Brexit and Public Procurement

So now the United Kingdom of Great Britain and Northern Ireland has voted to leave the European Union, what will change in our Public Procurement?

In the short term, nothing much.  What do I mean by the short term?  Well at least two years, which is how long it will take Article 50 to be applied to allow us to leave.  Bearing in mind the politics, than probably means at least 2 and a half years so 2019.  Some commentators are saying 2020 would be more realistic, but who knows? 

What will happen then?  A lot will depend on what happens in the intervening time.  Will the UK stay together or break up?  Which could lead to quite different procurement regimes in the 4 major countries (which are at the moment only a bit different).

It is likely that whatever else happens England (largest country in the UK) will be pulling out of the EU procurement rules, so what will happen in England?

Well again, possibly not a lot for a while.  The UK is a signatory to the World Trade Organisation Government Procurement Agreement which underpins much of the EU procurement regulations.  Given that outside of the EU we will probably use the WTO in redeveloping our trading relationships with other countries, it is fairly unlikely that we shall pull out of that agreement (at least not quickly).

The WTO GPA sets in place a series of rules for procurement above a certain value or threshold, which is the same as the one in the EU regulations.  So thresholds and processes will remain in place, but might be amended.

There would be no ability to appeal to the European Court of Justice as EU procurement directives would not apply (unless that is part of our settlement in leaving).

Could we have a Buy British or Buy English campaign?  Probably not because it would clash with the WTO GPA, and anyhow could have negative consequences on Value for Money (if the foreign providers do not provide better VfM we would not contract with them).

Things like the European Single Procurement Document (ESPD) that came in in April 2016 but still has not actually surfaced, may change some time in the future.

So lots or uncertainty, but given that we need rules for public procurement to avoid corruption and to obtain value for Money, and that we are already signed up to rules for this, and that changing public procurement policy is unlikely to be top of the agenda for a post Brexit country, I think we shall only be seeing small changes for the next 5 years or so.  After that, who knows?  As they say, a week is a long time in politics - let alone 5 years.  In the meantime PCR 2015 stays in place.

So there is still a point in going to EU Procurement training (well, I would say that wouldn't I?)  as nothing is going to change for a few years.  After that, then I am sure we will have new public procurement training to clarify the new rules as and when they emerge.

For me, the Referendum is over...

I've voted.  Postal vote means an early vote.
I was always quite clear on my position, and I can't imagine it changing any time before the referendum.
Whichever way you vote, I hope that you do.

But for me, now I just have to wait for the result.

The Death of the Euro

I am at heart pro-Europe and pro-Euro.  Both positions that require some defending in the UK.  At least if you read the Daily Mail, Telegraph, or Express.  However I believe that European countries have more in common than we realise, and more than our differences.  (I am writing this in Kuala Lumpur, a wonderful westernised city that is more different to, say, London that any city in Europe)  I also have a historic view that says that the main purpose of the European Union is to prevent a further major European war - in which it has so far been very successful.

The principle of the Euro is easy to see - a single currency for a trading bloc larger than the USA, providing a potential counterweight to the US Dollar, making it easier to trade across borders and promoting a single European identity. 
Through the travails of the Eurozone, as first Portugal, Ireland, Greece and Spain, and now Greece, Italy, Spain and even Belgium, struggled to escape the current crisis I was hopeful that the Euro would survive.

As I now talk to my delegates from the Gulf on my course in KL, I find that my beliefs have changed and I no longer think that it is going to survive.  The problems appear to be both economic and political.  The politics rather over rides the economic, because in some ways they are the cause of the economic problems.  In setting up the Euro the EU governments allowed countries into the Eurozone for political reasons that had no purpose in being there (Italy, Greece) and then ignored its own rules to allow the big countries (France and Germany) to flout the rules with no consequence.  These were political decisions.  Meanwhile across Europe politicians played narrow, local political games without attempting to persuade a sceptical European public of the benefits of the EU.  Countries that were beneficiaries of EU largesse (such as Eire) were in favour - the funders were more sceptical (particularly GB).  Robert Peston of the BBC, the usual harbinger of doom, has a lot of information about how the cost of borrowing in the Eurozone is going to pull it apart (in fairly short order).  Michael Lewis's new book "Boomerang" is also very informative about how the economic markets are now likely to bet against Eurozone countries and the Euro.  Link here


Gordon Brown's 5 economic tests now seem wise in ensuring we did not join.  They were;

1. Are business cycles and economic structures compatible so that we and others could live comfortably with euro interest rates on a permanent basis?
2. If problems emerge is there sufficient flexibility to deal with them?
3. Would joining EMU create better conditions for firms making long-term decisions to invest in Britain?
4. What impact would entry into EMU have on the competitive position of the UK's financial services industry, particularly the City's wholesale markets?
5. In summary, will joining EMU promote higher growth, stability and a lasting increase in jobs?

The Eurozone countries did not have equivalents, and now are living with the consequences.  However for all the potential benefits of saving the Euro, the European public has not been convinced to do so.  Politicians have failed to prepare the ground for such an eventuality, and so there is no support for any action.  And the inaction is pulling down the Euro in an irresistible slow train wreck.  In order to protect the Euro, it seems necessary to move strongly towards a United States of Europe - which is unpalatable to voters.  Acting in ways that might allow the Euro to survive is pretty much electoral suicide in any Eurozone country (and indeed in GB).  So the inevitable outcome now seems to be the death of the Euro.

The resulting chaos will not be pretty (and not for the UK either - we don't seem to realise how dependent we are on the EU for our own economic well being).  At the end of it the Euro as a single currency will be unthinkable for a couple of generations (at least).  It is possible that it may even lead to a break up of the EU itself (the only way for Greece to leave the Euro at the moment is to leave the EU as well), at least of peripheral countries which will fundamentally change the nature and role of the EU.

The fantasy of some is that this breakup will be easy and simple and lead to the reinstatement of a simple European free trading zone, with very little in the way of legislation slowing down public sector procurement.  My feeling is that this is far off the mark - we are likely to retain much of the restrictive legislation for years as a hangover (at least), whilst restrictions on free trade will be quickly imposed by any country leaving the EU.   But I could be wrong - after all, I was on the Euro.  (I think).