How will a vote for Brexit affect public sector procurement?

Before you groan and click away, let me reassure you that this blog does not take a stand either way on the EU referendum. It simply considers the implications of a Remain or Leave decision on public procurement rules and policy – TMCS’s core business – and how this may affect suppliers to the public sector.

Public Sector procurement in England, Wales and Northern Ireland is currently governed primarily by the Public Contracts Regulations 2015, along with various lesser regulations. Similar provisions for Scotland are contained in the Public Contracts (Scotland) Regulations 2015. These Regulations were passed in response to a new EU Directive on public procurement, the EU Public Contracts Directive 2014.
Procurement in the EU is based on the essential EU principles of

• Prohibition of discrimination on grounds of nationality
• Free movement of goods
• Freedom to provide services
• Freedom of establishment

The procurement process is designed to achieve

• Equality of treatment
• Transparency
• Mutual recognition
• Proportionality

A ‘Remain’ decision is unlikely to see any significant change to current legislation as we will continue to be governed by the EU Directive, as interpreted through our own Regulations.

A ‘Leave’ decision theoretically allows the UK to make whatever regulations it wishes and so could lead to a much changed process for public sector procurement.

However  if the UK leaves the EU, in order to continue trading with Europe we will have to either join the European Free Trade Association (EFTA) or negotiate a separate trade treaty. EFTA ‘membership’ requires countries to abide by EU legislation as a condition of belonging and those countries who have negotiated separate agreements have also had to agree to abide by EU rules as part of their agreement.

So a ‘Leave’ decision is also unlikely to lead to any significant changes.

The one proviso to this is that EFTA members (who are not part of the EU) are subject to scrutiny by the EFTA Surveillance Authority, which ensures that members abide by the rules. So a decision to leave the EU could actually lead to closer scrutiny of our procurement rules and practices than if we remain an EU member.

That aside, regardless of what various politicians of differing hues and views may promise or threaten, on this particular issue, the position is likely to remain largely unchanged whatever the referendum result.