Dover Council Report highlights lack of Government preparations for Brexit.

London

In the week that the European Commission urged every EU Government Body, Business and Citizen to assess the impact of Brexit and make preparations for a ‘no-deal’ scenario on 30 March 2019, the results of a report commissioned by Dover District Council have been made public.

Dover is the front line for the mass movement of goods and people between the EU and UK – with 10,000 vehicles per day passing through the port.  And as the Local Authority covering both the Port of Dover and the Channel Tunnel, Dover District Council is the designated ‘Port Health Authority’ with statutory responsibilities.

 The is a comprehensive document of 48 pages and sets out an objective impact assessment against the known facts together with entirely reasonable assumptions for the for many Brexit unknowns.  We have reproduced the Summary and Key Messages in full, below as an illustration of the Brexit Impact Assessment and Mitigation Plan that every organisation should now be undertaking.

In the 2016 referendum, the citizens of Dover voted decisively to leave the EU:  62% leave against 38% remain (the overall national vote was 52% leave against 48% remain).

However, the council has taken its responsibilities very seriously.  We have included an extract from the report at the foot of this article.

The Dover document is especially important because the council is the Port Health Authority responsible for food safety checks required post-Brexit at the Port of Dover and the Channel Tunnel.

The report questions whether it is "fully understood" by central government:

  • that the Port Health Authority will not have powers "to physically stop vehicles";
  • that officials "in the large are blind as to what is entering the port";
  • the layout of the port means there is "nothing to stop vehicles leaving" Dover;
  • there are "inadequate facilities to inspect and store food" and "no facilities to park vehicles waiting for examination".

Such checks have not occurred since 1992 under the EU free movement of goods - and there is a shortage of staff, including vets, to provide them. 

Local MP Charlie Elphicke dismissed any fears of disruption to the flow of goods in an interview with the BBC today (31 July 2018) stating that it needed a limited amount of investment to ensure that an electronic solution would be in place.

The government anticipates in Chequers plan for Brexit that agreement on measures, including a common rulebook for goods and agri-food, will avoid the need to instigate new border checks.

However, checks will be difficult to avoid in a no-deal scenario, and the EU has vowed to enforce them - even if the UK government were to waive almost all such checks on goods coming in to the UK.  And the Dover report expresses some uncertainty about even in which country such checks will be required – UK or France and adds that: "We cannot begin to surmise... the substantial workforce required to provide a service.”

The government was due to report in detail on its contingencies for a no-deal Brexit about now.  This has been delayed after some public concern over the prospect of Brexit stockpiling.  Reports from NHS and industry are widespread.  Foreign Secretary, Jeremy Hunt, will visit Paris and Vienna on Tuesday (7 August) to warn that: "it is time for the EU to engage with our proposals, or we potentially face the prospect of a no-deal by accident, which would be very challenging for both the UK and EU".

Brexit Partners Opinion

We share the sentiment if not the optimism of reaching a deal.  Implementing the mass of new and detailed procedures will be a challenge of historic proportions by December 2020 – and all but impossible by March 2019 in the event of a 'no-deal'.


Dover District Council Report: Chapter 2:

Summary and Key Messages

2.1 Dover is the Gateway to Europe and the UK's exit from the European Union will have a significant impact on us, our district and our communities, creating opportunities to do things differently as well as challenges that need to be addressed. As the pathway to the district is through Kent, the impact will also be felt across the county and further afield.

2.2 Withdrawal from the EU involves a complex set of negotiations. Although the Government hopes to deliver a smooth and orderly Brexit, the outcome of the Article 50 process is difficult to predict.

2.3 It is crucial that we grasp any potential opportunities offered by Brexit to ensure that it is a success for the area and mitigate the negative impacts. Brexit, and the repatriation of powers from the EU, provides a once in a generation opportunity to shape local government for the future, devolving responsibilities and resources to local democracies. Any policies and strategies need to work for all our communities and address the concerns that led to the vote for Brexit.

Transport and Infrastructure

2.4 With over 10,000 freight vehicles passing through the Port of Dover on peak days, and with HGV volumes expected to grow by +43% by 2030 the implications of changes to border and customs arrangements are substantial.  Capacity problems within the Port of Dover, and the knock-on effects on transport flows within the district, and wider transport network, are a major concern. We therefore need urgent clarity on post Brexit arrangements, adequate support to keep trade flowing and transport networks moving and need to consider contingency plans for the possibility of a hard / high-friction Brexit.

2.5 Operation Brock, the interim plan to avoid cross-channel congestion needs to be delivered before any change to customs arrangements in March 2019, but a start date for necessary road works has not yet been announced and there does not appear to be a Plan B. A permanent solution will not be in place for many years, if enacted through current planning processes and procedures.  It is also important that any solution implemented does not impede the practical and physical operations of businesses operating in the Dover district, for example, businesses being forced to travel to Maidstone to join the end of the queue to come back to Dover Port.

2.6 A key consideration for the Dover district is upholding the UK’s collaborative border relationship with France under the Treaty of Canterbury, Le Touquet Agreement and the Sangatte Protocol.

