How Brexit will affect public procurement

The negotiations with the European Union are ongoing but, at the moment, the UK government…...

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The negotiations with the European Union are ongoing but, at the moment, the UK government has not reached a deal. This is worrying, as the formal separation from the EU is imminent, with much depending on the deal that the government can get, especially for public procurement.

Almost 20% of the GDP of the UK, and 14% of the GDP across Europe, is used on public procurement. So, it makes sense that the funds are used prudently to benefit communities and businesses.

Public procurement regulations

Public procurement expenses are made on the basis of Public Procurement Regulation. Initially, the EU used the Treaty of Rome 1957 to legislate public procurement. In the 1960s, 70s, and 80s, the UK was more involved but the EU Directives introduced at the time were not very effective, being restrictive and without rules.

In 2004, the EU formed the Public Sector Directive that laid down common rules for EU members. In the UK, this rule was enacted by the Public Contracts Regulations 2006. But, public sector organisations did not conform to the rules, and a new set of Directives to remedy this was enacted in the Public Contracts Regulations 2009.

Understanding Public Contracts Regulations 2015

The regulations enacted in 2009 were restrictive, litigious, complicated, and viewed as anti-local and anti-SME. After an extensive consultation period, a new Public Procurement Directive saw the UK enacting the Public Contracts Regulations 2015.

These new laws were fair, transparent, and non-discriminatory. Also, they were less complicated, pro-local and SME businesses. The regulations removed uncertainty, thereby becoming less litigious. The main aspect was that the new set of public procurement laws were pro-SME and focused on community benefits, apprenticeships, local employment, and training and community services.

What happens after Brexit?

After the UK leaves the European Union, it must still comply with the Public Contracts Regulations 2015, but will not have to follow it. The UK government would have to develop a comprehensive and clear public procurement policy to benefit local communities and businesses.

Based on the negotiations that government has for continued European Economic Area, European Free Trade Association, and Government Procurement Agreement, the UK would have to comply with the existing rules that ensure open, fair, transparent, and non-discriminatory public procurement.

Ed Cross

Ed founded Odesma in 2014 with the explicit intent of creating a new kind of procurement consultancy founded entirely on cloud principles. Deploying best-of-breed subject matter experts alongside the best on demand technology to deliver rapid and effective change for customers.

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