Collaboration will be the only way through a 'no deal' Brexit

Does it matter who holds the risk for supplying labour, if you can’t physically get hold of any? And does it matter who holds the risk for materials costs, if the implications of inflation push swathes of the supply chain to insolvency anyway?

Collaboration after brexit

Whilst extreme, these questions could be raised in the context of a ‘no deal’ Brexit, where both the availability and/or cost of labour and materials could bring real deliverability problems to sites.  

Many of the problems that ‘no deal’ could create would be outside of anyone’s control – regardless of what is written and agreed in their contracts.  

Under the worst imaginings of a ‘no deal’ Brexit scenario, construction contracts could become very difficult to deliver on and even frustrated.

If a large number of contractors are practically unable to meet their obligations, then increasingly the protections offered by contract will lose their effectiveness in delivering the outcomes that clients rely on including delivery to time and budget.

I paint an exaggerated and worst-case picture, but it serves to highlight reliance on contractual mechanisms to mitigate the risks of a ‘no deal’ Brexit at best won’t deliver effective management of the risks, and at worst could create a situation that will only hurt construction clients, project teams and suppliers alike.

As the impact of Brexit risks will be difficult to transfer, what can construction clients and their teams do to mitigate them?  The call for a truly collaborative approach isn’t new or unique. We have known for a long time that more collaborative approaches are more effective at managing risks and solving big problems.  

The only way to solve the likely issues that could arise with labour, materials and logistics as a result of ‘no deal’, will be jointly and collaboratively.  

As we move closer to the deadline in March, how can construction clients evaluate this as the risk of a ‘no deal’ Brexit potentially escalates?

Consciousness.  Construction clients can develop clarity on their priorities under a ‘no deal’ Brexit scenario and evolve a deep understanding of the challenges and opportunities that may arise.  The Arcadis five-point plan provides a framework to help construction clients do this.  This activity will provide a foundation of knowledge and insight on which to develop productive collaborative relationships with the supply chain.

  • Self-assessment. Construction clients may seek to understand their own capabilities before outlining expectations of their supply chain. By clearly understanding the strengths and the limits of their own organisation, this can serve to ensure that the abilities of the supply chain are best leveraged by identifying who may be 'best for task'. The Arcadis Brexit-Readiness Self-Diagnostic Tool can help construction clients in this area. This activity will also set the foundation for how all parties can best work together for shared benefit.

  • Agile implementation.  Construction clients may adopt an agile approach.  Given the uncertainty attached to Brexit, a flexible approach to how ‘no deal’ Brexit is managed within the collaborative framework with other parties will be critical.  Creating an environment where all parties are encouraged to contribute new ideas and innovation will help support this.

    Whilst a ‘no deal’ Brexit is far from desirable for the UK construction industry, proactive measures, like those described above, can be taken now to help build resilience and flexibility to support deliverability of projects even in a ‘no deal’ scenario.

    For a long time, there has been a burning platform for greater levels of collaboration in the industry.  In a highly fragmented, low margin and unproductive sector, a potential ‘no deal’ Brexit is just another really good reason to reinforce this and take a different more collaborative approach.

    Will Waller

    Director - Head of Market Intelligence +44 (0)7787 152 097 Ask me a question
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