2.7 The impact of more queuing traffic on Dover’s roads, particularly within the Air Quality Management Area, as a result of any potential new customs arrangements at the Port of Dover, is of major concern and will likely impact on Dover District Council’s Air Quality  Action Plan for Nitrogen Dioxide.

2.8 In addition, Dover District Council is the Port Health Authority for both the Port of Dover and the Channel Tunnel, with associated statutory responsibilities.  Current port health controls, stipulated by statute, are small-scale. This is partly due to the import checks and examinations that are currently carried out on our behalf at the point of entry into and then across the EU.  Depending upon the outcome of the Brexit negotiations, these may need to be completed in full at the ports. It is vital that there is adequate legislation, facilities, resourcing and authorised competent staff to provide the necessary checks for food safety in the Dover Port Health district.

Local Economy and Workforce

2.9 In general terms, the major risks for the local economy are a shortage of available skills and labour, rising costs and the shrinking of the export market. This could have a negative impact on inward investment.

2.10 Research by the Centre for European Studies at Canterbury Christchurch University has found that at a local level, connections with the European economy and the single market may be seen in three respects:

A large number of firms in the region either export products to EU member- states, import from them, or are involved in facilitating these transactions.

The land-based industries in the Kent and Medway region depend upon EU subsidies of approximately £54 million per year.

A significant proportion of workers in the region are citizens of other EU member-states, with many of them from the accession states in Central and Eastern Europe.

2.11 At this point in time there is no data collated / available to give the number of EU employees in the Dover district.

2.12 The most accurate source of data on the UK population is the Census, published by the Office for National Statistics (ONS). The most recent Census results showed that, in March 2011, 3,383 people (3%) living in the Dover district, were born in other EU countries.

2.13 The most recent estimates of the EU migrant population of the Dover district are available from the Labour Force Survey, published by the ONS.  According to these figures, between July 2016 and June 2017, there were around 2,000 (rounded to the nearest 1,000) people born in other EU countries living in the district. Figures for the population aged 16-64 years in the district are not available due to disclosure control.

2.14 The number of new National Insurance Number (NINo) allocations to adult overseas nationals is also used as a measure for the number of new migrant workers in an area.  However, this data has limitations and it is not possible to determine how many migrant workers there are in an area at any one time.

2.15 A map of NINo allocations shows that, in 2016/17, no district in Kent was in the top 20% of English local authorities with the highest NINo allocations. However, neighbouring Medway was in the top 20% with 2,762 NINos in 2016/17 and had the eighth highest number in the region.

2.16 Of the 13,926 NINOs allocated in Kent in the year following the referendum, the Shepway and Dover districts had among the lowest allocations in the region with 477 and 495 NINos respectively.

2.17 In the Dover district, workers from the EU Accession States accounted for more than two thirds (68.1%) of all new NINo allocations. In Kent, all districts had a higher proportion of new migrant workers from the EU Accession States than the England average of 47.0% with the exception of Shepway (45.1%).

2.18 The top country of origin in the Dover district was Romania (114), followed by Bulgaria (61) and Poland (55).

2.19 Official data on the type of industries that EU nationals are working in in the Dover district is not available. However, the industries that may see the greatest impact, if overseas worker migration was restricted, include wholesale and retail trade, agriculture and construction. 2.20 The Migration Advisory Committee, an advisory non-departmental public body, sponsored by the Home Office is considering the impacts of Brexit on the UK labour market and will be making recommendations on how to better align the visa system to the needs of employers. The committee’s findings are expected to be published by September 2018.

2.21 The Dover district is predominately-rural (79.3%). For the rural economy, a major concern of Brexit is the loss of EU subsidies. The government has promised an Agriculture Bill to replace the Common Agriculture Policy (CAP), which has guided EU funding and policy up until now.

2.22 Farming is worth £5.4bn to Kent’s economy with an estimated 20,000 seasonal agricultural workers employed in the county. Uncertainty about changes to immigration is already reported to be having an impact on seasonal workers’ intentions to return for work in Kent farms.

2.23 There is limited data available at a district level to help us assess the likely impact of Brexit on local businesses. We therefore recommend that we either:

Carry out a survey of businesses in the Dover district on the challenges and opportunities of Brexit or

Include a small number of Brexit questions in the forthcoming Local Business Survey being undertaken as part of the Local Plan.

2.24 This will be a useful way of gaining insight into the:

  • Level of trade that exists between the EU and employers in the district
  • Concerns regarding access to skills
  • Local reliance on EU funding
  • Support needed to prepare for changes to the regulatory and legal framework (for example, changes to customs, exports and public protection standards)
  • New market opportunities.

2.25 We could also consider inviting Professor Hadfield, from the Centre for European Studies and Christ Church University in Canterbury, to give a presentation to the Dover Brexit Taskforce.

Tourism

2.26 It is estimated that the tourism industry provides 5,562 jobs in the district, which equates to 15.9% of total employment.  Between 2013 and 2015, the value of the visitor economy in the Dover District increased by 6.6%, compared to 4.8% across Kent.

