Scottish Budget 2018

Against the backdrop of uncertainty caused by the UK’s impending exit from the European Union, Finance Secretary Derek Mackay MSP has delivered the 2018 Scottish Budget (December 12th).

Describing it as a “fair and progressive budget” Derek Mackay presented a business-friendly package, while placing the protection of public services at the heart of this Budget Statement.

Below you can find a breakdown of key Scottish Budget 2018 figures in addition to which public sector opportunities await your industry.

SME

A £50 million ‘Town Centre Fund’ will provide much needed support for Scotland’s high streets. There will also be a cap put on business rates below inflation, providing a tax cut for small businesses, which Mackay described as “the most generous system anywhere in the UK”. The partnership between the private sector and the Scottish Government has played an important role in recent years, which was championed by the Cabinet Minister for Business, Fair Work and Skills Jamie Hepburn MSP at Procurex Scotland, in which he encouraged businesses to consider the welfare of local communities and the environment, calling on suppliers to “not be risk averse”.

Housing

An investment of £825 million -as part of an overall fund of £3 billion- will help deliver 50,000 affordable homes over the course of this parliament, which has been the cornerstone of Housing Minister Kevin Stewart’s construction agenda.

Education

Describing education as the Scottish Government’s “defining mission”, the Finance Secretary set out bold new proposals for Scottish schools. £180m will be used to close the attainment gap, including £120m, which will be directed towards headteacher budgets through ‘Pupil Equity Funding’. £600m will also be given to colleges and £1 billion has been secured for Scotland’s world-class universities. £214m has been set aside for apprenticeships and skills; providing a gateway in to employment for many of Scotland’s young people.

Healthcare

An increase of £730m will be provided to NHS Scotland, which is the equivalent to hiring 19,000 nurses, as Derek Mackay confirmed “health is a top priority for the government”, which accounts for almost half of the Scottish Government’s overall spending.

Local Government

The Scottish Government will provide “a real terms increase in the total local government settlement of over £210m” Mackay said, taking the local government budget to £11.1 billion. This will be welcome news for Fife Council executive director Keith Winter, who was a keynote speaker at Procurex Scotland, where he championed “social justice” as he encouraged councillors to adopt a global strategy moving forward.

Brexit: A Buyer Perspective

Brexit Buyer Perspective

The possibilities for post-Brexit public sector procurement are endless: for instance, it could reduce the legislative burden on suppliers or allow UK buyers to favour national goods/services.

While there is real potential for positive change, nothing will be known for sure until Brexit negotiations are completed. However, if you are working within the UK marketplace it is natural to want to prepare for the future.

So instead of listening to the naysayers, why not listen to public sector buyers who have sound knowledge of the subject?

Brexit: A Buyer Perspective hears from UK public sector buyers, revealing their forecasts for post-Brexit procurement reform, as well as opinions on how changes could be capitalised upon.

Written in layman’s terms, A Buyer Perspective shows the survey results from a cross-section of UK procurement officials, with detailed analysis of the results.

The report examines public sector buyer opinion across a range of topics including Brexit’s impact on future procurement activities, thresholds and procedures, along with the possibility of favouring bids from UK suppliers.

Free to download as a PDF, Brexit: A Buyer Perspective can be consumed on the go or easily printed.

report download button

EU Referendum: Business Finance Implications

EU Referendum

Rely on facts not feelings

With just two weeks until the EU Referendum vote have you considered how it will affect the money you make?

Both SMEs and large corporations need business finance to grow and employ new staff, functions that will be impacted should access to this finance change.

Both sides of the EU Referendum debate claim that cash flow will rise – or at least not fall – should voters back them. Theses arguments are analysed in BiP Solutions White Paper EU Referendum: The Ins and Outs for Business. The White Paper examines the referendum and its potential implications for UK exports, trade arrangements, business finance, procurement legislation and jobs – all of which will affect the country’s livelihood.

Here’s a sneak peek at the fourth  chapter of EU Referendum: The Ins and Outs for Business – covering Business Finance.

Pro-Brexit commentators argue that high street banks have traditionally provided the major source of SME finance and that this arrangement would be unaffected by a Brexit, as Centre for European Policy Studies Director, Daniel Gros, reflected in the Guardian newspaper.

He said: “Finance to SMEs – and households – is usually provided by local retail banks. In this sense there is no reason why leaving the EU would have a material impact on the availability of finance for SMEs.

“Part of the UK’s retail banking system is owned by EU banks. This investment would of course have a different legal status after Brexit, but presumably the change in legal status would not have a direct impact on retail operations, such as lending to SMEs.”

