Brexit ‘has reversed staff cuts since 2010' in some departments
Total cost of government preparation for Brexit likely as high as £2bn in the current and next financial year, according to IfG analysis
Recruitment to the Whitehall departments most affected by Brexit has essentially reversed the staff cuts made since 2010, according to a review by the Institute for Government.
The think tank found that the six departments with most work to do on Brexit – the Department for Exiting the European Union, the Department for International Trade, the Department for Business, Energy and Industrial Strategy, the Department for Environment, Food and Rural Affairs, the Home Office, and HM Revenue and Customs – would have spent around £400m in 2017/18.
This is set to more than double to around £900m in the next financial year as government increases its preparatory work.
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The IfG noted much of the effort in Whitehall so far has been on supporting negotiations and preparing for future policy and legislation, with staff costs accounting for around half the extra spending.
Employee numbers “have increased particularly quickly in the new departments, with DExEU growing from 50 to around 700 and DIT adding 800 new Brexit roles”, according to the analysis. In addition, Defra expects to have filled 1,200 new full-time equivalent EU exit posts, while the Home Office is planning to have hired 1,500 new staff by September 2018, and HMRC is looking to take on between 3,000 and 5,000 by March 2019.
This recruitment has essentially reversed the staff reductions made in those departments since 2010, according to the review.
“In 2018/19 alone, we estimate that the cost of new payroll staff working on Brexit in these six departments will be around £400m,” the IfG wrote. “The final figure could be significantly higher, though: our calculations do not include the cost of recruiting and training new staff, and are based on conservative estimates of expected staff increases between March 2018 and March 2019."
Defra topped the Brexit spending table in 2017-18, which comes after Defra permanent secretary Clare Moriarty sought a ministerial direction from secretary of state Michael Gove in order to provide statutory support for spending on six Brexit-related projects before legislative authority for them was in place. The projects include a new national import control system for animals, a new IT capability to enable registration and regulation of chemical substances placed on the UK market, and systems for the licensing and marketing of veterinary medicines.
Defra was also the department given the most additional funding in the current financial year according to the supplementary estimates produced by the Treasury, followed by the Home Office, HMRC and BEIS.
The acceleration of Brexit spending reflects that little of the implementation work required for Brexit has yet begun, the think tank notes. With the UK’s exit date from the bloc on 29 March 2019 covered in the next financial year, the IfG noted the spending reflects the need for systems and processes to be in place for life outside the EU.
“For the six departments we have looked at, we expect that roughly £900m will be required for work on EU exit in 2018/19,” the review concluded. “While this total is less than the Treasury’s allocation for next year, we have looked at just six departments and have made conservative assumptions where public information is not available. Across the two years we have looked at, the expected cost of Brexit is about £1.3bn for the six key departments. However, once the total impact across all of government is accounted for, the cost could be above £2bn."
In the Autumn Budget last year, chancellor Philip Hammond has set aside £1.5bn for Brexit preparations in both 2018-19 and 2019-20, with the UK set to leave the bloc in March 2019.
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