The government is preparing to spend up to £300m on extra freight capacity to bring medicines and other critical goods into the UK in the four years after a no-deal Brexit.
The Department for Transport is putting in place a framework of ferry, rail and aircraft operators that other government departments can use to transport goods critical to human or animal welfare or national security if the UK leaves the EU without a withdrawal agreement on 31 October.
Government departments, some NHS trusts and the devolved administrations will use the framework to run “call-off mini competitions” for contracts over the four years after a no-deal Brexit. Freight companies will be able to bid for these competitions once they have secured a place on the framework agreement.
DfT said the £300m total – not including VAT – accounted for the possible frequency of what it called “disruption events”, which it said could include congested roads or terminals, delays from border checks, industrial action or natural disasters
The first contracts are expected to be in place before 31 October as part of the government’s no-deal contingency planning, the department said in a contract notice published yesterday.
The contracts will be used to transport the so-called Category 1 goods both between the UK and the European Economic Area and between Britain and Northern Ireland.
The £300m framework is designed to add capacity above and beyond the £25m worth of contracts the Department of Health and Social Care is in the process of putting in place to ensure the supply of medicines into the UK is not disrupted in the event of a no-deal Brexit.
The health department opened bids earlier this month for contracts to transport medical goods “where there is an urgent need or where a supplier’s own logistics arrangements are disrupted”. The department only expects to pay £3.9m of the total £25.08m value of the contracts, with the rest being paid by suppliers.
Announcing its plans earlier this month, DHSC had said it expected the "express freight services" to be fully operational by 1 September, but pushed back the deadline to 24 October in the published the tender document – just a week before the UK is set to leave the EU.
If the full £300m budget is used, the contracts will add up to more than three times the value of the controversial deals DfT struck with ferry operators in preparation for the initial Brexit deadline of 29 April.
The department was heavily criticised for its handling of the three contracts, together worth more than £100m, which it awarded to Seaborne Freight, Brittany Ferries and DFDS last year without carrying out an open tender process.
The Seaborne Freight contract was scrapped two months after being awarded after it became apparent that the company could not deliver what it had promised.
Parliament’s Public Accounts Committee said this month that DfT’s department’s “rushed and risky” procurement exercise had cost the taxpayer £85m with little discernible benefit. This included £51.4m it paid to the ferry operators Brittany Ferries and DFDS to cut short the contracts, which did not allow for an extension of the Brexit deadline.
The government also paid £33m to Eurotunnel after the rail company took legal action over not being invited to bid for the contracts. P&O Ferries is now suing the government for a similar sum, saying the Eurotunnel payout put its business at a "competitive disadvantage".