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Brexit – the reality

How will your sector be affected?

 

It's done. The UK voted to leave the EU and that brings major uncertainty for businesses, governments and regulators around the world. All of the sectors we work in are facing major challenges. The outcome is raising issues from employee retention and motivation, to geographic relocation and market strategy. Major themes are emerging around people and skills, regulation and innovation. In the face of uncertainty research tells us that scenario planning is key – to work out what might happen in different circumstances and prepare for all likely eventualities. Have you got your response plan in place?

Find out what our experts in your sector think – we’ll update this page as the situation develops.

"Companies will have to deal with volatility in markets, exchange rates, supply and demand, and private and public investors’ reluctance to commit to R&D and infrastructure projects. So crisis management and communication teams will help sustain business as usual.

The EU market accounts for 45 per cent of UK goods exports. So UK manufacturers should lead the debate to influence new domestic policies and regulations. Free movement of goods, talent and information should be core pillars of the UK’s new relationship. Organisations will have to assess scenarios as soon as the potential impact is clearer.

But businesses need to carry on innovating by making the most of digital possibilities – that minimises the importance of physical borders. We can help you stay competitive in the global market and navigate this uncertain period by establishing a resilient and more agile organisation.”

Tim Lawrence, PA manufacturing expert

Further insight

Find out more about our consumer and manufacturing experience >

“In the short term, Brexit represents a change in circumstances, not direction or intent for UK defence and security strategy. Despite increasing uncertainty across the political and economic spectrum, the more immediate defence and security implications are expected to be limited. It’s challenging to accurately predict the impact further ahead. The outcome could jeopardise the ambition of the 2015 Strategic Defence and Security Review (SDSR) – and the funding that underpins it as that assumes a stable and growing economy and links national security and stability directly to economic prosperity. But we think the Government can add a ‘New Chapter’ to the SDSR to address concerns about Brexit – as they did in 2003 to incorporate new thinking after 9/11.

We’re talking with clients to offer support, and we’re ready to face the challenges together – with the ultimate aim of making the UK a safer and more prosperous place.”

Nick Newman, PA defence expert

Further insight

Find out more about our defence and security experience >

"UK energy policy has been aligned to the EU for the past 20 years; where those policies are not enshrined in UK law there is the potential to adjust the position to suit new policy aims and objectives. Energy utilities and investors will need to re-evaluate their strategy using a scenario-based approach to reduce the exposure to policy uncertainty. This will allow them to prioritise their resources on the most important activities, which may now be different as a result of Brexit.

We also expect an even larger drive for financial efficiency and cost reductions, driven by a potential drop in demand from economic slowdown and increased pressure from foreign investors to maintain their return on investment.

We can help you explore the different scenarios using our ‘Future Worlds’ approach, determine investment opportunities and risks, and evaluate your current strategy, priorities and operating model."

Liz Parminter, PA energy and utilities expert

Further insight

Find out more about our energy and utilities experience >

“Trading conditions for UK financial services in the short term are likely to be negative. Initial falls in sterling and volatility in equities markets (particularly financial stocks) have added capital and liquidity pressure. So institutions need short term contingency plans for communications, hedging strategies and decisions on cost allocation and investments.

We think financial institutions should focus on establishing a central Brexit team to act as a focal point for decision making – including crisis communications, customer and market communication and short-term decisions to stop or pause major investment activities. Further ahead, they'll need to develop and refine plans for different scenarios. That means looking at the best location for their activities, the impact of changes to the regulatory rulebook, data storage and protection issues, and reviewing documentation and contracts. We can support you through this and help you make the changes work.”

David Troman, PA financial services expert

Further insight

Find out more about our financial services experience >

“A central civil service unit has been set up to lay the groundwork for the exit, but the implications for the civil service will go far beyond central Whitehall and affect every UK government department. Alongside the negotiation, there'll be the mammoth task of unpicking the policy, regulatory and legislative links to Europe and creating a new framework. That has to happen alongside the continuing work to transform public services, and the pressures on the civil service will be immense and will require increased capacity in specialist delivery and policy skills.

To support this the Government needs to be developing a workforce strategy for how it will meet these challenges in the coming months and years.”

Andrew Hooke, PA government expert

Further insight

Find out more about our government and public sector experience >

“The NHS is already struggling to get enough people with the right skill sets in to the right roles. Brexit now presents further workforce challenges that need to be addressed urgently. NHS leaders must reassure EU staff that nothing will change in the foreseeable future. Then they need to develop plans for the porters, cleaners and other junior staff who play a key role in the health service and might be affected by post Brexit immigration restrictions. Many of these jobs are outsourced, meaning that the NHS must engage now with its suppliers to build resilience plans for these workers. Finally they need to be ready to manage any changes to the European Working Time Regulation (EWTR) and seize any opportunities to plan rosters more sensibly.

All these Brexit pressures make it more essential than ever that the NHS focuses on long overdue workforce changes such as the skill mix, investment in learning and improvement and greater use of technology. These present a real opportunity both to manage Brexit risks and drive improvements in the effectiveness of the NHS workforce.” 

Catharine Berwick, PA healthcare expert

Further insight

Find out more about our healthcare experience >

"A number of areas will be affected. How existing EU funding is replaced will impact the UK’s research capability. Clinical development could become more complicated and regulatory complexity may challenge medicine launch times. Exchange rates, new tax and compliance rules may impact pricing, storage and transport of clinical and commercial drugs and devices. And the UK’s status as a gateway to Europe may be challenged.

The sector has begun to lobby the government. As well as guaranteeing future EU funding projects, an expected lobbying objective is for close affiliation with existing EU processes for clinical trial regulations and market authorisation applications for new medicines.

We expect some contract research, clinical packaging and supply chain organisations to consider repositioning a proportion of their UK resources within the future EU boundary ahead of schedule. A further complication could be the renewed impetus of mergers and acquisitions as the weaker British pound makes UK companies more attractive. The final impact will depend on the political and commercial separation or fragmentation, as well as the survival of trading arrangements and the wider economy. Having helped pharmaceutical companies prepare for a potential Greek exit, we think organisations should focus on cross-sector collaborative lobbying and detailed scenario planning to identify challenges and opportunities."

Fons Kuijpers, PA life sciences expert

Further insight

Find out more about our life sciences experience >

“Organisations in the transport sector typically have to make long-term infrastructure investment decisions – in aircraft, airports, railways, roads and people – based on the projected volume of international travel and trade. The unexpected Brexit decision is challenging these projections, both those in the UK and wider Europe. It is forcing the transport sector to reappraise current and future investments in the light of almost certain changes to medium and longer term travel and trade patterns.

We have a long history of helping transport clients develop the right investment and people strategies in the face of changing demand, new regulatory environments and skills availability. Our experience of scenario modelling and people development will allow organisations to effectively develop the necessary strategies to cope with a range of potential variables and uncertainty that Brexit will bring.”

Chris Lynch, PA transport, travel and logistics expert

Find out more about our transport, travel and logistics experience >

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