Over the Christmas and New Year period, we will be featuring a daily favourite article from each month of this year (2016), which should take us nicely up to January 8th when we assume everything kicks back into gear! Today, from June, one of several articles about the seismic events around the Brexit referendum in the UK.
Where to start?
Just a few weeks after we relaunched this site and told you about our plans for Public Spend Forum Europe we have the imminent UK withdrawal from the European Union, and the chaos of a British political system that has gone into almost total meltdown. One political party has no leader, the other major party is tearing itself apart because of a leader not respected by most of his members of parliament, and Scotland threatening both independence and that they might have the legislative ability to block the UK exit.
That final point is an interesting one for all students of government and lawyers. There appears to be some legislation connected with the creation of the Scottish Parliament that says Scotland needs to give its approval to this move. Now that really could make things interesting.
As we have said before, there are unlikely to be any changes for some time in terms of UK public procurement legislation. At some point (assuming there is an exit), we will get into interesting discussions no doubt about how the UK regulations might be improved by moving away from the EU directives template. But that is likely to be years away. But there are more immediate and pressing issues for contracting authorities and practitioners to consider.
The effect on the European economy is one – it was not just the UK stock market that fell on Friday, all the markets in Europe dropped significantly. Uncertainty, which will continue for some time despite the apparent “decision” made last week, is always bad for business, so with some European economies weakening anyway, this could take us into recessionary territory.
Currency is another issue; so far the £ has fallen, but again volatility may well be increased for some time to come. All of this means we need to think about contracting and supplier management strategies. We could see more suppliers going bust; or looking for price increases to counter currency effects; or we might see more pressure again on public spending.
Then we have the political effects outside the UK. Marine Le Pen is already calling for all countries to have referendums on EU membership – might a “Frexit” really be on the cards? Certainly some recent surveys have shown anti-EU feeling to be at last as strong in a number of other countries as it is in the UK. So about the only thing we can say with certainty is that we are facing turbulent times in Europe, which will put many organisations under pressure and create many challenges and opportunities for procurement professionals.
We will of course continue with Public Spend Forum Europe – it is not going to become PSF UK, don’t worry! In time, we may have to segment some of our discussions if the UK adopts different legislation to the rest of Europe, but we will all still face similar issues in public procurement across every country.
Achieving value for money, protecting against corruption and fraud, supporting wider policy initiatives (SMEs, innovation, social responsibility), developing the right technology, tools and skills to work effectively in procurement – this will continue to be a common agenda for all of us. The way in which it is delivered in different countries will always vary somewhat, and perhaps the UK will become more unique in its approach – or maybe not. But the core issues won’t change, and we will try and continue to address them as best we can.