Economy and Infrastructure

30.08.17

An opportunity or a self-inflicted wound?

Source: PSE Aug/Sept 2017

A year after the UK voted to leave the EU and months since Article 50 was triggered, it’s still unclear what direction Brexit is going to take. PSE’s Josh Mines reports from the Public Sector Show about what the opportunities and consequences could be for the public sector post-Brexit.

Over a year on, and despite an ever-changing political climate that has seen Theresa May call and subsequently regret a snap election, one topic lurks ominously in the background.

Despite the government’s mixed messages about Brexit, it’s an issue that officials across the public sector are anxious to resolve and get some clarity over. In July, experts at Centre for Cities gave the stark warning that Brexit was set to hit the economy hard all over the country, and mostly in affluent southern cities. During a panel session at this year’s Public Sector Show it was clear that these kinds of reports have rattled leaders in the sector.

It was also obvious that the UK’s process of leaving the EU has been made even harder by the fact that there just isn’t any clear consensus on what direction Brexit will take.

In the short session, Brexit was described as both an “opportunity for workforce planning” and simultaneously a “self-inflicted wound”. From some quarters in local government, Brexit has certainly been seen as more of a hindrance than a help to the UK in 2017’s tumultuous political climate.

 

Uncertainty to wreak havoc with workforce

Cllr Peter John OBE, executive member for business skills and Brexit at London Councils, was clear in his message about Brexit’s impact on the workforce in the UK. “There are no opportunities for local government in London,” he said. “There are consequences which we shall deal with and clean up as best we can.

“What Brexit has created is uncertainty. Nowhere works at its best in those conditions. It has created uncertainty about our friends and neighbours who are EU nationals, uncertainty in our high streets, and in the housing market.

“In London’s construction sector, 30% of the workforce are EU nationals. We need 60,000 more workers in London and the south east just to keep up with demand. Approximately 15% of those working in the financial sector are EU nationals, a third of those in the tech sector are, 10% of the NHS and 12% of retail. And the government response has done nothing to reduce that uncertainty yet, especially with the status of EU nationals.”

This wasn’t a view shared by the entirety of the panel. Caroline Nugent, director of HR & OD at oneSource, London Boroughs of Havering & Newham, and president of the Public Services People Managers’ Association, said that Brexit could offer a great opportunity for workforce planning. However, she also warned that the public sector needed to act quickly to mitigate the effects of the UK leaving the EU.

“Some of the stuff we have to do is going to come around soon if we don’t act now,” Nugent explained. “Somehow we have to look at how we encourage young people into these sectors. There’s an opportunity for schools to look at other alternatives besides university.

“We have to drive and change the idea that pushes people to go to university instead of looking at other options. That means looking at apprenticeships and getting older workers back so they can reskill. It is estimated that 27% of EU nationals are looking at moving this year – which is not sustainable. We need to start planning for this.”

 

Devolution absolutely key

Predictably, devolution was brought up as an initiative that needed to be pushed more to prepare both local and central government for the challenges that will come about as a result of Brexit.

“The key opportunity presented by Brexit is around localism and devolution agendas, particularly with combined authorities, the new mayors and Local Enterprise Partnerships,” said Bev Hurley CBE, chair of the Institute of Economic Development.

“However, the challenge of the localism agenda is around skills deficits and leadership deficits at a local level. So, I think there is a great deal more to do to improve the capacity and capability of leadership – particularly around how we collaborate and overcome political differences.”

Director of the County Councils Network (CCN) Simon Edwards used particularly strong words when describing the progress that has been made so far in creating a dialogue between councils and Whitehall.

“It’s fair to say that after a year its very obvious that there’s no seat, there’s no table and there’s probably not even a single room or group of people for local government and the public sector to engage in over Brexit,” he argued.

However, Edwards also said that there were still many reasons for local authority figures to be hopeful that devolution could actually start to gain momentum.

“I’ve had discussions with ministers and senior civil servants and they have said that if we make noises and get our act together they may have to take notice of our views. “We have an uphill battle to make sure those issues that need to be raised, are raised,” he explained.

“Local government and the public sector has a really important role to play in identifying the place-based effect of Brexit that government will just not see.

“Devolution and decentralisation is absolutely key. The evaporation of powers from the EU cannot just sit in Whitehall; we are the most centralised democracy in the Western world and we cannot afford for that to continue.

“We need to secure and develop a replacement for EU structural funds to make sure that communities who rely on that do not fall of a cliff edge.”

Though there are some in the public sector who are trying to see the opportunities presented to the UK outside of the EU, it appears that the job of many in local government and the wider public sector will be in reducing the harm caused by Brexit over the next two years.

However, it is clear that there is some ground to make up before that happens, and now is the time for authorities to make the right noises and be prepared to weather what could be a torrential storm once the Brexit process is complete.

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