Brexit – risk and opportunity for the public sector
In the aftermath of the UK referendum result, organisations in all sectors face increased uncertainty. Public sector bodies are no different, but there may be opportunities too.
Public sector bodies currently receiving European Union funding face a period of particular uncertainty. Until Brexit negotiations begin, it is impossible to know how funds will be withdrawn, whether in a staggered manner or through a sudden turning off of the tap.
The viability of EU-funded long-term projects extending beyond the next two years will need to be assessed. Given the Conservative Party leadership contest, UK government policy on whether and how it will compensate public entities for loss of EU funds won’t be clarified for some time. Nevertheless, organisations need to quantify their likely costs resulting from Brexit, including consideration of any risk of potential funding clawbacks.
While change triggers risk, it also creates opportunities. From a national perspective, the UK public sector will almost certainly need to expand to take over some of the functions currently provided by the EU. Potential areas affected include the regulation of agriculture, fishing, transport and competition rules. A comprehensive estimate of the investment needed and the costs of running these functions in the UK is required.