They also cite the increasingly intercontinental nature of foreign direct investment in the UK, which they argue would largely be unaffected by a Brexit.

However, pro-Europe campaigners forecast that leaving the EU would cause economic uncertainty and devalue UK sterling. An article in the Independent newspaper highlighted the wider implications a Brexit could have on UK business finance. The article published minutes from the Bank of England’s meeting, which said a vote to leave the EU would “result in an extended period of uncertainty about the economic outlook including the prospects for export growth”.

Teamed with this, they say a Brexit would lead to the removal of all EU subsidies, such as CAP, upon which many UK firms depend.

Northern Irish Agriculture Minister Michelle O’Neill said: “In terms of Agriculture and Rural Development, we will have drawn down over £1.9bn of European funding between 2014 and 2020. I fear that a significant reduction in direct support would see production go into free-fall.”

While acknowledging the challenges a Brexit would bring, Vote Leave campaigners argue that it would also bring opportunity to reform UK banks and rid them of the bad habits they have adopted. In the Institute of Economic Affairs (IEA)’s Brexit thesis competition, the winning report, Britain outside the European Union, suggests this could be achieved by introducing a free banking system, which would rid the UK of “excessive financial regulation, central banks and an inconvertible paper currency”.

To read more about the economic implications of the EU Referendum, download EU Referendum: The Ins and Outs for Business.

WPbutton

EU Referendum: Procurement Legislation Implications

Procurement Legislation

Rely on facts not feelings

On 23 June Britain will choose whether to remain in or leave the European Union. Although this is a decision not to be taken lightly, many companies are still unsure of the facts.

Deloitte’s 35th Quarterly CFO survey concluded that only 26% of CFOs said their companies had taken steps to prepare for the referendum result – a worrying figure considering the direct effect a Remain or Leave vote could have on UK business.

To help professionals understand how the vote will affect UK exports, trade arrangements, business finance, procurement legislation and jobs; procurement specialist BiP Solutions has created an impartial White Paper EU Referendum: The Ins and Outs for Business.

Here’s a sneak peek into the third chapter covering Procurement Legislation.

Procurement legislation simply means the laws that govern the buying and selling of goods; a subject close to the hearts of all professionals.

Remain campaigners claim deviating from the rules of the EU Procurement Directives could cause the UK to effectively exclude itself from the EEA single market and erode or even end London’s status as the financial capital of Europe, with strong negative impacts on the wider economy.

In its 2016 Report, The Economic Consequences of Brexit, the Organisation for Economic Co-operation and Development said: “A UK exit (Brexit) would be a major negative shock to the UK economy. In some respects, Brexit would be akin to a tax on GDP, imposing a persistent and rising cost on the economy that would not be incurred if the UK remained in the EU.”

However, Leave campaigners argue that a Brexit would give the UK a valuable opportunity to disregard some of the more costly aspects of EU procurement legislation and instead adopt a more business-friendly legal regime.

In its 2013 report, Our Global Future: The Business Vision for a Reformed EU, CBI said: “The impact of poorly thought-out and costly EU legislation is a major issue for businesses: 52% of businesses believe that, were the UK to leave the EU, the overall burden of regulation on their business would fall.”

Answering this claim, Remain campaigners in turn contend that many EU Directives are enshrined in UK law, so a Brexit is unlikely to alter the UK’s procurement habits.

Mills & Reeve National Head of Procurement Law, Ruth Smith, and Mills & Reeve Trainee solicitor Tom Benjamin wrote in Procurement Law Today: “Whilst the EU Treaty and EU Procurement Directives would no longer apply in the UK, an ‘out’ decision would have no impact on the validity of the UK legislation put in place to transpose those Directives.”

Even if regulatory reform were to top a post-Brexit government agenda, the Government would be unable to disregard EU Directives, should it wish to remain part of the EEA single market.

Should the UK leave the EU but wish to maintain its single market trade arrangement, it would still have to adhere to EU legislation, but would lose any power to shape this legislation.

Read more about the economic implications of the EU referendum, with EU Referendum: The Ins and Outs for Business.

WPbutton

Referendum Reflection for British Business: Professor Bovis

Bovis

With Britain facing a European referendum on 23 June many questions remain about the implications of Brexit for the UK supply chain. Here BiP Solutions reporter Julie Shennan hears from European Procurement law expert Professor Christopher Bovis on the way the decision could shape British business.

Christopher Bovis JD, MPhil, LLM, FRSA is Professor of Business Law at the Business School of the University of Hull. He is an internationally renowned specialist in European public procurement who, in 2011, was leader of an EU/United Nations procurement training scheme.

Having written extensively on European business in publications including the European Public Private Partnerships Law Review and Encyclopaedia of Competition Law, the professor has given considerable thought to the implications of the EU referendum for business in the UK.

