Study Exposes Gaps in Public Procurement’s Role in Boosting Employment Policies

New Research Explores the Link Between Public Procurement and Active Labour Market Policies in the UK, US, and Australia

Title of Paper: In Search of a Connection: Public Procurement and Active Labour Market Policies in the United Kingdom, United States, and Australia
Published In: Social Policy and Administration

A new study from the Activating Employers project team, published in the Social Policy and Administration journal, sheds light on the evolving relationship between public procurement practices and Active Labour Market Policies (ALMPs) in three major economies—the United Kingdom, United States, and Australia.

The , titled In Search of a Connection: Public Procurement and Active Labour Market Policies in the United Kingdom, United States, and Australia, is a literature review that explores how governments in these countries have used ALMPs and public procurement—a process by which governments purchase goods and services—as a tool for driving social policy objectives, particularly in employment and labour market interventions.

Key Findings
The review reveals significant disparities in how public procurement is leveraged to support ALMPs, which aim to boost employment and skills development for disadvantaged groups. Despite the growing interest in using procurement to promote social objectives, such as job creation and upskilling, the study identifies several challenges in aligning these policies effectively across the three nations.

1. There are varied regulatory models, both across the three countries under study and within said countries. For example, substantial regional variations, at state and city administration level, are evident within federal systems such as those in the United States and Australia, as well as within the devolved governments of the United Kingdom.
2. The United States distinguishes itself by its use of labour clauses in procurement and grant-making to push the Biden administration’s Good Jobs Agenda—an approach more advanced than in Australia and the United Kingdom. A key example is the Davis–Bacon Act of 1931, which mandates the enforcement of 'prevailing wages' for federal construction, infrastructure, and transport-related projects. In contrast, neither Australia nor the United Kingdom has a similar prevailing-wage requirement for construction projects.
3. Although job quality considerations are embedded in fair work procurement codes—such as Scotland's living wage accreditation for social care—they remain largely peripheral within the broader Active Labour Market Policy (ALMP) framework, particularly in the United Kingdom and Australia. Initiatives to incorporate job quality considerations are typically led by local authorities and remain largely separate from national Public Employment Services.

Implications for Policymakers
The paper calls on governments to more systematically link public procurement with ALMPs to maximize their potential to address labour market challenges, particularly in the context of post-pandemic economic recovery. The study suggests that a clearer policy framework, more robust monitoring, and inter-agency collaboration are key to achieving this goal.

About the project

Activating Employers is a two-year research project funded by the Economic and Social Research Council. The project asks how governments can encourage employers to create “good jobs” in low-wage, high-growth sectors, through a comparison of government regulation, policymaking and behavioural incentivisation in the UK, the US and Australia.

About the Journal
Social Policy and Administration is a leading international journal dedicated to the analysis and discussion of social policies and public administration practices. The journal publishes cutting-edge research that informs policy development and fosters greater understanding of social challenges worldwide.