NAO predicts ‘widespread disruption’ despite departments’ Brexit work

Watchdog says Covid-19 has hampered preparations for end of transition period and ‘significant risks’ remain
Gareth Fuller/PA

By Jim Dunton

06 Nov 2020

Departments’ preparations to get border systems, infrastructure and resources ready for the end of the Brexit transition period next month will not be enough to prevent “widespread disruption” from 1 January, the National Audit Office has warned.

The public spending watchdog’s latest report said the coronavirus pandemic had added to the complications of laying the ground for new customs systems and checks for goods travelling between the UK and mainland Europe, and that thousands of trucks could be left queuing in Kent.

It said while departments had been able to build on their experiences for previous Brexit-related no-deal deadlines, officials had never previously prepared for implementing the Northern Ireland Protocol or an import control regime. The NAO added that it was still unknown whether there would be a free-trade agreement in place with the EU on 1 January, which could alter the scale and nature of some border requirements but would not remove them.

It said £1.41bn had already been spent on new infrastructure, systems and support in 2020 alone. However, while departments were reasonably confident “minimum operating capability” could be provided at Britain’s borders on the day the transition period ends, timetables were tight. Delays down to Covid-19 have left “little time” for ports and other third parties to integrate their systems and processes with new or changed government systems, the NAO warned.

The watchdog said that whatever additional progress departments were able to make in the coming weeks, traders would be unprepared for new EU border controls that will require additional administration and checks. It pointed to the government’s latest reasonable worst-case planning assumptions, which said 40% to 70% per cent of hauliers will not be ready for the new controls and up to 7,000 lorries may need to queue at Dover and Folkestone.

The NAO report said the government would also need to implement the Northern Ireland Protocol from 1 January, but because of the scale and complexity of the changes, the lack of time and the impact of ongoing negotiations, there was a “very high risk” it may not happen in time. The protocol sets out the basis for Northern Ireland to be part of the UK’s customs territory but to also apply EU customs rules and follow EU single market rules.

The NAO acknowledged the £200m trader support service announced last month to reduce the burden on businesses moving goods to Northern Ireland and help them prepare. But the NAO said the government had left itself little time to mobilise the service, which is being delivered by a consortium led by Fujitsu, and that there was “ongoing uncertainty” about the requirements for the movement of goods under the protocol.

NAO head Gareth Davies said it was vital that the government used the remaining weeks of the transition period to focus its efforts on resolving the many outstanding issues relating to the border and develop robust contingency plans in case they could not be addressed in time.

“The 1 January deadline is unlike any previous EU exit deadline – significant changes at the border will take place and government must be ready,” he said.

“Disruption is likely and government will need to respond quickly to minimise the impact, a situation made all the more challenging by the Covid-19 pandemic.”

The NAO recognised that the government was preparing civil contingency plans – such as new Department for Transport contracts to provide additional freight capacity for over 3,000 lorries a week on routes avoiding the short Channel crossings. The move would safeguard surface imports of critical goods and medicines in the event of disruption to supply chains. 

But it said that Covid-19 was impacting contingency planning as well as core preparations as local authorities, industry and supply chains were already under additional strain.

A government spokesperson said departments were moving at pace to make sure everything was ready for the changes currently expected on 1 January.

“We are making significant preparations to prepare for the guaranteed changes at the end of the transition period – including investing £705m to ensure the right border infrastructure, staffing and technology is in place, providing £84m in grants to boost the customs intermediaries sector, and implementing border controls in stages so traders have sufficient time to prepare,” they said.

“With less than two months to go, it’s vital that businesses and citizens prepare too. That’s why we’re intensifying our engagement with businesses and running a major public information campaign so they know exactly what they need to do to grasp the new opportunities available as the transition period ends.”

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