The costs of the government’s post-Brexit trade border strategy will reach nearly £5bn after plans were hit by delays and IT glitches, the National Audit Office has found.
The government forecasts it will spend more than £4.7bn on implementing post-EU exit border arrangements and improving trade performance, the watchdog’s report this week showed.
The government planned to create “the world’s most effective border” by 2025 after the UK left the EU. But repeated changes to the original strategy and various delays to the introduction of full import controls on goods coming in from the bloc have “caused uncertainty for businesses and extra costs for government and ports”, the NAO said.
Of the total forecast, £2.6bn had already been spent by March 2023.
This includes using public funds to build infrastructure as part of a revamp of the UK’s borders that “were ultimately not needed” – such as a £62m customs post at Dover that was later not required, and a total of £258m spent on building eight temporary border control posts to cope with the originally predicted influx of border checks, also never needed as ministers ended up significantly scaling down controls.
Additionally, the core technology behind the proposed ‘Single Trade Window’ – a software platform where all trade paperwork is meant to be processed so as to phase out paperwork and streamline processes – is facing “several major delays”, according to the NAO.
A £150m contract awarded to Deloitte and IBM in May last year to deliver the first phase of the £349m single trade window was “several months” behind schedule, the NAO found.
“In our view, the [STW] programme’s objectives and timescales are overly optimistic and continue to underestimate the complexity of what is required,” it said.
The research comes amid reports that severe IT glitches since the rollout of import controls on EU food and plants on 30 April have caused lengthy hold-ups and racked up costs for hauliers and importers bringing goods into the UK.
Several claim to have had their loads stuck at entry points for over 24 hours. And in many cases, officials were having to manually process paperwork and wave trucks in without thorough checks in order to prevent further delays, industry claimed.
Other Brexit border costs included £531m spent between 2020 and 2024 on a scheme to help British traders deal with Northern Ireland. The NI trade strategy too has not yet been fully rolled out after a series of political u-turns affected the original plans.
The NAO’s report also noted that there was “no cross-government integrated delivery plan”, with all the involved departments including Defra, Business & Trade and HMRC failing to effectively come together to deliver the strategy by next year.
The “2025 UK Border Strategy lacks a clear timetable and an integrated cross-government delivery plan”, the NAO said. “Without strong mechanisms to report on delivery and hold departments to account, there is a significant risk that delivery of the strategy’s underlying programmes will fall well into the future.”
Ministers also committed in 2020 to publishing an annual report setting out progress for what is now known as the Border Target Operating Model after several iterations over the past few years. But “this will not happen until 2025 at the earliest”, the NAO believes.
“The UK leaving the EU created a large-scale change in arrangements for the movement of goods across the border. However, more than three years after the end of the transition period, it is still not clear when full controls will be in place,” said Gareth Davies, head of the NAO.
“The border strategy has ambitious plans to use technology and data to facilitate trade while managing risks. To achieve its objectives, government requires strong delivery and accountability – including a more realistic approach to digital transformation – together with effective monitoring to enable future improvements.”
Meanwhile, businesses have called for ministers to “urgently review” the charges that come with the new import controls, which see traders fork out hundreds of pounds per consignment in the form of the Common User Charge (CUC) to help fund some aspects of the Border Target Operating Model such as new infrastructure.
Defra claimed that the new import requirements would cost businesses only “£330m per annum overall, across all EU imports” and through all ports of entry, including extra administrative costs, a figure that traders vehemently dispute.
The “real-world costs paint a starkly different picture”, said the British Meat Processors Association on Wednesday, as traders have been faced with an array of other port admin charges on top of the CUC levy.
“These are just the new port charges we’re describing – not included here are the multiple other hidden costs being baked into imported food prices, including the huge cost of all the new red tape and paperwork that’s now required to be done by vets and administrators before a lorry even leaves the factory,” warned BMPA trade policy advisor Peter Hardwick.
“The BMPA is calling on the government to urgently review these charges which, contrary to Defra’s claims of ‘minimal’ impact, are poised to significantly increase consumer prices.”
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