More than half of Scottish businesses reliant on European Union funding do not have a no-deal Brexit contingency plan, new research indicates, as the UK’s departure date looms amid a political stalemate and ongoing delays.
A report by law firm Anderson Strathern found that just 45 per cent of Scots firms that receive funds from the EU have a full strategy in place for the event of a no-deal Brexit.
A further 44 per cent are currently planning for a no-deal scenario, while 11 per cent have no contingency plan whatsoever.
The Scottish legal firm also found marked differences between businesses in Glasgow and Edinburgh in levels of preparedness for the outcome of the Brexit process.
In a poll of more than 250 organisations, including around 100 firms with turnover of £25 million or higher, respondents from Edinburgh appeared to be ahead of the game compared to their Glaswegian counterparts, with 60 per cent of capital respondents and 44 per cent of Glasgow firms having completed their Brexit risk assessments.
This is despite Scotland’s largest city displaying a heavier reliance on EU workers – with 59 per cent of firms reporting that Brexit would affect their workforce, compared to 44 per cent in Edinburgh – and half of Glasgow companies forecasting that revenue will decrease in the next 12 months as a result of Brexit.
Half of all businesses surveyed rated the EU as their third most important market, behind Scotland (86 per cent) and the rest of the UK (57 per cent).
Scotland’s small and medium-sized enterprises (SMEs) have a more pessimistic view of the impact of Brexit, with 57 per cent considering it a “negative” compared to only 41 per cent of senior managers at larger corporates.
The most urgent concerns on the back of Brexit related to the EU workforce (54 per cent), pricing and finance (49 per cent), regulatory and compliance concerns (42 per cent), and supply chain disruption (41 per cent).
Bruce Farquhar, chair at Anderson Strathern, said: “Whilst the research shows that domestic business continues to be the main driver for the Scottish economy, it is clear that the EU market and its workforce will remain a key part of business through Brexit and beyond.
“Our survey has produced clear evidence that Scottish organisations need time, help and advice in preparing for the path ahead.”
Neil Amner, Anderson Strathern director and Brexit group lead, said: “The survey indicates that many Scottish businesses are still in the process of going through a risk assessment, while a worrying number haven’t even started doing so.
“It is clear that larger businesses have the resources to be more prepared, but smaller businesses still need a bit of help in taking a closer look at what could be in store and prepare accordingly.”