The long and winding road to Brexit


An update on Brexit negotiations by Julia Goldsworthy, Chair of CIPFA's Brexit Advisory Commission for Public Services.

As we approach the first anniversary of the triggering of article 50, the government has deployed a series of ministerial speeches that have mapped out the ‘road to Brexit.’ It’s a programme that will have to achieve a lot to be considered a success. There are many outstanding questions on the future relationship between the EU and UK to be resolved, and transition details need to be both set out and agreed in just a few weeks to keep the negotiation timetable on track. 

But the past 18 months have been light on both detail and decisions from government. Some of the most difficult issues, particularly around the customs union and immigration, remain unclear. And it’s still far from obvious whether the spectrum of views within the Conservative Party can be held together as the process unfolds. With only seven months remaining for negotiations to finalise the scope of the future relationship between the EU and UK, real and rapid progress must be made on all fronts.

While recent speeches have sought to provide clarity on some of the big Brexit issues, what is still missing from the conversation is how Brexit will fit into a wider public services agenda. If the public really is to see how a new relationship with the EU will benefit them and the communities they live in, we also need to know how the services they use and rely on fit into the equation. CIPFA’s Brexit Advisory Commission for Public Services has been working to fill this space by offering its perspective on how Brexit can be a transformative moment for the sector, if the opportunities are seized and the risks avoided.
Late last year, the Commission released a paper that examined the EU funding flows that are entering the UK system, which amount to €3.4bn each year, and explored how these could be reworked once the UK has left the EU to maximise their impact. It found that the current UK model of funding distribution poses significant barriers to repatriating EU resource in a way that can prioritise both needs and outcomes. Modernising the funding system would create greater potential to amplify the benefits of existing and planned policy programmes, such as the national prosperity fund and the devolution agenda.
Increasing the scale of devolution and giving regions a genuine role is a priority that the Commission shares with many public service leaders and organisations in the UK. Indeed, during our regional events programme, we have heard from key sector thinkers and practitioners, who have argued that there is an opportunity to repurpose fiscal policy in a post-Brexit scenario. For instance, controls over any replacement structural funding scheme could and should be devolved. 
But there are challenges to pursuing this policy programme too. There is a consensus from the contributions we have received that pulling off meaningful fiscal devolution is no easy feat and there is much to work out on how best it could be supported. For example, is a more federalised UK required to bolster the role of regions, should the model of Mayoral Combined Authorities be expanded and what is the most suitable governance model for rural areas are all policy questions requiring serious consideration, but are challenging to both develop and deliver even without the added complication of Brexit.
To ensure Brexit is a positive catalyst for change for public services, the UK has to be ambitious. But to be ambitious, there must be a commitment to understanding the needs of the sector. This, of course, requires resources and time. And Brexit is, as the EU Council President, Donald Tusk, puts it, a ‘furious race’ against the clock. The concern now is that there will not be enough capacity to examine the potential for public services, and reform will be put on the backburner.  

In the next few weeks we will learn more about the ‘road to Brexit’ – it’s imperative we see some clear signposts for public services set out along the way. 

This article first appeared in Public Finance Magazine.

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