Theresa May calls for a Hard Brexit; but what does this mean when bidding in the public sector?

Procurement after a Hard May-Brexit

Following the results of the snap general election on the 8th June 2017, we prepare for an uncertain future with Theresa May potentially leading us into the darkness of a hard Brexit.

Amongst many things, public procurement after a hard Brexit remains unclear.

‘May-nimal’ Change

Although the UK’s current procurement laws and practises are set in accordance with the European Union (EU) procurement rules, certainty where procurement is concerned, remains in place until Brexit negotiations are completed, and an exit date has been agreed for some time in 2019.

So no need to panic about what a world without standard Selection Questionnaires (SQ) and Invitation to Tenders (ITTs) looks like just yet.

What we know

The Government’s ‘Repeal Bill’, or The Repeal Act as it will be formally known once it comes into force after Brexit is complete, was included in the recent Queen’s Speech. Put simply, the resulting legislation will ensure the UK’s legal systems continue to operate properly once Britain jumps ship.

The Bill seeks to cover 3 main principles:

  • End the supremacy of EU law in the United Kingdom;
  • Convert EU Law into UK Law; and
  • Create powers for ministers to make changes to laws as they see necessary, without full parliamentary scrutiny.

The Government says the Bill will ‘provide maximum possible legal certainty, without leaving holes in the Statute Book,’ however this remains to be proven.

The Bill however is open to much scrutiny. Essentially we leave to end sovereignty of EU Law, yet we enact EU Law, into UK Law once we have left. Why invite the people of the UK to a referendum if it’s business as usual? Although undoubtedly this is good news where procurement is concerned.

The third principle controversially goes back to the Tudor times, and I’m not sure any of us feel confident in having a Government run under Henry VIII clauses, where laws can be altered by proclamation, and without any form of parliamentary democracy. Could this potentially mean that we see the elimination, alteration and or reformation of many of our current UK Laws, such as; procurement legislation, or perhaps the return of the unlawful consumption of mince pies on Christmas day act? FYI in 1944 this was actually illegal.

Where does this leave procurement?

It appears unlikely that current procurement legislation will abscond too far from what is currently in place, particularly when considering the principles set out within the ‘The Repeal Bill’. The Government however could decide to repeal or amend the legislation in such a way that could for example, see the increase/decrease of thresholds for when procurement legislation is engaged, which would drastically change the procurement landscape.

However with the benefits and support public procurement policy provides local Government, including transparency, anti-corruption, anti-competitive behaviour, fairness, inclusion, promotion of choice and value for money, we are unlikely to see a complete disregard to the procurement legislation currently set out.

Changes to EU Directives

There is also the recent EU Directives on procurement, concessions and utilities to consider when assessing procurement after a hard Brexit.

The Government passed the new EU Directives with the Public Contracts Regulations 2015, bringing through the directives into national legislation, which now legally applies in England, Wales and Northern Ireland.  Furthermore, the UK introduced special measures into the Public Contracts Regulations 2015, which provides long overdue, fairness and inclusion for SMEs when competing for public contracts.

We are therefore unlikely to see the removal of these core and proven beneficial principles.

What the Competition Act 1998 says

We must also consider what the Competition Act 1998 says, which addresses both anti-competitive agreements and the illegal domination and monopolisation of market position. The Competition Act 1988 was put in place to ensure transparency, fairness, openness and inclusion between competition both within the UK and the EU.

The changes to competition legislation are largely dependent on the UK’s exit strategy. We don’t know much, but we are aware that May has been discussing plans to negotiate a major free trade agreement (FTA) with the EU. The shape and scope of a potential FTA is not clear, but we know that in this instance, EU competition laws will no longer apply to the UK once we have left the EU altogether, and the single market in the case of a hard Brexit.

UK companies nonetheless, will be bound to adhere to EU Competition Laws in relation to their business activities within the 27 countries currently remaining in the EU when trading.

A FTA will also involve a lengthy negotiation process, potentially lasting years, and we are therefore unlikely to see much change in procurement as it currently stands, until a full exit strategy has been agreed and exercised. Even then, we’re unsure of the motives of the Government in changing procurement legislation with the core principles it provides in terms of, eliminating scrutiny and promoting transparency, choice and best value.

Whatever the trade deal, it seems unlikely that current competition legislation will be abolished within the UK, particularly with ‘The Repeal Bill’ now in the picture, governing that Post-Brexit EU Law will be converted into UK Law.

Hard Brexit unlikely to cause mass reform in public procurement

We are therefore unlikely to see any change arising to procurement legislation, at least until the UK has left the EU two years from now. ‘The Repeal Bill’ will also partially safeguard procurement legislation for the interim, if the Bill becomes enforceable.

The biggest change we may see in procurement, will however be based on the UK’s trade deal with the EU. What ever form of Brexit we have, with some form of free trade agreement or not, the UK Government will have greater powers to reform UK current legislation, without obligation to apply EU laws. This could result in some procurement legislation changes. However, the principles of a well-regulated procurement process, which promotes transparency, fairness, inclusion, choice and best value for Government, is far too beneficial to UK Government to see large amounts of reform in procurement legislation, and therefore change is likely to be minimal.

Looks like the dreaded standard Selection Questionnaire (SQ) is staying put for now!

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