one day a week and work four days at Rutte, where they get on-the-job training guided by the company craftsmen. On the job the participants gain first hand experience in environmentally friendly methods of running a business. For example they gain knowledge in preventing damage to the environment and their health while working with silica dust, a highly hazardous material, which occurs in the process of grinding and polishing stone and concrete.

The study component of the programme is developed and delivered in partnership with a training institution SPG Amstelland. The course gives participants the opportunity to gain certificates to work in civil engineering, including:

  • a basic ‘health and safety’ certificate, 
  • a ‘safety in work terrain’ certificate, on how to erect roadblocks in a safe way, 
  • an ‘earthwork’ certificate, on how to connect drains, and
  • a ‘safety, health and environment’ certificate on working safely on sites with health and environmental risks.

To ensure that the participants stay motivated to complete the programme, the company’s craftsmen also act as counsellors. They build trusting relationships with the participants and are available to discuss any obstacles the young people may experience including ones in their private lives. The craftsmen can also link them with relevant organisations should they need professional help. The craftsmen follow special courses to prepare for this role and to learn how to deal constructively with any difficulties that may occur.

The programme is funded by Rutte. The ‘social return’ clause stipulated that the company had to spend a minimum of €388,197 on the activities with a social added value. To date the company has spent an additional €55,854 towards the programme; as it was found to be a very good way of meeting their staffing needs. The city administration funds the reintegration component of the programme.

The public-private partnerships arising from the ‘social return’ clause in public procurement bring both social and environmental sustainability into the city’s activities. Ten young people have taken part in Rutte’s education and work programme so far. Seven have almost completed their education and will soon start their six month contract. The programme provides jobs and income to disadvantaged youth improving their future prospects on the labour market.

In the past two years the city of Amsterdam has saved €100,000 in welfare costs, since the participants earn a wage instead of claiming benefits. The indirect social benefits of the programme are that the participants are able to take better care of their families, and this prevents an intergenerational transfer of poverty and saves future welfare costs.

Many candidates for the education and work programme have had problems remaining in formal education or sustaining jobs. Before enrolling in the programme the candidates first go through a reintegration course. For three months, the candidates work on a cultural heritage preservation project at the Forts of Amsterdam. They learn basic employment skills such as arriving on time, following rules and regulations, as well as basic construction and renovation skills. At this stage they still receive welfare support. Only after the successful completion of this reintegration phase do the participants start the work and employment programme and receive a salary.

In Green Jobs for social inclusion (see references), EUROCITIES identifies three main factors that contribute to the success of these city initiatives to create green jobs for social inclusion at the local level.

They are:

1. Combining demand and supply side interventions:  an intervention does not solely focus on developing people’s competences, skills and motivation (supply side intervention) but also aims to create a tangible route into the labour market (demand side intervention).

On the demand side, the programme's objective is to provide a ‘protected’ working environment with the view of supporting people to gain real work experience to enable them to compete in the mainstream labour market.

These demand side interventions are then complemented by well-matched activation and training measures (supply side interventions) helping people to gain specific skills and improve their chances of accessing the labour market.

2. Linking the interventions to local employment opportunities

The second success factor is the strong link between the programmes and local employment opportunities. Cities as the level of government closest to the people have an in-depth knowledge of their local labour markets. They can design programmes in line with local economic demand and prepare people for jobs that are available locally. The effectiveness of the demand and supply interventions is made stronger when they are grounded in local businesses and job market needs.

3. Tailoring activation measures to the specific needs of people

The third success factor of the programmes is linking the activation measures to the specific needs of the target groups.

For local authorities, programmes that combine greening and social inclusion bring added value, particularly during periods of budgetary constraint and growing demand for services. Integrated programmes that address several objectives with one investment bring efficiency to local interventions. Given the longer term perspective of the sector, linking job seekers to local jobs in the green economy should continue to bring results as the sector is set to grow.

More information on the success factors: http://nws.eurocities.eu/MediaShell/media/green_jobs_for_social_inclusion_intro_FINAL.pdf

"Local strategies to implement national energy efficiency schemes", in Green Jobs for social inclusion, EUROCITIES, June 2015, 10-11.

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Giancarlo Carboni
Amsterdam, Netherlands

Giancarlo Carboni

Individual | Manager Bureau Social Return, City of Amsterdam

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