HM Revenue and Customs (HMRC) has published its first-ever action plan to increase the proportion of its procurement expenditure with voluntary, community and social enterprise (VCSE) organisations.
The action plan, published this week, says the tax authority will focus in 2025-26 on improving its understanding of the VCSE sector, reducing barriers to entry and increasing participation from voluntary organisations in procurement bids.
HMRC said it is “committed to fostering a collaborative and inclusive environment for VCSE organisations”.
“By creating a more flexible and inclusive commercial system, we aim to benefit suppliers of all sizes, including charities and social enterprises,” its plan reads.
According to the plan, HMRC spent £1.88m directly with VCSEs in 2023-24, down from £2.23m the year before but up from the £299,000 it spent with the sector in 2021-22.
These figures exclude indirect spending and grant funding allocated to VCSEs.
Creating a ‘foundation of best practice’
HMRC said its action plan intends to focus on promoting the VCSE agenda; simplifying the procurement process; VCSE engagement; supply chain engagement; and improving VCSE data collection.
It intends to work with Social Enterprise UK to identify categories within HMRC spend where VCSEs are underutilised and run training sessions with commissioners to share best practice on engaging VCSEs within procurements, among other things.
Feedback from the sector will be proactively sought so that HMRC can “continuously improve our understanding of VCSEs and how we can better support the sector going forward”, the plan says.
“HMRC is committed to improving its understanding of VCSE organisations in its sectors and the markets it purchases from, with the aim to increase VCSE appetite to participate in procurement bids and reduce barriers to entry.
“VCSEs play a vital role in the delivery of public services and many have strong links to the communities they serve.
“Their knowledge and connection to local areas ideally place them to help create compassionate, responsive and efficient public services.”
HMRC added that during the year, it would “commit to further research into understanding the causes for the barriers on both the supply and demand sides”.
It will ensure that the plan is effectively implemented across the department by 31 March 2026, with regular process monitoring.
Work with other departments
HMRC’s plan notes the Social Value Act, which encourages public sector commissioners to recognise social value when awarding contracts, and the Procurement Act 2023, which introduces further legislation to support the VCSE sector.
VCSE crown representative Claire Dove said she was keen to work with all government departments to promote the benefits of working with VCSE organisations.
“Having worked closely with HMRC, I’m looking forward to supporting HMRC making renewed progress with VCSEs and seeing them increase the amount of business they partner with VCSEs on,” she said.
“This action plan builds on previous achievements and will help HMRC to deliver on their ambitious plans for VCSE engagement.”
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