We are seeing more enquiries from the public and the private sector north of the border, so perhaps we have reason to be optimistic
Brexit has struck and we seem to be assuming we face an even more uncertain future in Scotland than our colleagues south of the border, but is that really the case? Does Brexit actually present the Scottish government with another opportunity to get off the hook for the recent inertia we have been seeing in Scottish public sector spend? An inertia caused, ironically, by the European System of National and Regional Accounts, “ESA10”.
We need to be careful we do not get wrapped up in another referendum debate at the expense of trying to move the Scottish economy forward.
There is a difference however. We no longer have a majority Scottish National Party government since the Holyrood election on 5 May left the SNP two seats short. There is hopefully going to be more accountability. It is clear that the Scottish government needs to move forward with new plans, especially on how it procures its major public buildings if NPD (non profit distributing or Scottish PFI/ PPP) remains blocked by ESA 10.
Since early spring, we have seen more enquiries from the Hub companies - the five territory partnerships between public and private sector organisations that are the delivery vehicles for the Scottish Futures Trust, and other public sector bodies ranging from affordable home providers, councils and universities. We are seeing some of the major NPD projects migrating their way to, the now ESA 10 resolved, Hub companies. When the Hub is not used we are seeing other frameworks come to the fore such as Scape. Public bodies are starting to trust that there has been competition to achieve these single source frameworks. There is definitely a more realistic analysis of the time and effort of going through the OJEU process or using an existing framework.
Even more ironically, since Thursday 23 June, we in Scotland, have had more private sector opportunities come calling or reawakening than in the whole of the rest of the first half of the year. These enquiries range across various elements of the private sector from residential to offices or hotels. One barometer of Scotland’s economy is that hotel occupancies seem to be rising again in Aberdeen, according to one client although he bemoans that rates have still to follow.
So there is an optimistic mood looking ahead. The votes are cast and at least everyone now knows the result even if we still do not know what Brexit actually looks like. What is clear is the market seems to have decided to move forward because demand is going to outstrip supply in sectors such as offices and residential.
Richard Blair is a board member at AHR, and works between Glasgow, Manchester and London