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Procurement top of the agenda as infrastructure investment becomes political priority

  • Market Insight 17 December 2019 17 December 2019
  • UK & Europe

  • Infrastructure

Infrastructure investment has dominated the U.K. headlines over the past few weeks, with each political party, not least the victorious Conservative Party, putting store in it as a significant vote-winner in the run up to last week's election.

Procurement top of the agenda as infrastructure investment becomes political priority

But these promises of reinvigorating public sector spending have only served to prompt questions from the construction industry about the exact form public procurement law will take post-Brexit.

Much depends on the shape of the future relationship that the UK will have with the EU post-Brexit.

A Brexit that sees the UK joining the European Economic Area or the European Free Trade Association would require it to comply or align with the existing and future EU legislation relating to public procurement, with no material change. This seems less likely following the election result.

If the Withdrawal Agreement is agreed, the existing regime will continue at least until December 2020. The Government has raised the possibility of consulting on changes to procurement as early as April 2020, to focus on changes which would come in after the end of any Withdrawal Agreement. In a 'no deal' scenario, the UK will sign up to the World Trade Organisation (WTO) Government Procurement Agreement (GPA) but again the existing rules will continue until they are repealed and new legislation is brought forward. Any public procurement activity started before the law changes will be regulated by the current regime.

There could be the opportunity to remove what are considered to be the more onerous provisions of the EU's legislation, and introduce more flexibility. The government has talked about how UK public sector bodies could target opportunities on contractors based in the UK. This is already on the cards with Prime Minister Boris Johnson's suggestion that he will oblige all major public sector procurement projects to hire British workers. Whether these provisions, which are broadly incompatible with EU law, ever come to pass will depend on how close the UK and EU's trade relationship is in future. A closer relationship is likely to see the EU require that a 'level playing field' is maintained in procurement and state aid regulation.

Taken all together, it's clear that over the next twelve months procurement is rising up to the top of the government's agenda. We could witness the first steps of important change in this area in 2020, regardless of whether we get any clarity or closure after 31 January 2020.

Read the rest of our projects & construction predictions here.


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