Public procurement – what happens if Scotland leaves the UK?

So what happens in terms of public sector procurement if Scotland votes to leave the United Kingdom? That’s the central question that the citizens of Scotland are wrestling with as they decide how to vote on September 18th in their referendum.

Seriously though, public procurement is perhaps is not the biggest issue around the potential split, but it is an interesting question. Initially at least, we know that Scotland would no longer be part of the European Union, and would have to apply for membership, a process that could take some years. So from a public procurement point of view, in practice the likelihood is that Scotland would be treated in the same way as (for instance) Switzerland or Norway – close and friendly nations but non-members.

Whilst the EU does now have the power to prevent non-EU firms bidding for contracts worth 5 million or more, this is really designed for countries who refuse to open their own markets to European countries. It is unlikely this would apply to Scotland – unless of course the new country applied its own highly protectionist policies, and the EU responded by banning imports of haggis and whiskey (cultural stereotype time ...)

So the chances are that Scottish firms would still be able to bid for contracts let by the remaining Westminster government and of course the Welsh government, as well as by other EU countries. However, there might be more of a psychological effect. We hear a lot of UK politicians sounding off about how government contracts should go to UK firms. Would we start hearing English politicians talking about how public procurement should be supporting English firms – not those nasty people over the border in Scotland?

In terms of public procurement within Scotland, that would be another interesting question. In theory, the country could change their own procurement regulations to move away from the EU standard directives. That might give greater flexibility, for instance, or even allow their contracting authorities to favour local suppliers more strongly. However, if Scotland was looking to re-join the EU as soon as possible, they might be better advised to stick with the EU procurement regulations, if for no other reason than to show that they were being good Europeans.

And what about the new “border” areas? Would Northumberland or Cumbria County Council still treat a tradesman as a “local supplier”, if the office or the owner was based a few miles into Scotland? Or would that now be seen as a foreign supplier?

All in all, we suspect there probably wouldn’t be much visible change within Scotland, and it might take some time before even any behavioural antipathy towards buying from “foreign” firms would come through. But we can’t be sure.

Personally, I hope Scotland vote for secession. If nothing else, it will make life more interesting, and probably save English taxpayers some money. I doubt very much that the Scots will be so bold, but we’ll be ready with a more detailed analysis of procurement consequences if by chance that does happen in a couple of weeks’ time!

Voices (3)

  1. David Little:

    Well, it’s no secret the Scotsman supports the ‘No’ campaign. The title of that article only gives part of the story it tells.
    That Scotland has greater per capita public spending is debatable, depending on which source you read
    (http://www.eureporter.co/economy/2014/03/18/yes-scotland-sets-out-its-stall/) .
    That Scotland generates a surplus from tax revenues is not; even the the article you show quotes this.
    Isn’t part of being a good negotiator challenging the written word?

  2. David Little:

    “and probably save English taxpayers some money”? Come on, Peter; I don’t know any credible source still claiming that’s true, and received wisdom is that Scotland creates a surplus.
    Also, why the painting of Marston Moor?

    1. Peter Smith:

      http://www.scotsman.com/news/uk/public-spending-per-head-in-scotland-revealed-1-3197170
      Free NHS, free Uni education – do you really think Scotland doesn’t get a pretty good tax / spend deal? As I say, let’s try it and see. Vote YES!! And stop all these Scottish MPs voting on English matters in Westminster. Re the picture – I would blame my Editor except she was on holiday, which means it’s me who didn’t read the details properly! (Pic now replaced…). Many thanks for pointing it out.

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