Brexit and Public Sector Building: Implications and Opportunities

It’s already been over two and a half years since the UK voted to leave the EU, and we are now facing a further extension that takes us into 2020. Although the exact outcome is still unknown, the public sector must be prepared for both the risks that our exit poses and the opportunities it will present, writes Mark Robinson, Scape Group’s Chief Executive.

There’s no doubt that building in the UK has been impacted since the referendum vote. Project pipelines have slowly diminished, the UK’s access to vital construction skills has been limited, and we have seen price impacts on material and product imports. Similarly, local authorities have been hit with a cruel cocktail of fiscal austerity and the loss of €10.6bn worth of Structural Funds which has been vital in funding investment in many parts of the UK.

Last year, the Government announced that a Shared Prosperity Fund would be introduced to mitigate against the loss of EU structural funding; however, as with much of Brexit, there is still a continued lack of clarity on the detail, and as of last month, there was still no timetable in place for its introduction. This makes it incredibly difficult for communities and local authorities to plan beyond the next couple of months.

Regardless of Brexit timescales, local authorities need certainty and clarity for the future so they can continue to invest in local communities. It’s essential that we achieve a smooth transition in funding so as not to disrupt the day-to-day delivery of vital services.

But although exiting the EU has brought plenty of complexities and risks; it also presents an opportunity to improve procurement processes in the UK.

In a post-Carillion era, good public sector procurement practices have never been more important, and once the UK leaves the EU, it will have the ability to create its own procurement system which is simple, more flexible and less bureaucratic, which can act as an incredible force for change.

Prices and quality have long dominated our current process, but social value practices should also be embedded within decision-making, ensuring that projects leave a legacy within communities. As we leave the EU, it is time to take a best practice approach and create a new UK procurement model that delivers maximum value for local communities, as well as the economy.

Scape Group has been championing this more holistic approach to assessing bids for several years, and we have long called for a 20% minimum social value requirement on every public sector project. If this policy was put in place, almost £57m could be unlocked for local communities on Government contracts alone. This is a huge opportunity for the public sector.

By acting as a catalyst for change, public sector frameworks can create social value not only through the physical environments they help to create and maintain, but also the economic activity they generate, both locally and nationally.

Local authorities must engage with Government and stakeholders to outline the importance of community investment and the need for a policy which supports the industry through a smooth exit from the EU. But at the same time, we must not let the opportunity to improve our procurement systems pass us by.