Thursday, 6 March 2014

Procurement Risk and Scottish Independence

First of all I should declare that I am genuinely interested in the topic of Scottish independence.  My wife is Scottish, and so is my daughter (though her twin brother is English – don’t ask).  My personal preference is for a continued Union, but we need to recognise that there is a considerable percentage of the population of Scotland that seeks independence.  Regardless of the desirability of independence, it is a possible outcome of the referendum in November 2014, and so businesses should be considering the impact on their businesses.  Procurement and Supply Chain personnel in particular should be drawing up outline contingency plans.
Standard Life has drawn up a contingency plan to move its operations to England in the event of independence, and this has predictably created a political storm.  However it is only sensible to consider the options, whether or not the consequences of that are politically sensitive.

Given that one of the parties in the government is committed to an in/out referendum on membership of the European Union in 2017, some of the same issues will need to be considered ahead of that.  3 years till a referendum, and 5 years or so till a Brexit (as it is called) may seem like a long time, but it should still be a factor in long term supply chain considerations.
What are the issues?  Well, some/all of the following, and probably some more I have missed.

 -     Currency of transactions £/EU/£S – and exchange rates
-      EU membership (Scotland and Britain)
-      Legal basis of contracts (already an issue - are you aware of the differnce between English and Scottish business law?)
-        Formal barriers to trade
-        Soft barriers to trade e.g. Buy Scottish/ Buy English campaigns
-        Interest rates
-        Transport/customs
-        Infrastructure/cost of doing business
-        Personnel/skills movements  - the brain drain vs. immigration
-        Resentment/politics
-        Refocusing of market efforts
-        Decline of “UK national” coverage
-        Time zones
-        Interest rates/cost of living
-        Economic impact
-        National and nationalist politics
-        Procurement legislation (as set by the EU, and applied by different national governments, and as guidedd by the WTO agreement on public procurement 1996, and re-negotiated in 2011)

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