The National Audit Office report on 'implementing an effective border' published earlier this week makes sad reading with the 'key facts' in the summary being 5, the number of times the government has delayed introducing border controls, £4.7 billion, the amount to be spent on the 13 most significant programmes and 39 million, the extra customs declarations completed in 2022. This is all to make Britain poorer and to reduce trade with our nearest market. It isn't as if the investment even has an eventual positive payback.
Among the other highlighted facts is the original HMRC estimate of £7.5 billion for the total annual cost to UK businesses of completing customs declarations on trade between the UK and the EU, which will reduce quite a bit but has yet to be updated. The number of Export Health Certificates issued by the Animal and Plant Health Agency, on goods exported from GB to the EU during 2023 (excluding goods moved to Northern Ireland) is 316,000.
The NAO says the government has "not produced an estimate of the total cost to traders of complying with new controls." But they do say that DEFRA estimates the annual cost to traders of the sanitary and phytosanitary (SPS) controls introduced for EU imports between January 2021 and December 2023 will be £54 million.
Traders will also face £469 million in additional costs from introducing the remaining import controls the government has yet to implement. Note also that the £4.7 billion is only the capital cost of building infrastructure and doesn't cover the additional permanent operational cost of the staff required to manage the border.
Key findings are that:
- The UK has faced increased biosecurity risk as a result of the phased approach to introducing full import controls.
- The government’s new import control regime will impose new costs on businesses trading goods between the UK and the EU, but these costs should be less than it originally planned, and enable greater focus on goods that are higher risk.
- Import controls are being phased in, and new sanitary and phytosanitary (SPS) controls may operate on an inconsistent and incomplete basis for a period after they are introduced due to ongoing uncertainties and differences in port readiness.
- Changes in direction about the introduction of import controls and difficulties forecasting requirements have resulted in the government spending money on infrastructure and staff that were ultimately not needed and have made it harder for stakeholders to plan.
- The Cabinet Office has not yet produced a comprehensive performance framework to measure how well the border is operating.
- The government has no clear timetable for the implementation of its strategy to achieve its ambition of having “the world’s most effective border”.
As usual, we are also attempting something extremely ambitious that will almost certainly fail at a massive cost to the taxpayer with zero benefits. This is the Single Trade Window (STW), a programme which, "aims to reduce friction for traders moving goods across the border and improve the efficiency and effectiveness of government processes through improved data sharing and analysis."
In short, it's another huge government IT system said to be a "fundamental element of the government’s plans to implement both the remaining import controls and the Strategy." Just sit back and watch the costs go up - and up, and up.
HMRC, is apparently the lead department and an initial contract worth up to £150 million by 2026 has been placed with Deloitte, working with IBM.
The NAO has reviewed the programme and "identified several major challenges" - don't laugh, it's your money. They say - and this could have been cut and pasted from any number of previous government IT projects - in their view, "the programme’s objectives and timescales are overly optimistic and continue to under-estimate the complexity of what is required."
The programme is already several months behind the timetable set out in HMRC's previous February 2023 business case and HMRC has acknowledged the complexity and challenges in delivering the STW. The latest March 2024 schedule doesn't commit to milestones for the delivery of future strategic releases but it does specify the functionality that will be delivered incrementally by 2027.
The NAO says delays could reduce the potential future benefits. The March 2024 business case estimates that a 12-month delay in delivering the Single Trader Window could reduce the benefits by £866 million over 10 years.
In conclusion, the spending watchdog says that "More than three years after the end of the transition period, full import controls are still not in place. Although departments appear to be on course to introduce most of the remaining controls during 2024, there remains uncertainty about when full SPS
controls will be in place."
"In addition, the model’s operation is still to be tested and the government may not be able to apply controls consistently as the controls are phased in. The government’s new border target operating model should reduce costs to traders in comparison to its initial plans. However, repeated delays in
implementing controls have meant ongoing uncertainty and an increase in risk, and the government and border stakeholders have also incurred unnecessary costs.
"This could have been avoided if the government had established a clearer vision of how the border should operate from the start."
By the time all of this is operating, assuming it ever works as intended, I wouldn't be at all surprised to see that talks have started between the UK and EU on our rejoining the single market, rendering all of the costs a total waste of money.
