What does Brexit mean for Procurement?

The UK spends £200 billion on public procurement annually. This is currently governed by an EU Procurement Directive, which will continue to be valid until the UK officially exits the EU or the terms are renegotiated. With the triggering of Article 50, there are many possible ways for public procurement to proceed in the future, although until final agreement is reached, they are all currently speculative options.

Procurement procedures help protect against fraud, regulate competition, ensure value for money, satisfy legal requirements, and assure all parties that they will be treated fairly. Transparency is required to reassure the public that the £200 billion is managed fairly and wisely.

Any amendments to UK procurement legislation will depend on the type of relationship negotiated with the EU regarding trade. Once the UK leaves the EU, all European laws will be enshrined in UK laws in the first instance to maintain regulatory stability.

Should the UK negotiate preferential terms with the EU, they would need to retain the current directive or introduce very similar legislation, though to do this would be complex and time consuming given the consultation required. As the UK was influential in drafting the EU procurement legislation and as such the legislation largely meets UK requirements, perhaps the total abandonment of the EU directive would be counterproductive. The World Trade Organisation, which the UK may choose to rely on more having left the EU, has different rules. A combination of differing access to EU trade in different areas, or assorted trade agreements with different nations across the world might see a highly complex and contentious need to overhaul many procurement procedures. Given that the EU directives are already compliant with the World Trade Organisation’s Agreement on Government Procurement however; either the EU Single Market option or the World Trade Organisation option may require few legislative adjustments to a directive already enshrined in law by both Westminster and Holyrood.

On the other hand, the ability to be able to revise, redefine or restructure the procedures to suit more British concerns will be an advantage, given the uncertainty caused by Brexit. Rising food and energy prices, coupled with the devaluation of sterling have put a strain on much of the UK’s supply chain, with future concerns relating to European distribution channels and a reliance on European migrant workers also adding to the uncertainty. The ability to change timelines and speed up procurement processes or the introduction of greater flexibility might prove beneficial to struggling British companies, as might reviewing selection procedures to reflect potential future capacity instead of past performance. Until Brexit negotiations are finalised, however, and the UK leaves the EU, the future of public procurement in the UK is unknown.

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