Brexit for Infrastructure: Strong Leadership Required

nick Collaborative Planning, Comment, Homepage, Performance Deep Dive, Transformation Leave a Comment

So the people of Britain have pushed the nuclear button on our relationship with Europe.

As the analysts (and financial tipsters) pick their jaws up off the floor, let’s examine the effect on the major infrastructure and construction industries. The chances of a Scottish block or a second referendum for England are extremely low, but there’s a big difference between complete disengagement and an arms-length relationship. There is therefore plenty of uncertainty:

  • Right to play: Our right to bid to participate in projects depends on the nature of our new relationship. If we remain in the EEA and still play nicely with Europe, we can expect little to change. Total disengagement won’t close the door, but it will mean arranging reciprocal tendering and procurement agreements or finding new partners on the ground.
  • “Red Tape”: Brexiteers claim that the deregulation of uncoupling ourselves from Europe will lead to less red tape. Lawyers don’t seem to agree: most say that it will take several years just to create workable individual reciprocal trading agreements, some of which will be with… Europe.
  • State Aid: Without EU regulation (although other global rules still apply), there’s little to stop the government using bonds to guarantee major infrastructure projects. That said, some of this money would just be a replacement for EU funds like the European Fund for Strategic Investment.
  • Environmental Standards: EU environmental standards are not just a key consideration for construction businesses; they are a spur to infrastructure development. The Thames Tideway Tunnel was a response to the UK’s failures on waste water, for example, and London is currently in exceptional breach of environmental regulations on air quality, too. Release from EU environmental standards will disincentivise some of these major projects – although an energy market in flux might suck up this resource.

Whichever way you voted, we have a couple of years of uncertainty ahead – and, as I write, a vacuum at Westminster when we most need clarity and strong leadership.

In deeply unpredictable times, we advocate leaders setting clear objectives with strong communication, even if the ultimate outcome is unclear. Panic and confusion don’t need a specific trigger to grow: they are a guaranteed by-product of uncertainty, and must be managed out of organisations with care and diligence (just look at Westminster today!).

Uncertainty is also, of course, an opportunity – it creates winners and losers. Upheaval allows businesses which are flexible and agile to shine, and to minimise the risk and liability of mistakes – which are inevitable. Good change management

  • Publicly and proudly sets a course
  • Which minimises risk and maximises openness to opportunity
  • Focused on business outcomes
  • Which teams can believe in

 

 

nickBrexit for Infrastructure: Strong Leadership Required

Leave a Reply