Chloe McSwaine - Bond Dickinson LLP talks about how Brexit would affect procurement.
The EU public procurement rules have been implemented in the UK by the Public Contracts Regulations 2015 (along with the Utilities Contracts Regulations 2016 and the Concession Contracts Regulations 2016, which come into force on 18 April 2016). If the UK were to leave the EU, although the EU Procurement Directives would cease to apply to UK contracting authorities and utilities, the UK legislation that implements the EU rules would continue to apply unless and until repealed.
Given the current scrutiny of the use of public money in the UK and the pressure to use public funds effectively and efficiently, the EU procurement regime principles of seeking to obtain value for money for public sector spending by running some form of competition for works, supplies and services is likely to remain, although the cross border interest test may no longer apply.
The UK has supplemented the EU Procurement Directives in a number of areas, including specific provisions on ensuring accessibility for SMEs. The Government is therefore unlikely to adopt a wholesale repeal of the legislation. It is also unlikely that simplification of the current UK procurement legislation will be a top priority for the Government if the UK leaves the EU.
Public procurement is likely to remain “business as usual” for UK contracting authorities, while UK businesses competing in the EU may lose the benefit of the application of the EU public procurement rules by EU contracting authorities, although the UK may negotiate a separate trade treaty to give some protection to UK businesses trading in the EU.
Many public sector projects and activities involve an aspect of EU funding and public and other bodies in the UK can currently apply for regional and social funding through the European Regional Development Fund and European Social Fund. In the current round of funding (2014 to 2020), the EU has emphasised research and innovation, transport and energy as key areas for the EU’s future where funding is available through the European Structural and Investment Funds.
In order to qualify for such EU funding, applicant organisations must be established in the EU so such funding would no longer be available to UK bodies, although a non-EU organisation can still participate as a subcontractor or collaborating partner. Whether an exit from the EU would trigger clawback of any EU funding already granted to UK public bodies (as the recipient would no longer be established within the EU) would depend on the terms and conditions of each individual grant and whether the EU would seek to enforce the terms of such grant funding.