The PAC said the DfT's procurement process for the ferry contracts had been "rushed and risky" © In Pictures/Getty Images
The PAC said the DfT's procurement process for the ferry contracts had been "rushed and risky" © In Pictures/Getty Images

‘Time has run out’ for procuring no-deal freight capacity

12 March 2019

Time has run out for the Department for Transport (DfT) to procure additional freight capacity in the event of a no-deal Brexit, according to MPs.

report published by the Public Accounts Committee (PAC) said the DfT’s procurement approach has been “rushed and risky”, adding that preparations have been conducted in secrecy and failed to receive adequate stakeholder engagement.

Despite knowing that ferry companies required up to four months to establish new service routes, the DfT only took action to procure additional services in September 2018, six months before the UK is due to leave the EU on 29 March, the report said.

It noted that the department carried out “an emergency accelerated procedure” which allowed it to bypass the government’s usual procurement processes. The DfT's “first procurement attempt received no bids and of the three bids it received in the second attempt, two did not comply with its requirements”, said the report. “Nonetheless, it took all three bids forward to contract.”

The contracts were met with criticism, and resulted in a £33m settlement with Eurotunnel after the firm took legal action over the “secretive” procurement process.

The report criticised a lack of clarity about the settlement in terms of the timescale for the delivery of benefits and how they will be measured.

When examining the DfT’s controversial contract with Seaborne Freight, which was terminated in February, MPs said the DfT had entered into the high-risk contract without any written assurance of a shipping partner, receiving a letter from Arklow Shipping, the firm’s backers, six days after signing the contract.

The committee said that the three ferry contracts awarded were equivalent to 11% of normal flows of freight across the Channel crossing, but since the termination of Seaborne’s contract, this has dropped to just 7%, despite the DfT’s initial target of 25% additional capacity.

Meg Hillier (Labour), chair of the PAC, said: “It is critical that the approach to decision-taking adopted in response to what are unprecedented challenges does not embed itself as the ‘new normal’.

“Taxpayers’ money must not be risked by business-as-usual done on the fly. Nor should transparency be sacrificed at the whim of government,” she continued.

The report also criticised the Department for Environment, Food and Rural Affairs (DEFRA) for its “over-optimism” towards the continued supply of food in the event of a no-deal scenario.

The committee said it was concerned that DEFRA had admitted there could be a lack of availability and choice of certain foods and that “geographically vulnerable communities” will be harder hit by interruptions in the food supply in the event of no deal.

The Cabinet Office also released a Procurement Policy Note outlining the procurement processes to be adopted by public bodies from the 29 March, which reiterates advice issued in January.

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