28.12.16
A united approach for local government procurement post-Brexit
Source: PSE Dec/Jan 17
Paul Bell, national officer for local government at Unison, looks at the long-term impact of Brexit on public sector procurement, and what councils should be doing to plan ahead for the period of uncertain change.
The decision of the UK’s electorate to leave the EU undoubtedly presents massive challenges for local government. Post-Brexit, we are likely to face a long period of uncertainty and this follows the massive budget cuts triggered by the government’s austerity agenda, with billions of pounds and nearly 700,000 jobs cut.
The full implications for Brexit are neither understood nor known. But ‘Brexit means Brexit’, so we all need to prepare for what is about to happen. However, given that most councils are under-resourced, overstretched and in some cases at breaking point, there is little chance they will have any employees available to work on planning for Brexit.
Engagement and planning
That said, Unison believes engagement and planning are vital. Councils and combined authorities will need to assess the impacts of how, what and why they procure. This is while working with their trade unions, the Association for Public Service Excellence (APSE), the respective local government associations across the UK and others on a clear, united approach to how services in local government are procured and delivered.
Before that planning can start, it is important to see where the EU currently has an impact on funding procurement activities.
For example, protecting river corridors, ensuring exchange programmes continue where young people learn about democracy in other countries, and developing business opportunities for minority communities. Great uncertainty exists over EU structural funds and how they will be replaced.
Understanding EU funding
Local authorities need to understand how much money they receive from the EU and how to lobby to replace this lost funding. This is if they want to protect these kinds of services. According to the House of Commons Library, the UK was due to receive £5.3bn in EU structural funds in the 2014-2020 programming period. If Article 50 is triggered in 2017, you can do the maths.
Under current procurement rules, everything over a certain value has to go to tender. It is unclear how the Great Repeal Bill, once it sweeps away the European Communities Act (1972), will absorb the procurement regulations that we use for major purchasing decisions. Finding political consensus will be a huge challenge. It is, therefore, quite unlikely that two years will be enough to agree new legislation, and so councils will find it difficult to make accurate financial and procurement decisions.
In 2013-14, the UK public sector spent £242bn on procurement of goods and services. The legal framework for that originates in the EU, along with some limited domestic legislation. This framework covers a range of services such as energy; waste; employment; the environment; air pollution; consumer protection; workforce and employment; health and safety; and trading standards, regulatory services as well as state aid and public procurement.
So the key questions local authorities need to ask include:
- What is procured?
- Where is it procured from?
- How is it funded?
- How will lost funding be replaced?
- Who in the council is monitoring the Great Repeal Bill and considering its possible impacts on the local community?
- Once EU procurement rules no longer apply, how will each council adopt procurement policies that ensure transparency and fairness?
- Who are your suppliers, including second and third tier?
- How will your local small to medium-sized supply chains be affected?
- What are the opportunities to invest in the local economy and workforce?
Then there is the human cost to the workforce. Councils not only need to consider their own directly-employed staff, but also the impact they have on the wider local economy, planning for schools, housing and the NHS. A large proportion of migrants work in social services and the health sector. With an ageing population and increased demands on social care, the question is how will demand for support staff be filled, once freedom of movement is a thing of the past?
Finally, local government finance is in crisis because of state-imposed austerity. Austerity is a political choice. In order for Brexit to work, austerity needs to end and all parts of the supply and delivery chain, including the workforce and suppliers, must join together to make that future one of mutual benefit. Without this, both service providers and employees will feel the pain.
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