Brexit Briefing

What the vote for Brexit means for public procurement in the UK

The UK remains a part of the European Union and its legislative framework until such time as it formally leaves.

The timescale allowed to negotiate a departure under Article 50 of the Treaty on the Foundation of the European Union is 2 years. Given the legislative complexity of a departure and the terms to be negotiated it is thought unlikely that departure will be agreed with much greater rapidity.

The departure time scale commences when the UK invokes Article 50, and at the date of writing the UK has not done so. There are numerous practical and political considerations, and a range of factors are being reported including.

  • The courts remain to decide whether the UK Parliament can do so under executive authority without a further vote in the House of Commons.
  • Concerns about the need to ensure stability through the full term of these negotiations with the UK’s German and French counterparts have been reported within UK Gov. The posts of Chancellor Angela Merkel and President Francois Holland are both due for re-election in 2017.
  • Negotiation of the terms of alternative trade agreements, with other trade organisations takes considerable time and endeavour, and the UK civil service is understood to be fully stretched by the process.

On the later basis some commentators therefore suggest Article 50 might only be invoked after the French and German elections.

The UK has already transposed and adopted the Public Contract Directives (2014/24/EU and 2014/25/EU), into the Public Contracts Regulations 2015 (England, Wales & N. Ireland) and The Public Contracts (Scotland) Regulations 2015. Accordingly these regulations which fully align with all other EU member states will continue to apply until such time as the UK or the EU repeals them. There appears to be no appetite for their early repeal in the UK, and furthermore it’s considered there will likely be insufficient civil service time available for the UK to countenance their repeal, in all events for a number of years.

The terms and conditions of any future trading agreements between the UK and any others remain as yet unknown and indeterminable. If however the UK were to finally adopt an EFTA type of agreement with the EU there would be no effective change from the requirements of the EU Public Contract Directives for architectural commissioning, works supplies or other service contracts, and cross border trading would continue.

However if as has been touted a Canadian style trading agreement was reached it should be noted that this does not cover the free movement of services (architecture).

If Article 50 is invoked and Brexit moves to being delivered it is highly likely there may be a fudge – and we will await information about what might be offered by the negotiations as they develop and are communicated.

Accordingly the UK will continue as part of the EU single market, at least until formal departure. After which date the UK will continue for considerable time to operate its own internal market under the same regulations and aligned to all other European countries on the basis of the same EU Public Contract Directives, but the terms of any cross border trading at that stage after formal departure remain an unknown.

We would sound a note of caution however. In the soft politics of the real world opportunities for European cross border trading might be anticipated to impact UK opportunities in Europe determined by the perception of a UK departure by other Europeans. Although difficult to evidence this may have a subliminal adverse impacts. Where impacts may also be greatest is in the access by British Institutions to the Europeans finance for construction and infrastructure investment.

If any impacts come to light in construction procurement and architectural competition practice otherwise we would be pleased to receive your feedback.