2.27 The Kent and Medway region attracts a significant number of visitors from overseas each year. A greater proportion of visitors arrive from EU member-states (77%) than the national average (67%) owing to our proximity to the European continent and its usefulness as a waystation for travellers heading to London and beyond.

2.28 There are several risks identifiable to the tourism sector of a British exit from the EU, which may adversely affect the number of visitors to the region from EU member states.

2.29 The most important concerns the effects of the re-imposition of customs controls that may accompany a British withdrawal. Visitors from Europe may be less inclined to holiday in the UK if there is an increase in the time, costs and restrictions on entering the country, especially if they are able to travel within neighbouring countries easier.

2.30 Post-Brexit the free flow of goods and visitors in vital. The visitor economy lost over £1m per day during Operation Stack in 2016 (not including the reputational damage caused).

2.31 There will also be direct effects on Dover residents: If customs restrictions are re-imposed and cross-border travel made slower, the marginal benefits of short breaks to the continent will decrease.

2.32 The tourism industry relies heavily on European and migrant labour, and concerns regarding labour availability and attracting homegrown talent, with the necessary skills, have been raised.

2.33 In January 2018, a Digital, Culture, Media and Sport Committee report on the potential impact of Brexit on the creative industries, tourism and the digital single market found that the UK has received significant European funding, for example through the Creative Europe programme. Although non-EU countries can still participate in this particular programme, they must accept free movement of people, which the UK government has rejected.

2.34 The Committee recommended the government carry out a full mapping exercise of direct and indirect funding streams that support these sectors and clarify which funds will be replaced and the criteria that will apply.

Funding

2.35 The LGA estimates that a potential funding gap of €10.5 billion (c. £8.4 billion) for local government will open immediately from the point the UK officially exist the EU, unless a viable domestic successor to EU structural funding is implemented.

2.36 The South East LEP (Local Enterprise Partnership) has an indicative allocation of £160 million of Structural Funds from the EU, awarded by the Government for the 2014 – 2020 EU funding period. This is made up of £74.2m ERDF (European Regional Development Fund); £71.6m ESF (European Social Fund); and £14.5m EAFRD (European Agricultural Fund for Rural Development).

2.37 Kent County Council has a strong record of accomplishment of securing access to EU funding, which the Dover district benefits from. A report to its Growth, Economic Development and Communities Cabinet Committee in July 2016, on the Impact of the EU Referendum on European Funding indicated that KCC has secured a total of £52.62m for the 2014-2020 programming period, including £42.3m for the Port of Dover and £5.3m for the LEADER programme in West Kent, East Kent and Mid Kent.

2.38 Since 2014, over £200m of EU grants and loans have come into Kent-based organisations.

2.39 Brexit creates an opportunity for a streamlined model to replace EU funding and support growth based on local need.

2.40 The Government has confirmed that all signed structural fund projects are guaranteed funding up to the point when the UK departs the EU – even when these projects continue after we have left. Projects will have to demonstrate good value for money and be in line with domestic strategic priorities.

2.41 The Government has also committed to creating a UK Shared Prosperity Fund (UKSPF) to replace EU economic aid.  There are no further details available regarding the criteria for this, how much will be allocated to it, the relationship it may have with the Local Growth Fund, whether the EU principle of match funding will apply, or what outcomes the Government expects from this.  In January 2018, the Government pledged to consult widely on the design of the UKSPF, and has asked LEPs to lead on regional responses; the consultation is expected later this year.

2.42 In November 2017, the Government published the Industrial Strategy White Paper reiterating that it will ensure that local areas continue to receive flexible funding for their local needs. Local industrial strategies (LIS) are central to this focus.

2.43 The South East Local Enterprise Partnership (LEP) will lead the LIS in our area. LEP’s currently develop Strategic Economic Plans (SEPs) to define local economic strategy and access the Government’s Local Growth Fund. LISs have a wider remit and place focus and will involve more institutions. Areas will need to build on their SEPs to develop their respective LISs, which will need to be agreed in partnership with the Government.

2.44 The South East LEP is currently renewing its Strategic Economic Plan and has consulting a range of public and private stakeholders. The aim is to publish the SEP early 2018.

2.45 The 2015 Growth and Infrastructure Framework for Kent and Medway is also currently being refreshed. This will provide a picture of housing and infrastructure requirements based on forecasts of population for Kent and Medway and for each district in the county. These population forecasts and consequential housing needs will be projected to 2031; the refreshed GIF will also suggest different growth scenarios for up to 2050.

2.46 In November 2017, Kent County Council set out its plan to develop an Enterprise and Productivity Strategy to improve Kent’ overall standard of living over the next 30-years. KCC is expected to consult on the strategy in autumn 2018.

EU Legislation

2.47 The White Paper Legislating for the UK’s withdrawal from the EU states that Brexit is an opportunity to ensure returning ‘power sits closer to the people of the UK than ever before’. It includes a commitment to continue to champion devolution to local government.

2.48 The LGA has scoped out the relevant legislation for local government that could affect councils and it is recommended that we form an internal working-group to assess the local impact of these on district council services.

 
John ShuttleworthComment