The report cast doubt on whether authorities had the infrastructure to manage a no-deal scenario © PA Images
The report cast doubt on whether authorities had the infrastructure to manage a no-deal scenario © PA Images

‘Already too late’ to prepare for no-deal Brexit

24 October 2018

Businesses do not have enough time or information to prepare for a no-deal Brexit, the government spending watchdog has said.

In a report on the UK’s readiness at the border, the National Audit Office (NAO) said government papers admitted it was “already too late” to ensure all traders were prepared for a no-deal situation.

The NAO said the government’s technical notices – which the government has been publishing since August to help businesses prepare for a no-deal outcome – may not contain sufficient detail and that an information portal to help traders was not yet in place and did not have a set launch date.

It said it was also unclear if this portal would be available to the public or only to selected parties.

Up to 250,000 traders would need to make customs declarations for the first time on 29 March 2019 if there was no deal, the NAO said.

The report also cast doubt on whether authorities had the infrastructure or manpower to manage leaving the EU without a deal. It said there was a “high delivery risk” attached to government departments’ post-Brexit border programmes due to their “scale, complexity and urgency”.

HM Revenue and Customs (HMRC) would have to process 260m customs declarations a year, nearly a fivefold increase on current volumes of 55m, the NAO said. However, nearly all critical IT systems at the border were at risk of not being ready.

Of 12 systems, 11 may not be fully operational, including systems for recording tariff payments and processing customs declarations.

Manpower may also be an issue, the report said. Border Force needed to increase annual recruitment of operational staff by 8% from the 7,734 it employed in 2017-18, but has seen a 7% reduction in staff numbers over the last three years.

The government has accepted the situation at the border will be “less than optimal” if there is no withdrawal agreement, the report said.

But Amyas Morse, head of the NAO, said it was “not clear what sub-optimal means in practice, or how long this will last”.

“What is clear is that businesses and individuals who are reliant on the border running smoothly will pay the price,” he said.

Meg Hillier, Labour MP and chair of the parliamentary Public Accounts Committee, added it was “particularly concerning” how little information Whitehall had provided.

“The government must urgently work with businesses – time is fast running out,” she said.

In response, a government spokesperson said there were “robust plans” in place to mitigate disruption.

“We will always ensure we have the necessary resources to keep the border secure, and that’s why we’re recruiting approximately 600 Border Force officers to prepare for the day we leave the EU, in addition to the 300 officers which will be deployed by the end of the year,” the spokesperson said.

The NAO report echos research released by the Confederation of British Industry this week that found the majority of businesses with contingency plans would put them into action by December if there was no certainty over Brexit.

A survey by CIPS of procurement and supply professionals last month found one in 10 businesses would risk going bankrupt if there were customs delays of just half an hour.

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