Tim Focas writes for FTSE Global Markets

In a new column for FTSE Global Markets, Tim Focas argues that Whitehall’s pencil pushers could be costly during the Brexit negotiations:

Should Whitehall turn to financial deal makers to win the renegotiation war?

Monday, 03 April 2017

“Every battle is won, won before it has ever been fought” said the one time Chinese general and military strategist Sun Tzu. With Article 50 finally triggered, the government engine room doesn’t even appear to have the firepower to fight this renegotiation battle, let alone a coherent plan for victory. According to a report by the National Audit Office, third of the 1,000 new roles for Brexit and international trade remain vacant. Tim Focas, director of financial services at Parliament Street looks at the implications.

Surely the government needs to fill these positions sooner rather than later? The civil service is, after all, at its smallest size since World War II due to a prolonged period of spending cuts. Even so, this is not so much a question of numbers, it should be about ensuring the best possible talent is selected. Whether we like to admit it or not, the EU have some pretty canny operators and have already made it clear there will be a heavy price tag for leaving. In contrast, government civil servants are chronically lacking the deal making dynamism needed to underpin these highly complex renegotiations.

It is scary to think that the same people who have already been assessing the various Brexit scenarios, are the ones tasked with seeking external commercial expertise. The irony is that civil servants wouldn’t know what makes a top negotiator, because it is the very antithesis of what they do. By definition, the skills of a civil servant are the not in deal making, but in carrying out orders from MPs, and to provide information and advice to enable ministers to push through their ideas, and ultimately, execute their decisions. From shielding themselves from independent thinking to avoid taking personal responsibility for decisions, the civil service has embraced a culture of never-ending processes and procedures for too long now.

The problem is that this anti-commercial culture, which has manifested itself across both Labour and Conservative led governments, runs completely counter to what is required in the upcoming talks. In an M&A deal for example, a savvy operator is someone who takes the lead and analytically assesses all the possible risks prior to arriving at the negotiation table. It is someone that relishes conflict, and is not scared of making the tough decisions and crucially, sticks by their guns when the heat gets turned up.

Time, of course, is not on the government’s side. A seismic leap in commercial expertise is needed if we are to stand the best possible chance of securing a positive outcome, particularly on trade. However, with Whitehall entrenched in bureaucracy for so long, whether a cultural and structural change of this magnitude can happen quickly enough is questionable. If the government is to plug the negotiation skills gaps over the coming weeks, they need to find some battle hardened financial markets deal maker that truly understands that “victorious warriors win first then go to war” as opposed to “going to war and then seeking a win.”

The original article can be read here.

Tim Focas is Director of Financial Services and the City of London for Parliament Street. He is responsible for providing research and market commentary on the key issues bridging the City and Westminster.

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