Will Brexit Empower Local Councils and Small Business Growth?

Whenever the practicalities of Brexit are discussed, people tend to do one of two things. They either assume a partisan position that makes them incapable of entering into a balanced discussion, or they focus solely on the negative aspects of Brexit and its potential to destabilise the national economy.

The close nature of the EU referendum vote underlines the fact that there are potential benefits to re-establishing the UK's sovereignty, particularly from the perspective of small businesses and local authorities.

In this article, we will discuss these benefits more closely and ask whether or not Brexit can empower regional small businesses throughout the UK.

Will Brexit Make it Easier for Small Businesses to Operate

At the heart of the EU and its directives is a desire to drive compliance and transparency, particularly in the public sector. This can often come at a price, however, with some suggesting that the rules surrounding local government spending in the UK are prohibitive and responsible for hindering economic regional growth.

This is certainly the view of Daniel Kawczynski, who currently serves as the local MP for Shrewsbury and Atcham. He is backing calls for the Local Government Association (LGA) to relax the regulation on how council buy in goods and invest in services as part of a post-Brexit landscape. In fact, he suggested that the UK should see this as a golden opportunity for local governments to re-evaluate their spending priorities in the future, as they focus on the creation of regional jobs and business growth.

At the heart of this would be a relaxation of the guidelines surrounding competition, with authorities in Shropshire and the surrounding area currently having to follow strict, EU-wide regulations relating to advertising and the awarding of tenders. This can hinder investments and make it extremely difficult to buy goods or services, with the process of tendering likely to take between three and 18 months to complete (more than twice as long as in the private sector). This makes it exceptionally hard for small businesses to grow, while it can also cause the local economy to stagnate over time.

By relaxing competition rules and affording local authorities great autonomy to make decisions and organise their spending plans, SMEs will also a reduction in the prohibitive administration costs that are often exacerbated by sustained delays. Shrewsbury MP Kawczynski has also highlighted the fact that the current guidelines are largely ineffective, as while they allow for tenders to be made  by businesses in other EU states this is a rare occurrence when dealing with local infrastructure spending and projects.

The Last Word

While there will still be a need for regulatory compliance for councils post-Brexit, the government can set more relaxed and relevant guidelines that help to boost growth in local economies. This will have a significant bearing on job creation too, helping local authorities to optimise their spending as they require.

So while Brexit is often discussed in terms of partisan politics and its potential impact on the types of financial market referenced here, it also has a key bearing on the finer details of local government in the UK. When you also consider that local government contracts are worth up to £55 billion to the UK economy, it is clear that relaxed regulations will boost SMEs nationwide.

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Pete White Pete White

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