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Public Procurement – What happens after Brexit?

It seems a long time ago we were being told during the Brexit referendum that leaving the EU would save us £1.6 billion a year in procurement costs. Since then the UK has left the EU but still remains signed up to the EU public procurement rules until 11pm on 31 December 2020. What happens next depends in part on the outcome of the EU/UK trade negotiations but also on the broader question of how the UK wants to run public procurement.

Very little information about public procurement has emerged during the Brexit trade negotiations. Unlike tariffs, fishing and state aid, procurement itself has hardly been mentioned. If we end up with no deal, we know that the UK will fall back on its membership of the WTO’s Government Procurement Agreement (‘GPA’), which will give UK businesses continued access to some EU public contracts. But it will not be the access currently enjoyed, as explained in our briefing on the UK’s accession to the GPA for further details.

We also know the EU is looking for a procurement deal which goes beyond the commitments in the GPA. That is hardly surprising given the size and attractiveness of the UK procurement market to EU businesses.

In contrast, the draft Free Trade Agreement proposed by the UK does not include procurement at all, suggesting the UK are happy for the future EU/UK procurement relationship to be based solely on the GPA. No doubt that is part of the UK’s negotiating position and greater access to the respective procurement markets will be granted, along with a tariff-free deal, if the larger obstacles to a trade deal can be overcome.

Even if a procurement deal can be agreed, we can be reasonably confident the UK will not agree to maintain the EU procurement rules indefinitely. Conservative politicians and advisers have lined up to criticise these rules as overly bureaucratic, expensive, wasteful and poor at delivering results. Whether those criticisms are justified is debatable and many will recall the UK had a close hand in drawing up the EU rules in the first place. It is clear, however, that the rules will eventually change but, to what, remains unknown.

So far the UK government has only enacted very modest changes to the procurement regulations following Brexit. Largely the changes are technical to ensure the regulations are consistent with the UK’s status as a former EU Member State.

References to the European Commission having any say in UK procurement have been removed as have the rights of EU businesses to bid for UK contracts outside of the GPA. And the UK government has introduced a new electronic system for advertising tenders and publishing awards to apply in place of OJEU, to be called ‘Find a Tender’. Besides that, nothing of substance will change immediately post-Brexit to the way UK public bodies across the UK have to run tenders and evaluate bids.

Back in 2019 the UK Cabinet Office announced the establishment of ‘the Procurement Transformation Advisory Body’ to advise the government on potential proposals for reforming UK public procurement.

As far as we are aware, neither the government nor the Procurement Transformation Advisory Body has published any details of what those proposals might be. On 4 November 2020, Dan Carden MP made a written request to the Cabinet Office to publish the agendas and minutes of the Procurement Transformation Advisory Panel’s meetings. Unfortunately, that request was rejected, with the Cabinet Office stating that the ‘practice of successive administrations’ was not normally to disclose these details.

As with much of Brexit, little can be said with certainty at present. The expectation is that the UK government will at some point publish a Green Paper on the future of public procurement in the UK although there is no timeline for this happening. Until then, the most we can report is that nothing is likely to change in the very short-term post Brexit besides what is outlined above.

What happens next depends in part on the outcome of the EU/UK trade negotiations but also on the broader question of how the UK wants to run public procurement.

Each of these promise some improvement to the current procurement rules. Whether the UK will truly be able to revolutionise procurement to deliver the type of transformative efficiencies and value for money on public projects that politicians talk of is yet to be seen.

We will be publishing further updates on the future of public procurement in the UK as the position becomes clearer.

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