A plan for Brexit – what the industry needs to make it work

Nelson Ogunshakin
13 July 2016

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After Brexit

ACE chief executive Nelson Ogunshakin outlines some key priorities for the construction and infrastructure sector that will need to be addressed during the forthcoming Brexit negotiations.

They say a week is a long time in politics. These days however  our political landscape changes by the hour, and sometimes within minutes. In the fast-paced world we have lived in since the EU referendum vote, you may be forgiven for wishing for the quieter and calmer days of times gone by, but that, sadly, is not a luxury we are able to afford at the moment. 

As Theresa May enters Downing Street, we should recognise the contribution that David Cameron has made to our industry in his six years in office. It was the coalition government that he led that recognised the importance of infrastructure spending to economic growth and established the National Infrastructure Plan. It was under his leadership that our industry gained a more stable investment cycle in which to conduct business. We still have issues around connectivity and economic dislocation across the UK, but a start has been made and it is only right that we  acknowledge that as David Cameron leaves office. Undoubtedly, healing this north-south divide and rebalancing the economy will be one of the real challenges that will face the new government in the months and years to come. 

"Undoubtedly, healing the north-south divide and and rebalancing the economy will be one of the real challenges that will face the government in the months and years to come."

In all the political turmoil that has engulfed the nation, the reality of the task ahead of us can get a little lost and seem to be an unrealistic prospect but nothing can be further from the truth. Both main parties may have been occupied by leadership contests in the last few weeks but this does not change the fact that the wheels of Brexit are slowly moving, unseen by the public gaze. 

A new unit in the Cabinet Office tasked with looking at the options for Brexit has been established and is headed by Oliver Letwin. This unit has already begun to have meetings with the wider business community with the aim of establishing where the UK negotiating priorities should be. A new minister for Brexit is also likely to be appointed soon. 

Speaking before the Foreign Affairs Committee last week, Oliver Letwin stated that although his team wanted to hear the views of certain industries this could not be done in a chaotic way. Instead industries should approach their engagement with the government in an organised and systematic way. What this means is that the government sees representative organisations, such as ACE, as forming the vital bridge between industries and the government to ensure that the right information is presented  before the right people in the right way.

This is something that ACE has already begun to do for its members as we plot our course through the choppy waters of Brexit. Over the next few days, I will be hosting a series of round tables with our members across the UK to determine what the key concerns for our industry are and what issues are most important for our future.  To this end, I would ask consultancy and engineering firms  to send me any evidence-based issues that might impact positively or adversely as a result of the recent referendum. As appropriate, we will forward this information into the review channels of the engineering community.

Provisionally, I have identified four main areas that will require detailed work to ensure we retain the right balance for the regulations and skills going forward.

Public procurement - The existing UK procurement legislation, which implements EU procurement directives, may need to be amended post Brexit.  Whether this is the case or not will depend on the relationship we have with the EU. If the UK retains access to the single market then it is inevitable that we will continue to apply EU procurement procedures. Should the UK seek to leave the single market then it is likely we will apply the procurement rules under the agreement on government procurement established by the WTO, as this will allow us to access a wide number of markets. The other option could be bilateral trade deals with EU members that could lead to a blending of the other two options. All of this will need careful examination.

Funding - Currently the EU is a substantial provider of funding for various infrastructure projects in the UK and this funding is now in jeopardy due to the Brexit vote. We need to determine how this funding is replaced and how we can attract further international funding for UK projects. The continual development of our infrastructure network will be vital for our future economic growth.

Staffing - Many companies in our industry have a significant percentage of their workforce that are EU nationals who now face an uncertain future. The long-term security of these employees must be an industry priority going forward. But over and above that we must determine whether the UK will be able to access the best talent in the word regardless of where they are located. With the existing pressures on staffing provision, due to the infrastructure pipeline, we cannot afford to reduce the pool of skilled staff our industry can draw from. 

Industry standards - For decades now these have been set at European level and are now not just European but internally accepted standards that govern the work that we do. Whether the UK retains access to the single market or removes itself completely, it makes sense for the UK to continue to use these standards. Our political leaders will need to understand the importance of this to our industry.

"We must determine whether the UK will be able to access the best talent in the world regardless of where those people are located. We cannot afford to reduce the pool of skilled staff our industry can draw from."

ACE will be in the vanguard of the discussions that will take place with the government in the lead-up to the triggering of Article 50 and the negotiations that will follow. We accept that Brexit is inevitable and we will work to ensure that our industry will make it a success.  

Notwithstanding the ongoing leadership election within the opposition party, it is important that new government focuses on the key issues impacting our economy, effects appropriate actions to stabilise the volatility in the market and above all demonstrates credible leadership and policy certainty on investment in a committed infrastructure programme.