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What is the HMRC Sustainable Procurement Strategy?

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Kara Anderson

updated Mar 31, 2023

UK Copywriter at Greenly

The HMRC (His Majesty's Revenue and Customs) Sustainable Procurement Strategy outlines key sustainability considerations that must be taken into account when submitting a contract for tender. The Strategy, alongside the adoption of the Social Value Model, aims to position HMRC as a public sector leader with regards to sustainable procurement.

👉 In this article we’ll explore why HMRC wants to position itself as a sustainable procurement leader and how its Sustainable Procurement Strategy aims to achieve this.

First up, what does HMRC stand for?

HMRC stands for His Majesty’s Revenue and Customs, and is the UK’s tax, payments and customs authority. It was established in 2005 to replace the Inland Revenues and HM Customs and Excise and is overseen by the UK Treasury minister, who leads on strategic tax policy and policy development.

HMRC are tasked with safeguarding the flow of money to the Chancellor of the Exchequer (the UK Government’s chief financial minister), ensuring that money is available to fund the UK’s public services, facilitating international trade, administering statutory payments and benefits, and administering the UK tax system.

How does HMRC define sustainable procurement?

“ HMRC defines sustainable procurement as “a process whereby organizations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organization, but also to society and the economy, whilst minimizing damage to the environment.” ”

Why is sustainable procurement important to HMRC?

Sustainable procurement is important to HMRC for a number of reasons, not least because it has the potential to push the UK economy onto a more sustainable trajectory, while also offering better value for money for UK taxpayers.

It’s HMRC’s aim to become a public sector leader when it comes to sustainable procurement. It believes that by setting the bar for the rest of the public sector, industry and consumers, that it will be able to help drive markets for more innovation and sustainable solutions.

How does HMRC implement sustainable procurement?

HMRC ensures that sustainable procurement is considered throughout the various stages of its procurement process. It achieves this in a number of ways, including the implementation of the requirements outlined in the Social Value Model introduced by Procurement Policy Note (PPN) 06/20.

❓The Social Value Model is a framework of over 50 different metrics that all organizations hoping to enter a bid for a public contract should track to map their activities - both during the procurement process and for ongoing project monitoring. The prioritization of the different metrics varies according to the sector, industry and contract.

HMRC has adopted the following requirements, as per the demands of the Social Value Model:

Inclusion of at least one social value award question in the tender documents, worth a minimum of 10% of the overall tender weighting.
Responses from bidders are evaluated in line with the SVM award criteria.
Social value deliverables included in the winning tender will be included in the contract for the duration of the contract’s lifespan.
Key performance indicators will be based on reporting metrics included in the Social Value Model.

In addition to the adoption of the Social Value Model, HMRC has also incorporated other sustainable procurement processes, this includes the adoption of the following considerations in the HMRC procurement question set:

Compliance with environmental legislation.
Consideration of the supplier’s own environmental policies, as well as their policies regarding economic regeneration and the improvement of workforce skill sets.
Commitment to supporting HMRC’s Sustainable Procurement Strategy.

What is HMRC’s Sustainable Procurement Strategy?

HMRC, in its Sustainable Procurement Strategy, outlines how it intends to become a public sector leader on sustainable procurement. It identifies nine components to its Sustainable Procurement Strategy. Let’s take a look at these in closer detail:

Leading by example

HMRC has a target of becoming a leader on sustainable procurement, and aims to inspire other public sector bodies to follow suit. It will achieve this through the following actions:

Effective sustainable procurement practices will be embedded within HMRC processes - HMRC will ensure that sustainable procurement is recognised as a central component of their corporate objectives.
Sustainable procurement practices will be outcome focused with well-defined deliverables covering environmental, social and economic issues. For example: reducing CO2 emissions, promoting equal pay, and providing opportunities for SMEs and diverse suppliers.
HMRC will engage with existing suppliers to ensure that they understand their role and are able to support the HMRC’s sustainable procurement objectives.
HMRC will appoint sustainable procurement experts who will be the primary source of policy advice, mentoring and training on sustainable procurement matters.
Progress and success will be tracked and recorded so that sustainability benefits are able to be published.
HMRC will ensure that sustainable procurement is included in procurement practitioners’ key work objectives via performance agreements.

