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UK Sep 2016 Project Management Round Up

REPORT

Brexit Update; Infrastructure Projects; Government Major Projects Portfolio; Major Projects in the News

By Miles Shepherd

Executive Advisor & International Correspondent

Salisbury, England, UK


INTRODUCTION

As I note below, UK is emerging from its annual Silly Season, when little of significance is reported. However, that does not mean that nothing is happening. Rather like the famous Windmill Theatre in London’s West End, the project world never closes. So despite the impact of the summer, a Bank Holiday and Brexit, the project world continues. In this report, I will return to BREXIT as it overshadows much future project activity but will spend more time on the British Government’s infrastructure project report.

BREXIT UPDATE

Almost two months have passed since the voting population of the United Kingdom of Great Britain and Ireland (UK) voted, by a small margin, to leave the European Union. Despite various alarmist newspaper reports, the sky has still not fallen in, nor have there been marches in the streets or civil unrest. You could be forgiven for thinking that not much has changed but then this is the end of the Silly Season, when most reputable journalists take off for their summer holidays and professional politicians (an oxymoron, I know, but they do get paid for what they almost never do) escape to whatever rock they have crawled out from under. Normally this is the time when the Great British Press focus on almost anything they can twist into a headline but this year, there has been little sign of such traditional activity. Instead, what we have seen is a more adult view of Britain post BREXIT and a general concern about just what the vote will eventually bring. The impact on the project world is not obvious yet and we seem to be carrying on much as usual.

The financial numbers are, at first sight, holding up quite well. The FTSE 100 is riding reasonably high despite the fact that almost all its members report in US$ and so the weakness of the £, which is about 20% lower than pre-Brexit. So long as they bill in US$ and do not change the rate they charge out, this means there will be little impact. However, if they calculate rates in £ then they will take a hit. It is probably too soon to see the impact of higher raw material costs but that will kick in next month.

For UK firms in the FTSE, who almost exclusively bill in £, incomes will drop soon but how soon depends on how long their creditors take to pay their bills.

At the political level, there has not been much impact although keen observers of the international business scene will have noted with dismay the probable loss of the new patents watchdog. It was widely expected that the Unified Patents Court would open next year with main offices in London, Paris and Munich. However, Brussels has warned that the launch is likely to be delayed or even cancelled as it relies on UK approval. The life sciences and pharmaceutical division, which was to be based in London is now likely to be merged with one of the other offices. Clearly it all depends on Brexit decisions by the UK Government.

The upside of Brexit is the low value of Sterling. This has encouraged many overseas visitors and they have spent a great deal of money in shops in London and the main tourist centres.

pmwj50-Sep2016-Shepherd-CHOPPERThe downside of Brexit, so far, is the low value of Sterling! Newspapers are reporting the increased cost of major military equipment programmes such as the purchase of 50 Apache AH-64E attack helicopters. The drop in the value of Sterling increased the original cost of £1.53 bn to £1.77 bn. To add insult to industry, the aircraft will be built in USA rather than at the Finmeccanica plant in Somerset which will only get some of the support and training contracts. (photo courtesy of Boeing Aircraft)

On a totally different front, cheap Sterling has allowed one of the most important science and technology firms ARM Holdings to be sold to Soft Bank of Japan for £24 bn. While some, including the British Government, see this as a sign that UK is still open for business, others view it with dismay. According to the Financial Times, the new Government plans “to review future foreign deals under the umbrella of an industrial strategy. Some would like these to be subjected to a wider “public interest” test”. There is a fair bit of interest in various infrastructure projects too.

More…

To read entire report, click here

 


About the Author

pmwj36-Jul2015-Shepherd-PHOTO
MILES SHEPHERD

Salisbury, UK

 

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Miles Shepherd
is an executive editorial advisor and international correspondent for PM World in the United Kingdom. He is also managing director for MS Projects Ltd, a consulting company supporting various UK and overseas Government agencies, nuclear industry organisations and other businesses. Miles has over 30 years’ experience on a variety of projects in UK, Eastern Europe and Russia. His PM experience includes defence, major IT projects, decommissioning of nuclear reactors, nuclear security, rail and business projects for the UK Government and EU.   Past Chair and Fellow of the Association for Project Management (APM), Miles is also past president and chair of the International Project Management Association (IPMA). He is currently Director of PMI’s Global Accreditation Centre and the Chair of the ISO committee developing new international standards for Project Management and for Program/Portfolio Management. He was involved in setting up APM’s team developing guidelines for project management oversight and governance. Miles is based in Salisbury, England and can be contacted at [email protected].

To view other works by Miles Shepherd, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/miles-shepherd/.