Public Services

Referendum woes

Published 20 June 2016

Brexit promises to unleash economic woes on the public sector, so it should come as no surprise that a majority of the UK tech industry back remain, argues Kable chief analyst Jessica Figueras


With just a few days left to go, the atmosphere surrounding the EU referendum has become febrile - to put it mildly. Many were surprised when the polls turned towards Brexit last week, sparking another decline in the value of the pound. Yet if voter attitudes to migration appear to have hardened, so has the economic consensus on Brexit. A large majority of economists now predict it would have a negative impact on British GDP in both the short and long term.

Osborne's proposals for a post-Brexit emergency budget followed the logic of austerity, by trying to compensate for an assumed £30bn hole in the public finances with more spending cuts and tax rises. But Osborne and probably Cameron would be gone soon after a Leave vote, and such a budget would not pass the Commons. The Leavers, led by Michael Gove, Boris Johnson, Priti Patel and Chris Grayling, would want to avoid blame for Brexit-induced economic hardship. And although Leavers do not appear to have much time for economists now, once in power they might heed warnings that sharp increases in austerity would worsen an economic crisis.

And if the UK voted to Remain? A Cameron government would still be under enormous political pressure from an angry and aggrieved anti-EU contingent. The belt of austerity might need to be loosened in order to shore up citizen support, in the wake of a referendum campaign that has unleashed fear and grievance within some communities. Indeed, Simon Stevens' remarks to the NHS Confederation conference on friday (June 17) potentially point to more funds for health and social care.

What is the public services IT community to make of this? If the UK votes to leave the EU on Thursday, we should expect political chaos for at least a year and probably until the next general election - which could be sooner than 2020. In the meantime, questions over the role of technology in public service reform would sink to the bottom of ministerial priorities, to be replaced with more existential matters.

In the face of grave uncertainty, senior civil servants would favour the status quo (if, indeed, they are able to take any decisions at all). Liberal, technology-savvy ministers like Matt Hancock seem unlikely to remain flavour of the month. More to the point, a Brexit promises to unleash economic woes that would harm citizens, businesses and the public sector itself. No small wonder that a majority of the UK tech industry is supporting Remain.


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