Parliament’s public spending watchdog has cautioned that two of the Whitehall departments most affected by Brexit are facing an “impossible challenge” as they plan for different contingencies for leaving the European Union.
MPs on the Public Accounts Committee expressed empathy for the predicament of the Department for the Environment, Food and Rural Affairs and the Department for International Trade over the ongoing lack of clarity on the UK’s future relationship with the EU. But they questioned how realistic both were being about their practical preparedness for Brexit in terms of finance, skills, and IT capability.
With fewer than 11 months to go until the UK’s formal departure from the EU, there are now 325 active workstreams preparing for Brexit across Whitehall – up from 313 identified by the National Audit Office in November last year, figures just released by the PAC reveal.
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Sixty-four of them sit with Defra – up from 43 when the PAC took evidence for its investigation in March, DIT has nine. The Department for Business, Energy and Industrial Strategy has 72, but it was not the the main focus of the PAC’s inquiry.
MPs said a significant worry with Defra was its ability to plan for the multiple Brexit scenarios that are still on the table at the same time as a delivering £138m in targeted savings during the current financial year alongside an “extensive portfolio” of non-Brexit work.
They urged the department to “acknowledge that it cannot continue to do everything it is currently doing” and set out a process for de-prioritising activities that can be stopped, postponed or “descoped” by the end of next month.
MPs also expressed concern that Defra was envisaging “manual workarounds” if bespoke IT systems that would be required for areas such as trade in animals and registering new chemical products under a no-deal scenario were not ready in time for Brexit. “Given its poor track record on IT delivery, Defra must ensure it has the necessary resources in place to complete its IT programmes on time and avoid costly and embarrassing contingencies involving manual completion and submission of forms,” they said.
In relation to the DIT, MPs said they were “not convinced” the department had so far acquired the right mix of skills and experience in its workforce to deliver effective trade deals. They said that despite proclaiming that it “had world-class staff with talent, strategic capability and the ability to learn” the department had also “acknowledged that ideally it would like to be able to recruit more staff with negotiation experience”.
Elsewhere, MPs flagged the extent to which Defra and DIT’s work impacted devolved areas of policy. They pointed to Defra’s own estimate that 80% of its functions were in devolved areas of policy, where a failure to reach timely agreements with the devolved administrations could “have a far-reaching impact” on the department’s EU-exit programme.
They said “DIT does not yet have an adequate understanding of the regional and sectoral impacts of Brexit on inward investment and jobs, and industry’s ability to trade smoothly” and had no offices in the devolved administrations.
PAC chair Meg Hillier said committee members had repeatedly raised concerns about the government’s preparedness for life outside the European Union, but that there was still no clarity about what Brexit would mean in practice.
“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,” she said.
“Departments are under extreme pressure. If parliament is to hold them to account then it is vital that government is as transparent as possible on the progress being made.”
Hillier said that the Brexit workstream update provided to her committee by Department for Exiting the European Union perm sec Philip Rycroft this week was a “comprehensive picture” of the breadth of the challenge to be tackled, but added that the government could provide greater detail.
“We need to examine the substance of these work plans and I am not convinced that more information from across government cannot be provided now,” she said.
PAC deputy chair Sir Geoffrey Clifton-Brown said that parliament needed to be given the opportunity to “see how well prepared the government is in its infrastructure and resources to successfully carry out this process”.
In addition to raising concerns about the Brexit-preparedness of Defra and DIT, the Public Accounts Committee said it was “very concerned” that HM Treasury had left it until “less than a month” before the start of the financial year to inform departments of the level of funding approved for their 2018-19 EU exit programmes.
A joint response to the PAC report, issued by DIT and Defra, said the trade department had “met every EU exit delivery milestone to date” and recently launched the International Trade Profession, while the environment department viewed the use of manual systems alongside existing IT systems “as a last resort”.
"The government has set a clear plan for Brexit and has made real progress delivering on this,” a government spokesman said.
“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 from the EU and develop our future trade policy with the world, and Whitehall is rising to the challenge.”