BEIS facing ‘significant capacity challenges’ NAO warns

Written by Jim Dunton on 6 July 2018 in News
News

Watchdog’s review of post-Brexit regulation, consumer protection and competition flags major issues

The Department for Business, Energy and Industrial Strategy Credit: PA

The Department for Business, Energy and Industrial Strategy is facing significant legislative and staffing challenges to deal with its regulation, consumer-protection, and competition-policing remits, a report from the National Audit Office has warned.

According to the public spending watchdog, BEIS and its non-ministerial department the Competition and Markets Authority and the National Trading Standards body have identified and are prioritising critical aspects of work for the post-Brexit world.

But the report questioned the extent to which they would be ready in the event of a no-deal Brexit in March 2019 was unclear.


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The NAO said that while BEIS had developed a legislative framework for the repatriation of consumer protection law, timescales had been subject to slippages and the area was currently risk-rated “amber”, meaning the department still believed it was deliverable by the end of March next year.

In terms of on-the-ground consumer protection, the NAO pointed to two information systems BEIS had commissioned to replace European Commission models it would not have access to in the future.

In March the department sought a written ministerial direction to spend £2.4m on a replacement for the Rapid Alert System for Dangerous Non-food Products and Information and Communication System on Market Surveillance, both of which share product-safety information.

The NAO said BEIS had selected a preferred supplier for the new systems and believed a “minimum operating capability” was possible by March 2019 and that it could be developed further later.

In terms of the Competition and Markets Authority, the NAO said that the department had identified a requirement to increase its headcount by 286 – more than 40% – to deal with new responsibilities that would come from the UK’s post-Brexit inability to rely on EU regulators and new state-aid responsibilities.

The watchdog said that while the CMA had additional budget of £23.6m to meet its new responsibilities, it was recruiting in a “competitive environment for staff” where the private secor often paid higher salaries and that the body may be forced to reprioritise aspects of its work if it could not recruit the numbers of skills required.

In terms of BEIS’s National Trading Standards body, which oversees and coordinates the work of local-authority based services, the NAO said the organisation had conducted high-level assessments of the potential impact of Brexit but “considers the uncertainties too high to provide a specific overall cost for future scenarios”.

The report concluded by reflecting that “the scale of the implementation challenge is significant and timescales are tight in all three areas examined” – referring to regulation, consumer protection and competition.

“In particular, the time available for ensuring that legal frameworks are ready has already been eroded by slippages in the passage of the Withdrawal Bill, and the recentness of policy decisions on state aid,” it said.

“Furthermore, there are challenges to build capacity and capability in the event of a no-deal scenario. Government must therefore prioritise those actions and resources that are most critical to ensuring that UK businesses and consumers can continue to trade confidently and smoothly following EU exit. “

NAO head Sir Amyas Morse added that BEIS the CMA and National Trading Standards had at least recognised which areas needed to be ready on day one, but would need cross-government suppor to ensure that UK consumers and businesses could continue to trade smoothly.

“There will be many areas that departments and authorities across Whitehall simply cannot be prepared for, so the government needs to seriously help departments scramble and prioritise their efforts around what matters most to us come 30 March 2019,” he said.

A government spokesman responded to the report by saying that the UK had some of the strongest and most comprehensive consumer protection rules in the world and that the situation would not change post-Brexit.

"Now that the EU (Withdrawal) Act has become law we are getting on with the job of preparing our statute book for exit,” he said.

"We have already started bringing forward secondary legislation and are confident in delivering our objective of a functioning statute book by exit day whatever the outcome of the negotiations."

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