Businesses reliant on smooth border will pay price says NAO

“Government has openly accepted the border will be sub-optimal if there is no deal with the EU on 29 March 2019. It is not clear what sub-optimal means in practice, or how long this will last. But what is clear is that businesses and individuals who are reliant on the border running smoothly will pay the price,” said Amyas Morse, the head of the NAO.

Government is heavily dependent on third parties, such as traders, making changes to their systems, behaviours and complying with new processes. Government papers from July 2018 stated that it was already too late to ensure that all traders were properly prepared for ‘no deal’.

Many of the changes needed to be made by government under a ‘no deal’ scenario may not be ready on time. In particular:

• 11 of 12 critical systems needing to be replaced or changed to manage the border were at risk of not being delivered on time and to acceptable quality.
• New infrastructure to track and physically examine goods cannot be built before March 2019. Without this, the UK will not be able to fully enforce compliance regimes at the border on day one.
• Border Force intends to recruit 581 staff by March 2019 and expects to increase its staff in the months following. However, given uncertainty regarding the future regime, and the length of time it takes to recruit, security clear and train staff, Border Force acknowledges that there is a significant risk that it will not deploy all the staff it plans to recruit by 29 March 2019.
• There is an increased delivery risk due to the high interdependence between ‘at risk’ government programmes reliant on another ‘at risk’ programme. For example, seven of the most critical border systems are interdependent with the Customs Declaration Service and/or its legacy system CHIEF (Customs Handling of Import and Export Freight); and all must be ready on day one for the border to operate as planned.

Organised crime

The NAO’s report warns that organised criminals and others are likely to be quick to exploit any perceived weaknesses or gaps in the enforcement regime. This, combined with the UK’s potential loss of access to EU law enforcement and national security tools, could create security weaknesses which the government would need to address urgently.

Pauline Bastidon, head of European Policy, at the Freight Transport Association commented: “Today’s report from the NAO confirms that the fears of the logistics industry over border readiness for Brexit in the event of no deal are justified.  There are still so many elements to prepare if trade is to continue to move freely into and out of the UK, from the Government IT systems required, to contingency measures to mitigate border delays and the availability of government resources to handle new controls and procedures. Despite repeated warnings from FTA since article 50 was triggered, it is concerning to note the NAO has confirmed that it is now too late to implement new border infrastructure and that border processes on day 1 after Brexit will be “less than optimal”. 

“The logistics sector is adept at adapting to change, but needs clarification on a range of elements, from the UK schedule of tariffs in the event of no deal to the arrangements that will be used for the safe passage of trucks. Logistics also needs more visibility on what would happen in terms of border controls beyond day 1 and beyond the ‘reduced compliance’ regime that will initially be in place. Logistics businesses are being left as the “fall guys” for the government’s lack of planning, and with most of FTA’s questions over future trading arrangements still unanswered, it will be difficult for our members to keep doing what they do best, which is adapt to new circumstances and keep Britain trading.”