Joanna Killian, head of local government at KPMG in the UK, commented on the impact of the UK’s exit from the European Union on local government:
“As the UK wakes up to a future outside the European Union, those in local government are bracing for a sustained period of uncertainty while the terms of Britain’s exit are agreed. The biggest immediate threat comes from a potential downturn in the financial markets, which would put further pressure on already hard-pressed local authority finances, as well as impacting local government pension scheme deficits.
“Prior to the referendum, the Leave campaign argued that Brexit would in due course bring benefits in the form of freedom from restrictive EU regulation and interference. Consequently, some in local government may be looking forward to relief from compliance with EU procurement rules, which are often cited as the reason for hold-ups in delivery of vital contracts. However, much of the sentiment in the sector is far from upbeat.
“There are strong concerns that restrictions on labour movement will have a detrimental impact on the delivery of vital social care services. Whether home care, domiciliary, residential, nursing or personal care, in many places across the UK there is a huge reliance on EU workers as the principal workforce. The market is fragile already and changes to immigration and foreign worker policy could be the breaking point. Of course, such changes will take time to work through and won’t impact immediately, but the medium to long term picture will be a real worry to councils.
“And workforce availability is also likely to impact on local government’s major infrastructure and growth programmes. We know that already there is a skills shortage in the construction industry, even with the number of EU tradespeople currently working in the UK – should labour movement rules change and they are no longer able to work here, there’s likely to be a significant impact on project delivery. Again, this won’t happen immediately but even if change happens in two years, there simply won’t be enough time to upskill the rest of the workforce to bridge the gap. Local government will not only be fearing for their development strategies and financial plans, but also for the potential impact on their communities.”
Notes to editors:
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