Implications of Brexit for Public Procurement – A University View

At last week’s excellent LUPC and SUPC university procurement conference, I participated in a panel discussion titled “What are the implications of Brexit?” – for public procurement of course was the meaning of that, not a discussion of our fishing industries in the EU or the impact of leaving on the NHS.

David Hansom, a partner with law firm Veale Wasbrough Vizards and a real expert on EU regulations joined me and at the last minute we co-opted Anj Cooke, Head of Procurement at University of Bristol onto the panel to give us a real live practitioner viewpoint!

David ran through what might happen from a legal point of view post-Brexit. Nothing much initially, was his comment, as the EU procurement rules are adopted already into UK law but around 2020 might be a reasonable estimate of when the Government might look at the procurement regime again and any changes to the regulations might come into place.

One thing all the experts agree on is the uncertainty that would follow the decision, and procurement law is no exception. One option in the event of a Brexit would be the “Norwegian model” – that means the EU procurement rules apply in full and Norway has no scope to influence the rules (which sounds like the worst of all worlds, to be honest). But there might be the possibility of a variant approach where UK is able to have some influence? We wouldn't know that of course until real negotiations started, and I suspect procurement would not be top of the list of topics, as we’ve pointed out previously.

Or we might choose to follow the Swiss model, David suggested – that country is not part of the European Economic Area but is part of the European Free Trade Area (“EFTA”) and has bi-lateral treaties on a range of areas, including procurement. That would mean following WTO rules and indeed the Swiss regulations are pretty similar to those of the EU.

I then spoke about the political and even the psychological impact of a potential Brexit. Even if nothing much would happen in the short term, pressure might build to follow a procurement policy that favoured “local” or national suppliers? That might depend on whether the view of the more outward-facing Brexiteers prevailed (those who want the UK to become an independent, global trading nation). Or would the “little Englander” view became powerful – pull up the drawbridge and look after ourselves, basically.

Our audience then got involved, and we had a some very good debate, although we managed to keep it to the procurement topic and it never got too heated! (Not a “Question Time” type bun-fight, I’m glad to say). One delegate pointed out that getting bids from genuine non-UK firms, other than the UK arm of large multi-nationals, was very rare anyway in procurement competitions. “UK public procurement giving all our money to foreign firms” is a myth really. And, as David Hansom explained, in any event it is impossible to see a day when public contracts would be awarded without any procurement regulation.

But there were some concerns about that pressure to “buy local” which could arise post Brexit. And when we asked how many people thought that Brexit would be a good thing for public procurement, very few put their hands up – the vast majority were neutral or felt it would be negative.

The audience certainly the view that a Brexit would not be positive for procurement, although that may also have been influenced by the fact this was a university-based audience. As a leading European country in terms of the ranking of our higher education establishments, the UK gets a good share of EU research funds, and those in procurement are perhaps closer than some others to understanding the wider potential impact.

So, a thought-provoking session, and we will know in just 48 hours if our delegates are going to be concerned, or relieved!

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