Autumn Statement vows £400m for key Brexit departments – as union warns of exit "on the cheap"

The Department for Exiting the EU will be given £94m a year from 2017, while the FCO and trade department receive extra funding to build trade policy capability. But the FDA union has warned of EU exit "on the cheap"

By Suzannah Brecknell

23 Nov 2016

The Treasury has revealed funding details for the new Brexit department, as it pledged fresh money that could see a fivefold increase in Whitehall's trade negotiation staff.

The Department for Exiting the European Union will have a budget of £51m in 2016-17, according to today's Autumn Statement, and up to £94m a year from 2017-18.

The Treasury also confirmed that the Foreign Office and Department for International Trade will be given an extra £26m a year by 2019-20 to strengthen trade policy capability. CSW understands that this extra money will lead to a five-fold increase in the number of people working on trade policy across government. 

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In total, this means £412m of extra money will be allocated to the Brexit process and trade negotiations over this parliament. 

Whitehall currently has a shortage of trade policy expertise, since it has not handled trade negotiations directly for 40 years as a result of its EU membership.

Most of the extra funding for trade policy will go to the international trade department, with just £5.2m per year for the FCO. 

The FCO’s chief operating officer Karen Pierce told MPs on the Foreign Affairs Committee this week that the new money would be an “initial outlay to help shape and analyse places overseas with which we might want to develop a trading relationship”.

The extra money for DIT will take its budget to just over £400m a year when combined with resources moved to the new department from UK Trade and Investment and the old business department. 

Budgets for other departments will not change, as the chancellor announced that Spending Review 2015 plans "will remain in place", albeit with some loosening of a smaller £3.5bn efficiency drive announced at George Osborne's final Budget.

FDA general secretary Dave Penman said sticking to the Spending Review plans could create problems since the challenge of preparing for and implementing Brexit would impact all departments, particularly Defra, the Home Office and Department for Business and Industrial Strategy. 

“With no additional funding, departments will once again be asked to deliver ever more with ever less," he said.

"As the Public Accounts Committee highlighted earlier today, the government ‘needs to be flexible and agile to respond to changing priorities, particularly the challenge of Brexit’, adding that ‘the current approach is too often slow to respond and encourages government to simply add to its list of activities without effective prioritisation’.

“The civil service can deliver the best outcome possible from Brexit for the UK, but the government needs to provide it with clear political objectives and the necessary capacity and capability. Today’s Autumn Statement has confirmed that Brexit on the cheap is the government’s favoured approach.”

The Institute for Government think tank meanwhile said it remained to be seen whether the Brexit funding boost would go far enough.

"The additional money announced to support trade and negotiations – directed to DIT, FCO and DExEU – will help Whitehall prepare for Brexit, the IfG's director Bronwen Maddox said. "But it is too soon to say whether this is enough money, because we don’t yet know how the government will approach Brexit negotiations or what resource will be required."

Maddox pointed out that the government still has "a huge number of commitments to deliver on top of Brexit", adding: "Despite emergency funding for prisons, today wesaw little indication of how the chancellor will address the ticking time-bomb in other public services, like health and social care."

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