Time has run out for Defra to complete ‘no-deal’ Brexit preparations
For the last six months, Brexit Partners have been raising concerns about that amount of time needed to complete preparations for Brexit by Government departments had been under-estimated. The list ended up as 319 EU-related Brexit “work-streams” - and needed the Government to recruit several thousand new employees.
The Department for Environment, Food and Rural Affairs (Defra) is one of the government departments most affected by Brexit - responsible for 55 of those work-streams, covering chemical and agri-food industries, agriculture, fisheries and the environment.
The National Audit Office – the guardian of government on behalf of every UK citizen - published a report today (12 September 2018) assessing Defra’s implementation of its Brexit portfolio – assessing in detail a small number of Defra’s 55 work streams – including: environmental regulations for chemicals; the import and exports of animals and animal products; and control of English fishing waters.
The conclusion is that Defra has made good progress in its preparations for exiting the EU - but it faces an enormous challenge and “it is now not able to deliver everything it originally intended for a ‘no-deal’ exit”.
Defra, however, told the NAO that it still aims to have sufficient arrangements in place if needed.
NAO says that: “Defra has achieved a great deal in difficult circumstances and to a very demanding timescale. For example, [Defra] has: “developed detailed plans for its preparations, secured HM Treasury approval for £320 million spending in 2018-19; started to build new IT systems; recruited over 1,300 new staff by March 2018; strengthened its project management capability; and published consultation documents on agriculture and fisheries”.
“Despite these and other developments, the constantly changing environment has made it challenging for the department to make and stick to a robust plan and meet its project deadlines. The risk of Defra not delivering everything it had originally intended for a no-deal scenario is high and, until recently, not well understood by the department. In the work streams that the NAO examined it found the following examples where Defra would not be ready:
Exports of animals and animal products from the UK are valued at £7.6 billion. For the UK to continue exporting, it must comply with international health requirements and all exports must be accompanied by an export health certificate. Defra needs to negotiate with 154 countries to introduce 1,400 different UK versions of current EU export health certificates. Defra is focusing on reaching agreement with 15 of these countries which it estimates account for 90% of total exports - but will not reach the other 139 by March 2019. It has accepted the risk that UK firms exporting to countries where agreements are not reached may not be able to do so for a period after EU Exit.
Export health certificates will also be required for the first time for exports to the EU if there is no deal which will result in a significant increase in certificates needing to be processed by vets. Without enough vets, consignments of food could be delayed at the border or prevented from leaving the UK. Defra intended to start engaging with the veterinary industry in April 2018, but has not been permitted to do so and now plans to launch an emergency recruitment campaign in October to at least meet minimum levels of vets required. It plans to meet any remaining gaps through the use of non-veterinarians to check records and processes that do not require veterinary judgement.
The fishing industry contributes £682 million to UK gross domestic product. Defra is still developing its plans to strengthen its control and enforcement activities in English fishing waters. Defra hopes to significantly increase vessel patrol hours, but due to delays in procurement and planning is unlikely to reach its originally intended patrolling capacity by March 2019. In a no-deal scenario, Defra may have to scale up its capacity over time - but is confident that it will be able to manage the risk of any disruption in the interim.”
The NAO report notes that some of the challenges sit outside of Defra’s control:
“The UK’s chemical industry is the country’s second largest manufacturing sector with exports to the EU valued at £17 billion in 2017. The UK hopes to seek continued participation in the European Chemicals Agency, but this is dependent on a negotiated settlement. Without this, UK chemical manufacturers would no longer be able to export products to EU member states as registrations of products would cease to be recognised by the EU. To recover market access, they would need to re-register their products on the EU’s system via an affiliate or representative located in an EU member state. This is a lengthy process that cannot be started until the UK has left the EU.
Due to the shortage of parliamentary time available, there is a high risk that Defra will not be able to deliver all of its legislation by March 2019. It has three new bills and 93 Statutory Instruments to convert EU law into UK law and is now having to prioritise.”
Defra has not been able to fully support businesses in their preparations. As a result of government restrictions in order to protect its negotiating position, Defra: “has not been able to hold open consultations with stakeholders on their preparations for a no-deal scenario. It has also, until very recently, been prevented from issuing specific information for the chemical industry or food importers and exporters.”
The NAO recommends that Defra accelerates its planning for the withdrawal agreement while also finalising its contingency plans.
Amyas Morse, Head of the NAO: “The scale and complexity of what needs to be done to leave the EU is a significant challenge and Defra is impacted more than most. It has achieved a great deal - but gaps remain and, with six months to go, it won’t deliver all it originally intended in the event of no deal, and when gaps exist, it needs to focus on alternatives and mitigations.
“Like other departments, it now must ensure its voice is heard by the centre of government to provide an accurate picture of what is possible if a negotiated settlement is not reached, and even if it is.”
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