Public Procurement Analysis

Ships in the Night – UK and EU Public Procurement Policy in 2024

This is a blog about public procurement. Although I’ve published a few pieces on Brexit since June 2016, there is no lack of better sites to go to for analysis of that hydra-headed beast. With January drawing to a close and little sign of a happy or even tolerable resolution to this national psychodrama, I thought it might be worth trying to see beyond the fog of the present to ask where EU and UK procurement policy may end up in five years’ time. Audacious I know. But let’s begin with a concrete development – the draft UK Public Procurement (Amendment etc.) (EU Exit) Regulations 2019 published in December.

The draft regulations represent an attempt to preserve the substance of EU-derived procurement law in the UK while transferring certain powers currently exercised by the European Commission to the Minister for the Cabinet Office. The regulations are designed to be relatively uncontroversial and do not introduce substantive changes, although they will require some adjustments to the practices of UK contracting authorities. Most notably, in the event of a no deal Brexit, notices will need to be sent to a new, as yet unveiled UK e-notification system instead of to the Official Journal/TED. The draft regulations also provide that for a period of eight months after Brexit day, economic operators from EU countries and other parties to the WTO Government Procurement Agreement will continue to be subject to the same treatment as UK operators. It is expected that the UK’s accession to the GPA in its own right will be completed within this eight month period, meaning that such treatment would continue subject to the terms of the UK’s accession.

So far, so uncontroversial. But what clues do the draft regulations give us about the future direction of UK procurement policy? And is this different to the direction of EU policy? The overall intention is to maintain the stability of both the UK’s internal procurement market and access to EU and international markets for UK operators. While the regulations can be seen to ‘take back control’ by repatriating certain functions currently exercised by the Commission, these are hardly the stuff that Brexiteer dreams are made of; I doubt anyone voted Leave because they wanted procurement thresholds to be calculated in London, rather than Brussels (based on the exact same system) or because they objected to using the TED portal. What is certain is that these changes will require additional cost and time to implement, and create a few headaches for civil servants, procurers and bidders.

What the regulations do not do, is to remove red tape, introduce a ‘Buy British’ policy, promote socially responsible procurement or involve local or regional stakeholders in developing policy. Perhaps there will be time to do these things later on. But the opportunities to do so will be constrained by the desire to achieve trade deals which include access to government procurement abroad, the price of which will be reciprocal access to UK procurement and the guarantee of fair and transparent procedures. As I have argued elsewhere, the 2014 EU procurement directives go much further than the WTO Government Procurement Agreement in reconciling the economic, social and environmental objectives of procurement. This direction looks set to continue under the strategy adopted by the Commission in 2017, which includes measures to increase the uptake of innovative, green and social procurement.

What will the landscape be in 2024? The 2019-2024 Commission will be nearing the end of its term, along with the European Parliament. The UK Government will have changed, at least once. Some fragmentation between the UK’s constituent jurisdictions is to be expected, although the scale of this remains to be seen. The UK will be pursuing its international trade ambitions, and will be cautious about adopting any radical changes to procurement law which might put off trading partners. Procurement will become a bargaining chip in larger negotiations regarding trade. Developing truly bottom-up procurement policy driven by citizen needs and expectations would be the radical option; more probably it will be driven by international deals and institutions which are considerably less responsive and transparent to citizens than the EU is. On the other hand, EU institutions will find it difficult to draw back from the engagement with social and environmental issues which characterised the last reform of the directives – and which lead to unprecedented public interest in the procurement rules.

Ultimately the UK and EU may choose to pursue very different procurement policies: one aimed at securing the maximum number of trade deals, and another aimed at protecting the integrity of the single market while incorporating the social market economy principles set out in the Treaty of Lisbon. Such divergences could lead to very different legal frameworks despite the shared objectives which both jurisdictions have for government procurement: transparency, fairness, sustainability and competition. They would also inevitably increase costs for companies bidding in both markets, and reduce the transfer of knowledge and innovation between public sector bodies in an area which has the potential to support sustainable economic growth. Forget the ferry from Ostend to Ramsgate; we should all be worried about these bigger ships passing in the night.


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