Environmental policy

HMRC states that it is committed to preserving natural resources and preventing environmental pollution. It is part of HMRC policy to take environmental needs into consideration, to make efforts to reduce its energy and water consumption, to reduce the use of ozone-depleting substances, and to use recycled paper whenever possible.

HMRC’s purchasing policy takes into consideration environmental issues while still securing best value for money.

👉 Specific environmental details that suppliers need to be aware of are included in any HMRC tendering documentation.

Raising the bar

HMRC aims to become a public sector leader when it comes to sustainable procurement. It aims to achieve this by:

Adopting a forward thinking approach that gives advance warning to the market of future procurement requirements, enabling them to respond with innovative solutions ahead of time.
Identifying and setting future minimum sustainability requirements, and by encouraging investment into research and development by suppliers.
Ensuring that relevant government buying standards are included within procurement activities.
Working with accredited organizations to deliver value when it comes to sustainable procurement.

Building capacity

HMRC will develop their sustainable procurement capabilities by:

Adopting annual benchmarking of performance.
Developing guidance for procurement practitioners and delivering effective training.
Using technology to provide detailed spend analysis in order to identify areas of priority spending.
Adopting environmental, social and economic considerations into all stages of the procurement lifecycle. E-tools will be used to assess performance and benchmark activities throughout the contract duration.
Collaborating with suppliers to identify areas for improvement.

Removing barriers

HMRC is focusing on the long term benefits of sustainable procurement by:

Ensuring that budgetary mechanisms support sustainable procurement.
Taking into consideration the entire life cost of the procurement contract in the evaluation of tenders.
Making improvements to risk management processes in order to create opportunities for innovation.

Capturing opportunities

HMRC recognises the potential that sustainable procurement policy has for stimulating innovation. It aims to support this by:

Remaining open to innovation by accepting that risk is also a factor. Risks will be mitigated by ensuring that effective risk management processes are in place.
Effective communication of long term plans with regards to sustainable procurement policy.
Avoiding detailed specification so that markets are able to respond with innovative solutions.
Working alongside markets on joint improvement plans that deliver on both sustainability and value for money.

Race equality

Under the Equality Act 2010, HMRC has a legal obligation to promote race equality by:

Eliminating unlawful racial discrimination.
Promoting equal opportunities for all.
Promoting good relations between people from different groups.

Government collaboration

HMRC highlights the importance of working alongside UK Government departments and using a common approach when it comes to sustainable procurement policy. This will be achieved by:

Adopting collaborative deals that offer both value for money and sustainable development benefits.
Working with other government bodies to develop government strategies for categories of common goods and services, with both value for money and sustainable development benefits.
Adopting the HMRC and Home Office supplier charter in order to support the sustainability agenda.
Participating in government sustainability working groups and initiatives.

Measuring and reporting success

HMRC’s sustainable procurement strategy is forward thinking and HMRC will update and manage the strategy by:

Publicizing strategy updates to ensure that procurement professionals, stakeholders and suppliers are informed.
Six month implementation reviews.
Annual strategy updates to ensure that HMRC’s sustainable procurement policy stays relevant and consistent with best practice.
Best practice sharing with other government departments.

👀 Looking forward

HMRC’s Sustainable Procurement Strategy and other sustainable procurement practices aim to make better use of public money, while creating a more successful country through increasing sustainable economic growth. It’s only by taking into account the whole cost of goods and services purchased (for example energy and water use) and the wider social costs incurred (such as the impacts of pollution and waste disposal) that true value for money can be achieved from HMRC contracts.

HMRC sustainable procurement asks that HMRC consider how a tender can improve the social, environmental and economic wellbeing of the area in which it operates. It also makes clear that sustainable procurement isn’t simply about buying ‘greener’ products, it also encompasses forward planning and ongoing contract management.

The effects of HMRC’s sustainable procurement practices can be far reaching, and it is hoped that by acting as a leader in this area, that it will be able to influence market innovation and a wider shift towards sustainability.

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