Brexit and Public Procurement

Following the Conservative landslide in the general election, we thought it would be timely to post a quick reminder about the implications of Brexit for those of us working in public procurement.

Given the vicissitudes around Brexit to date, it feels quite dangerous to make predictions. But the healthy Conservative majority in the newly-constituted House of Commons will presumably allow Boris Johnson to get his “deal” ratified and that we will therefore leave the EU with a deal on 31 January 2020.

If that happens, we will enter a transition period, ending in December 2020 (unless changed) during which the EU procurement directives will continue to apply by default. But even after the end of the transition period, the procurement regulations will continue to apply, since they are now a part of UK law and are on the UK statute book.

Following the end of the transition phase, however, the UK will have the new freedom to alter the procurement regulations, although it is doubtful whether this will be a high priority on the government's legislative agenda.

One possibility currently contemplated in the NHS Long Term Plan is that clinical health services could be removed from the scope of the procurement rules, once the EU directive that brought them into scope no longer has any bite in this jurisdiction. The Long Term Plan aims "to free the NHS from wholesale inclusion in the Public Contract [sic] Regulations”. The Conservative manifesto stated that "Within the first three months of our new term, we will enshrine in law our fully funded, long-term NHS plan" and it will be interesting to see whether this emerges as a reality next year.

Predicting what might happen to the public procurement regime in the longer term is tricky, since it depends to a large extent on what ongoing trade deal is reached with the EU (and this could take years to bottom out). A range of scenarios exist. 

At one end of the spectrum we might have a trade deal with the EU which requires us to treat the public procurement directives as binding and which therefore would preclude any significant change to the regime we currently have.

At the other end of the spectrum, we might reach a deal (or no deal) which leaves us with no such obligations and bound only by the much looser framework set out in the WTO Government Procurement Agreement, to which we will automatically become a party when we leave the EU.

Overall then, the forecast is for business as usual in the short term with the possibility of change in the medium and longer term.