John Betts has more than 18 years’ experience in local government finance, including eight years as a Section 151 Officer. In this article John talks about the scale of the task facing local authorities as they attempt to plan for Britain’s exit from the EU.  

I have no doubt that many of us are fed up with hearing about the Whitehall machinations around Brexit. It dominates all communication channels, from mainstream TV to social media and the daily written press. In contrast, there has been comparatively little coverage of the potential impact on local government, despite the acknowledgement by the Ministry of Housing, Communities & Local Government (MHCLG) that local government is critical to delivering a successful Brexit.

When the Chartered Institute of Public Finance and Accountancy (CIPFA) pulled together its Brexit Advisory Commission For Public Services and surveyed public sector leaders it found that almost half thought Brexit would have a negative impact on the availability of labour and skills, and a large majority (83%) thought Brexit would be detrimental to public services. While it is, of course, too soon to know whether these predictions will come true, it highlights the range of complexities and issues that councils need to consider in their planning.

The ambiguity around what Brexit will mean for local authorities makes preparation difficult, for example, what will the impact be on regulations? There is a package of Public Procurement Directives that reflect EU procedures for the award of local government contracts to suppliers, subject to certain financial thresholds and exclusions. The expectation is that, under a no deal Brexit, these regulations will remain (initially) unchanged. But it looks unlikely that local authorities will have access to the EU publications office to advertise tenders. If this happens, the Government will need to amend current legislation and get a new UK e-notification service up and running.

So, what plans can local authorities put in place? Given the continued uncertainty and lack of clarity, councils are having to assess the impact on their organisation and local communities by looking at a range of scenarios and then build contingency and business continuity plans based on their findings. Key areas of focus include:

  • Statutory services such as social care, child protection, education, including the supply of medicines and clinical and non-clinical consumables, as well as longer term concerns regarding retention of the workforce and the EU Settlement Scheme
  • Regulatory services, including trading standards – how will the replacement of 136 Directives and 527 regulations in the areas of consumers, environment and health protection ensure ‘business as usual’ and make sure that no ‘black hole’ exists in the UK statute book
  • Border areas – those councils with border boundaries will need to assess the impact of Brexit on local infrastructure and the availability of essential supplies
  • Data handling– that may cover corporate ICT and data housing that the council uses for its own services, plus any data handling for any outsourced services
  • Civil emergencies – preparation with other public sector partners in the event of civil emergencies.

There is no one-size-fits-all solution as local authorities are not all facing the same issues, for example, Kent County Council will be tackling a unique set of challenges regarding the port of Dover and the Channel Tunnel. Also, while the public sector grapple with the task of preparing for Brexit, their suppliers are also looking at how they can protect their businesses and are starting to demand clauses to protect themselves from any additional cost pressures that arise during contract negotiations.

Planning for such a complex and diverse range of outcomes comes at a cost and the financial burden on local government of Brexit preparations is likely to be significant. However, despite this, Public Finance magazine identified that many councils have no specific funds set aside to deal with the potential financial strain.

Support from central government is critical. While it is accepted that local authorities will have a key role to play in mitigating the impact and disruption to the public in the wake of Brexit, little is in place to assist them at present. The report from the Housing, Communities and Local Government Committee calls for more help from central government in the form of a ‘comprehensive range of planning, guidance and support’.

Whatever the outcome of continued Brexit discussions, it is clear local government has challenging times ahead. With councils already creaking under the strain of funding cuts and central government support lacking, there is much work to do to ensure local authorities are able to manage the transition and minimise the impact on local services, businesses and residents.