Theresa May hopes the result of a snap election will improve her Brexit negotiating position ©PA Images
Theresa May hopes the result of a snap election will improve her Brexit negotiating position ©PA Images

UK's Brexit future is 'mystical'

21 April 2017

Brexit could give the UK more freedom to shape its own public procurement regulations, a conference was told. 

Eddie Regan, principle consultant at consultancy firm PASS, said buyers were thinking about the changes they would like to see. 

“What I’ve been getting asked over the last 18 months, if not longer – even before we got to vote on Brexit – was what impact would it have on procurement and what can we change and what can we look at changing?” he said.

The UK’s future relationship with Europe was “mystical” in its uncertainty, said Regan. Possible outcomes of trade negotiations range from “business as usual” on one extreme to World Trade Organization rules on the other. “The one thing that everyone shares, and that’s why I say this is almost mystical, is nobody really knows what’s going to happen and it's how we move it forward and what the options may be.”

Prime minister Theresa May, who this week announced a snap general election would take place on 9 June, previously pledged to maintain regulatory stability on leaving the EU and said the UK would enshrine all European laws in the first instance. If this becomes the case it would allow public procurement regulations to be changed piecemeal, subject to any future trade agreements.

A lot of public sector buyers have suggested regulations need to be simplified, said Regan, who was speaking at the Procurex conference in London. Existing regulations hinder things such as collaboration, he added, as they don’t provide clear approaches to these issues.

Procedural changes should also be considered because “at the moment they are mixed and a mess,” he said. Suppliers don’t understand what buyers want and a lot of buyers are uncomfortable with how procedures are structured and then used. “A redefinition, a restructure within the procedures looking at different methodologies in terms of that procurement exercise and what we can do around it, would be useful.” 

Changing timelines to speed up procurement processes and increasing flexibility to change contract terms during negotiations after tenders have been awarded were also suggested.

Buyers have also been expressing frustration at restrictive selection processes that focus on supplier past performance, and not potential future capacity, said Regan. “There should be the ability to take certain elements now of the selection process and run them in tandem with the tender itself… and to turn elements of process on their head.”

Regan also said buyers suggested changes to “improve the lot of British business... by giving them the ability to show social benefits, environmental benefits more in a localised fashion”. “No one I’ve spoken to has suggested we remove the need for transparency and non-discrimination,” he said, but added this suggestion reflected some of the reasons people decided to vote for Brexit.

Separately, the number of firms in UK supply chains that are in significant financial distress has risen by 26% on average over the last year, according to a report by insolvency firm Begbies Traynor. The report said uncertainty caused by Brexit and an increase in inflation was starting to affect firms. The transport and logistics, wholesale and food and beverage manufacturing sectors saw the largest increase in stress.

Ric Traynor, executive chairman of Begbies Traynor, said: “Rising energy and food prices, combined with the devaluation of sterling, have undoubtedly put a strain on the much of the UK’s supply chain.

“As we wait to see what a future UK trade agreement with Europe might look like, these suppliers face continued uncertainty, not just in terms of their European distribution channels but also with regards to staffing, given their higher reliance on European migrant workers.”

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