Shortly before Christmas, the Prime Minister’s EU Withdrawal Agreement Bill easily cleared its first parliamentary hurdle, and all indications are that the UK will be leaving the EU on 31 January 2020. What a difference an election makes. But, while the House of Commons vote may have provided some short-term clarity on the Brexit process, for those of us working in public finance, the waters are still murky. Questions about the impact of Brexit on UK public services are becoming more frequent for us at CIPFA. Here are a few points that articulate our current thinking on the interplay between Brexit and public services.
According to National Institute of Economic and Social Research predictions, all regions of the UK will be poorer under the Prime Minister’s withdrawal deal, compared to continued EU membership. Even under an optimistic 2021 Free Trade Agreement scenario, in the long run the UK economy is expected to be more than 3% smaller than it would be were we remaining part of the bloc. Impacts of our EU exit are projected to vary geographically, based on regional industry mixes and current supply chains. In other words, we may have very different experiences after Brexit day based on where we live. We expect some individuals, communities and public services to be hit disproportionately harder than others.
An area of primary concern continues to be the lack of an Economic Impact Assessment on the Prime Minister’s Brexit deal. Immigration, international supply chains, public-private contracts, government revenue and demand for public services will all undoubtedly change because of Brexit, and without an assessment of the likely economic impacts, we are essentially flying blind. The government has also failed to provide real clarity around future funding to help local authorities prepare for both the short and long term effects. The prime minister may be busy signalling that he wants to ‘get Brexit done’, but this could be at the cost of efficient and effective public service delivery. CIPFA will continue to stress that public service providers should try to prepare for and anticipate the social, political and economic changes that are likely to follow Brexit, in order to provide uninterrupted services for citizens. But more certainty from central government would be helpful.
This article first appeared in The MJ.