He encouraged others to share his interest, stressing that the referendum would impact the whole supply chain.

Prof Bovis said:

“Businesses of all sizes must prepare themselves for the referendum by educating themselves. Big businesses have done this quite well; however, SMEs are still ill-prepared.

“The Stay Camp [Britain Stronger in Europe] must address the SME business community and make them aware of the implications of a Brexit.”

Brexit [Vote Leave] rhetoric argues that SMEs export less so – to them – the advantages of membership of the EU’s common market are outweighed by its tax and legislative burden.

Professor Bovis explained that he believed this rhetoric to be inaccurate: “In theory, UK businesses could have more autonomy if there were a Brexit. They could release themselves from the bureaucracy of Brussels, plan ahead and decide the countries with which to do business. But in reality it would be completely the opposite.

“Autonomy is only wishful thinking; most of the European rules (on things like business takeovers and acquisitions) are heavily influenced by the UK procurement codes of practice. It is impossible to claim that a Brexit would cut red tape, as the UK helped to create this red tape.”

Procurement bureaucracy, Prof Bovis said, would be further complicated by a Brexit.

He explained: “If there were a Brexit, the biggest challenges UK business would face would be trying to implement an alternative corporate rules system. If you were going to enter the common market, which promotes freedom of goods and freedom of movement, then you would have to implement a system that has similar freedoms of capital and labour, but also in revenue or customs.

“Trade systems need to create a depth of integration between different countries and sectors in order to benefit from economies of scale.”

Any change in legislation and trade agreements would, Prof Bovis said, create economic uncertainty that would shake inward investment.

He added: “There would be a disincentive for countries to inwardly invest in the UK, as the fundamental freedoms of investment and capital would be removed, so companies wouldn’t be sure of the UK tax systems. The service and investment community would be handicapped for many years to come.”

This, Prof Bovis said, would have a knock-on effect on the UK’s critical national infrastructure: “The UK doesn’t publicise it, but it is one of the global leaders in attracting foreign investment to its service markets, such as the utility sector.

“To lose this framework of freedom in provision of services in the UK would create a market segmentation which would be detrimental.”

While internal investment would be complicated, Prof Bovis said the greatest impact of a Brexit would be seen in the exports market.

He explained: “UK companies would lose the opportunity to compete unlimitedly in the areas of the European market and its engagement with World Trade Organisation markets would be complicated by its change in government procurement structure.”

“A Brexit would take a huge chunk out of UK exports in the first year and this downward trend would continue year upon year, because worldwide competition is dynamic and without the benefits of the European common market the UK would be lost.”
One of these benefits, Prof Bovis explained, is EU market subsidies.

He said: “In the case of a Brexit, the agricultural industry would be decimated because it would take the subsidies away from the production and distribution of agricultural products, leaving a huge gap in the funding that brings the products to market.

“If the CAP and the fisheries funding was removed from UK, these industries would be detrimentally affected.”

However, Prof Bovis acknowledged that other industries may – temporarily – benefit from a Brexit.

He said: “I suspect that the service industries would benefit in the short term from a Brexit. This would be because it is an inward looking industry, so it could avoid competition from outside the UK. However, the industry would only benefit temporarily, as exclusion from the EU would hinder its productivity and chances of expansion.”

The limitations of a Brexit are recognised by the ‘Stay Camp’, which has the backing of the President of the European Council, Donald Tusk.

Mr Tusk drafted the report which formed the basis of the negotiation of an alternative EU membership deal for the UK.

Talking of the Tusk Deal, Prof Bovis said it was a good starting point.

He added:

“The Tusk deal would provide some discretion in applying the EU levels of control in procurement. It would also provide a blueprint for a safeguard against monetary union. Monetary union didn’t work 100% for the Eurozone, so this Tusk deal would rule against the UK adopting the Euro or shouldering the burden of European welfare state.”

But he said the deal needed development, explaining: “The Tusk deal fails to answer many of the issues the Brexit camp has around the welfare state and immigration.”

Concluding, Prof Bovis reiterated his call for business leaders to educate themselves before the referendum.

He said:

“It is vital that people vote with their minds and not their hearts; we need to make serious business decisions not emotional decisions. The European Union is an economic integration project; it is for prosperity, not emotions.”

For more information on the EU Referendum, keep following the  BiP Solutions Website.

BiP Solutions Limited is a company registered in Scotland with Company Number SC086146 and VAT number 383030966 and having its registered office at Medius, 60 Pacific Quay, Glasgow, G51 1DZ.

Select a page to copy this section to:

Select where in the level you want it inserted: