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Last edited 20 Oct 2016

Overcoming the challenges of Brexit


From skills to regulations to investment, the effects of Brexit will be felt at all levels of our industry. In July 2016, Sir John Armitt, President of the Institution of Civil Engineers (ICE), examined how the challenges can be overcome.

You can see the original article here.

The EU referendum outcome has left a cloud of uncertainty over the infrastructure and construction industry. Access to skills, foreign investment, use of codes, standards and regulations, and funding for research – the things which are core to delivering the infrastructure that forms the backbone of the UK economy, are hanging in the balance.

During recent weeks, I have been asked numerous questions around use of pan-European codes, standards and practices. We are a global industry with a global supply chain. It is clear to me that we should not walk away from practices which create a common framework for trade, and help us do business not only across the continent, but all over the world. The UK's record on transparency and fair procurement processes also signifies the strength of the UK market and I see no reason why this would not continue.

The answer to the fundamental question around skills is less clear. The sector already faces a skills shortage. Government predicts that the current infrastructure pipeline creates demand for over 400,000 engineering and construction workers by 2020 – with a need to recruit and train nearly 100,000 additional workers by the end of the decade.

UK infrastructure businesses employ many thousands of EU citizens and rely on the ability to bring in specialist skills. The construction sector also depends on a transitory EU workforce. We have some major projects in the future pipeline, but industry also needs to be confident that it can get hold of the skills needed for the work in the pipeline over the next few years. It needs this assurance now.

The issue of free movement in a Brexit world is extremely complex, politically charged, and requires careful consideration. Politicians and officials leading the exit negotiations must be equipped with the facts – on the likely impact on the sector's skills supply, costs and capability, but also on the key issues surrounding infrastructure investment, and on what the UK will need to maintain its status as world leader in engineering research.

So our industry must look forwards; we must work together to ensure these negotiations are informed. ICE is well placed to bring the sector together and channel its collective expertise through a single voice, and I am pleased to have established a leadership group to drive this forward, including experts from Pinsent Masons, RICS, Skanska, Aecom, KPMG, BSI and the Construction Leadership Council.

The group will gather expert knowledge, data and evidence on what it agrees are the fundamental issues facing the sector, and provide compelling evidence based briefings to negotiators. It will liaise with politicians and civil servants and appoint other industry experts to assist them. The information gathered through this project will be provided to the Brexit unit set up in the Cabinet Office under Oliver Letwin MP. Ultimately, our aim is to help this team negotiate the best possible deal for the country. The Royal Academy of Engineering is undertaking a programme of work in parallel looking across the engineering disciplines, and we will feed into this.

I have always felt that Britain is at its best in a crisis. Our ability to 'pull together' is central to that and in this unprecedented situation it will help us in identifying not only the risks we face, but the opportunities ahead. Our industry is uniting, but now more than ever it – and the country as a whole – needs political unity. We need a move towards cross party consensus on the negotiation outcomes that are in the best interest of UK plc and society.

Political hiatus will only exacerbate the uncertainty and send a negative message to investors. The National Infrastructure Development Plan (NIDP) is clear on its reliance on private investment to deliver much of the UK's future infrastructure, and the new Government must continue to foster belief that the UK is a growing economy and a place which offers a good return on investments. This means it must visibly step up and reassert its commitment to infrastructure. It must progress core projects and programmes, drive the NIDP forwards, and not duck out of taking bold, strategic decisions on issues that are vital to the UK's competitiveness and show we remain open for business. The airport expansion decision is a case in point.

Looking ahead, the UK remains a part of the EU for at least another two years. This makes the work of the National Infrastructure Commission even more important. Its longer term approach to the major investment decisions facing the country, its unbiased analysis and the cross party support behind its aim, will give investors certainty on our future direction.

The independent National Needs Assessment that ICE is leading, which will be provided to the commission to support its own needs analysis, will also come at a pivotal time. It will be published in the autumn and provide a timely contribution to the negotiation positions as they are developing.

ICE has also published a briefing on the importance of infrastructure to a strong UK economy following the EU referendum, Brexit - The case for infrastructure.

This article was originally published by ICE on 13 July 2016. It was written by Sir John Armitt.

--The Institution of Civil Engineers

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