Brexit and Procurement – When are EU rules not EU rules?

Following the Leave referendum result announced on the 24th June there has been much speculation about how the decision will affect our lives going forward.

Public Procurement legislation was raised during the campaign as a European rule that British people would be happy to see go, so is that likely to happen and if so, when?

Although commonly referred to as EU procurement rules, or OJEU (Official Journal of the European Union), the legislation in question is actually UK law. The originating EU legislation (EU Directive 2014-24-EU) was a directive, which is an instruction to each member state to create their own individual, national law to reflect the European legislation. Consequently although we refer to EU tenders, the public procurement process is actually governed by UK statutory instrument Public Contracts Regulations 2015/102 (PCR2015).

Technical details to one side, what this means is that UK public procurement law exists independent of European legislation, and will continue unchanged with or without EU membership in the short to medium term.

Once Brexit has taken place there will, of course, be the option for the UK to repeal, amend or replace the current PCR2015 with some alternative legislation. However, before we get too excited at the prospect of a regulation-free future where we can undertake our purchasing free of the shackles of statutory limitations, we should consider the government’s historical approach to public procurement control:

UK has had public procurement laws prior to the introduction of European rules, so is unlikely to adopt a ‘no rules’ policy for public sector expenditure.

The government often uses procurement legislation to deliver political objectives, such as pushing for SME engagement, achieving social and environmental outputs through public procurement via the Public Services (Social Value) Act 2012, promoting shared services to attempt to consolidate public sector resources, tackling poor payment performance across the private sector by cascading implied payment terms or pushing for large corporate organisations to take responsibility for policing the Modern Slavery Act 2015 in their supply chains.

The current PCR2015 includes a number of additions made by the UK government that are over and above the obligations demanded by the EU Directive, so it is reasonable to expect any future regime to include significant regulation at a similar level of intervention, even if the flavour of the rules change to reflect national interests.

Given the last set of procurement regulations lasted for 10 years before being revised, and the current UK PCR2015 is just over a year old, it is probable that the government will have other more pressing priorities for legislative overhaul following our divorce from our European partners.

With the timescales built into the legislative exit process (2 year notice period following the Article 50 trigger, which at the time of writing does not yet have a schedule date), followed by the huge task the legislators and government face reviewing and potentially changing the large range of laws that stem from Europe (13% to 60% of UK laws, based on referendum campaign claims by both sides), from a procurement law perspective we should expect business as usual for the foreseeable future.

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