MPs warn of ‘substantial risk’ to agri-food industry from Brexit

4 May 2018

There could be a “substantial risk” to the agri-food and chemical industries if government IT systems are not in place in time for Brexit, a group of MPs has warned.

The Public Accounts Committee has published a report questioning the ability of the Department for Environment, Food and Rural Affairs (Defra) to manage it’s Brexit workload and get new IT systems in place in time.

It said the department was managing 64 Brexit projects, up from 43 in March, of which at least 20 have an IT component. These include a new import control system for the trade in animals and animal products and a new system for registering chemicals. This is on top of the department’s regular workload and an efficiency savings target of £138m for the next financial year.

If Defra was forced to fall back on manual systems, this could impede or slow down imports and exports crossing the border, the PAC said.

A government spokesperson said “real progress” has been made on delivering plans for Brexit.

Defra is one of the departments most affected by Brexit as much of its remit is currently subject to EU legislation.

The PAC report said: “With only a year to go until the UK leaves the EU, and in light of Defra’s poor track record in implementing new IT systems in the past, we have concerns over the potential for disruption to the agri-food and chemical industries if these IT systems are not ready in time.”

The report contains the findings of a PAC investigation into the readiness of Defra and the Department for International Trade (DIT) for Brexit.

It said both departments were being “hampered by the pervasive uncertainty” over the future trading relationship and faced an “unprecedented challenge” in preparing for Brexit. It added that both departments were still preparing for several possible trading relationships, including a no-deal outcome, which was “time consuming and costly”.

The Treasury was also criticised over how long it took to allocate funding to departments to make Brexit preparations.

In the spring statement, the Treasury allocated £310m to Defra and £71m to DIT for this purpose.

Neither Defra, DIT nor the Treasury have responded to a request for comment.

Meg Hiller, PAC chair, said that all departments had “much to do”.

“Our committee has repeatedly raised concerns about government’s preparedness for life outside the EU. The clock is ticking and there is still no clarity about what Brexit will mean in practice,” she said.

“Government departments must deliver fit-for-purpose systems and ways of working, in tandem with managing what in some cases is already a complex and ambitious programme of work. As our new report again makes clear, departments are under extreme pressure.”

A government spokesperson said: “The government has set a clear plan for Brexit and has made real progress delivering on this.

“We have already agreed the terms of an implementation period that will provide businesses with the continuity they need to prepare and thrive after we leave the EU.

“Work is being undertaken across the whole of government, in a range of exit scenarios in preparation for our withdrawal from the EU. Close collaboration between departments is vital as we negotiate our exit, and Whitehall is rising to the challenge.”

Separately, a survey of more than 100 companies by procurement consultants Odesma found 30% of buyers are either making no change as a result of Brexit or did not know what changes their businesses were planning.

Other statistics, shared by Nick Ford, co-founder of Odesma, at the Procurious Big Ideas Summit in London, included:

  • 45% of respondents were actively seeking more UK suppliers
  • 27% were only doing contingency planning
  • 9% were looking to renegotiate contracts
  • 12% of respondents said currency fluctuations were the most important risk, 42% said it was the second

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