Departments now testing no-deal Brexit systems but out of time to fix problems, reveals NAO

Written by Beckie Smith on 16 October 2019 in News
News

Spending watchdog warns there are significant Brexit risks 'beyond government's control'

Photo: Danny Howard/CC BY 2.0

Despite years of preparation, there are remaining risks to the smooth running of the border in a no-deal Brexit little that the government can do little to mitigate, the National Audit Office has said.

Government departments have made significant progress on minimising the security risks and likelihood of disruption in the event that the UK leaves the EU without a deal, the watchdog has concluded in the latest of its series of reports on border preparedness.

However, it also warned that while systems to mitigate disruption were now in place and departments had progressed to the point of testing them, they would not have time to resolve problems uncovered in the testing.


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The report, published today, said departments had “strengthened their preparations to be ready for a potential no‑deal exit” since 12 April, the previous deadline for leaving the EU. “But there is still work to do and little time to resolve any issues which may emerge,” it said.

For example, the Department for Environment, Food and Rural Affairs, which by 12 April had been unable to user-test its IT system to monitor and control animal imports, IPAFFS, was “now confident that it will operate and provide a reliable day‑one solution”, the NAO found.

Meanwhile, the Border Delivery Group – the committee in charge of overseeing work to ensure the border is ready for Brexit – has been working on operational testing of its systems since August, having not had time to do this in the period leading up to 12 April.

However, the NAO warned that there will be “limited time to resolve issues which have arisen” in testing.

“There is still some work to do to finalise arrangements in the short time that remains and bringing all these elements together for the first time in a live environment carries inherent risk,” it added.

Meanwhile, the most significant risks to the operation of the border are those that the government cannot control: business readiness, EU member states imposing study border and custpms controls, and arrangements for border on the island of Ireland.

“Although the government has actions under way to influence these, mitigating these risks is now, to some extent, out of its control,” the report said.

The government has estimated that between 30% and 60% of hauliers exporting goods to the EU will have the right documents to do so. Based on this estimate, in a reasonable worst-case scenario, the flow of goods across the short Channel crossings could fall to 45-65% immediately after Brexit and take 12 months to recover to normal levels.

The report also confirmed that a “large proportion” of businesses will not be ready for new customs and regulatory controls if the UK leaves the EU without a deal.

The government has made repeated efforts to convince businesses to prepare for the possibility of a no-deal outcome, but has had mixed success as some traders have been reluctant to invest in preparing for a scenario that may not happen.

The auditor said that the businesses, hauliers and port representatives it spoke to for its review “highlighted the significant costs to businesses of preparing for a no-deal scenario and the difficulties faced (particularly by small to medium-sized enterprises) of meeting those costs”.

HMRC has written to businesses setting out the steps they must take and registered thousands of companies that trade with the EU for new customs procedures.

However, the NAO noted that HMRC has no way of registering or contacting many smaller companies that trade with the EU, because they are not registered for VAT.

The watchdog also warned that the Get Ready for Brexit communications drive launched last month may have limited impact “at this late stage and with ongoing uncertainty about the prospect of no deal on 31 October”.

 Ultimately, the report said, it is impossible to know exactly what would happen at the border if the UK leaves the EU without a deal on 31 October.

“Departments face new challenges in monitoring and responding to any disruption that may ensue. This includes supporting businesses and individuals in meeting their new obligations, mitigating risks of the border becoming vulnerable to fraud, smuggling or other criminal activity, and activating civil contingency plans if necessary,” it said.

Commenting on the report, Public Accounts Committee chair Meg Hillier said it "sheds a light on the lack of preparedness for a no deal Brexit".

“It confirms that many traders and businesses will not be ready for new customs and regulatory controls and that organised criminals and others could exploit gaps. Issues around the land border between Ireland and Northern Ireland remain unresolved.

“Mitigating the risks could be outside of government’s control; I hope all my fellow parliamentarians read this report carefully.”

A government spokesperson said: “We are doing all that is necessary to ensure that, if we do leave without a deal, the transition will be as smooth as possible for people and businesses – which the NAO recognises. This includes simplifying import processes, upgrading IT systems, securing additional freight capacity and putting traffic management plans in place around our busiest ports.

“As the NAO says, many of the challenges that we may face if the UK leaves the EU without a deal require businesses and citizens to take action. That’s why we are running the largest communications campaign in recent UK history and providing targeted advice to help them get ready for Brexit on 31 October.”

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Beckie Smith
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Beckie Smith is a reporter for CSW who tweets @Beckie__Smith.

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