Douglas Smith Prize entry from Matthew Young

How will Brexit affect the UK’s public affairs industry?

Following the UK’s decision to leave the European Union, the general response by the public affairs sector - that the result could only be good news for business - begun to develop alongside the more personal, disparate reactions of elation and despair. The reality is much more nuanced than that, and despite the obvious benefits, the process is fraught with risk.

First, consultancies are likely to feel the effect of clients unwilling to tie themselves to long term retained contracts. Many, rightly or wrongly, see Brexit as a two-year period that, whilst at its most acute now, will normalise over time. This will result in a pivot away from retained client work and towards project based relationships which, whilst often highly lucrative, does not provide the security of regular revenue streams.

The second risk that Brexit presents is more fundamental. Since June, the political climate has been volatile. In such circumstances, the ability of public affairs professionals to demonstrate value is constrained. This challenge has been accentuated by the raft new appointments to key positions in the Government’s Brexit Department, some of which will be unknown to practitioners. This means whilst the focus on public affairs professionals to dispense insightful advice has never been higher, the parameters around which practitioners now have to demonstrate their value has shifted onto more uncertain terrain.

To illustrate this point, two significant events have taken place since I first sat down to write this submission – the Government’s court defeat over its Brexit strategy and, of course, the election of Donald Trump as U.S. President-elect. On the face of it, the first may seem more relevant to a British client base concerned about the timeframe for the country’s exit of the EU, but a Trump presidency, as we have already seen, extends the international uncertainty that Brexit created.

Finally, agencies based in single locations are likely to be at a disadvantage. Prospective clients are increasingly asking agencies to demonstrate on-the-ground resources in Brussels and other EU member states during pitch processes. An obvious effect of Brexit therefore is the undertaking of necessary, but ultimately costly, expansions of networks, in order to stay competitive.

However, whilst these challenges are significant, the rewards that exist for practitioners who are able to navigate the new climate are vast. Businesses with exposure to European markets, who may not have felt compelled to engage with a public affairs agency or build an in house function, are now seeking out PA expertise for the first time, meaning that the volume of work available across the industry could well reach new levels that it has not seen before, as firms seek clarity.

Furthermore, Brexit also presents an opportunity for the sector to permanently extend its influence within business decision making. In the same way that PR firms have spent the last twenty years gradually increasing their influence in the board room, Brexit could be the opportunity public affairs firms need to increase their exposure amongst C-suite decision makers and herald the start of permanent seats for Public Affairs Directors on company boards.

In conclusion, whilst the post Brexit landscape is fraught with more challenges for the sector than some may have initially perceived, the opportunities that now exist could permanently change the sector for the better in the years ahead. Those that are able to capitalise will be those that are flexible, willing to adapt and can show the required capacity to guide businesses away from the current uncertainty in order to minimise the impact on clients’ bottom lines in the years ahead.