Select committee inquiry
Defra's progress towards Brexit inquiry
Closed
What the inquiry looked at
“The Department for Environment, Food and Rural Affairs (Defra) is one of the government departments most affected by Brexit: it is responsible for 55 out of the 319 EU-related work streams. However, the National Audit Office has found that Defra is running out of time to plan and create new services, negotiate export agreements with other countries, and deliver new legislation in the Parliamentary time available between now and March 2019. The NAO concludes that Defra is at high risk of not being ready for a ‘no-deal’ EU Exit – where the UK would leave the EU without an agreement. The Department has not met key milestones in areas that are crucial to the UK economy, which span exports of animals and animal products, valued at £7.6bn, and fishing activity in English waters, which contributes £682m to UK GDP. It also faces further challenges in areas outside its control such as the chemical industry, with exports valued at £17bn in 2017. The NAO’s report recognises that Defra has made progress in preparing for Brexit, particularly in the time available. However, despite securing £320m in EU Exit spending and recruiting over 1,300 staff, Defra is unlikely to deliver its original plans for a ‘no-deal’ exit. The report therefore calls on the Department to accelerate its plans for the withdrawal agreement and finalise its contingency plans for a ‘no-deal’ scenario. The Committee will explore the challenges that Defra has faced and the impact this has had on its original Brexit plans. It will also examine the key areas where Defra is not ready for a ‘no-deal’ exit and what can be done to accelerate planning in the time available before the UK leaves the EU. Submit written evidence If you wish to submit written evidence to this inquiry, the deadline to do so is Tuesday 9 October 2018.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
In the committee's words, from the summary of 68th Report - Defra's progress towards Brexit ↗
The Department for Environment, Food & Rural Affairs (the Department) faces enormous challenges in the lead-up to EU Exit and, with the deadline of 29 March 2019 looming, still does not know which scenario it is preparing for.
There is a high level of risk in the Department’s portfolio, with many of its plans dependent on co-operation from other departments, the devolved administrations and agencies and the goodwill of EU member states. The Department is too complacent about the levels of disruption or interruption to trade that may be faced. Fundamental issues for food, chemical and animal importers and exporters are yet to be resolved.
Many businesses have not been given detailed advice on what is required by EU Exit, as the Department has had very limited engagement with stakeholders until recently. Six months since we last reported in May 2018, the situation for the Department’s stakeholders has changed very little, as the Department’s preparation for EU Exit continues to be complicated by its need to work on a range of solutions for different scenarios. It has now established a new directorate for business readiness and engagement, but its focus has been on industry and representative groups which means that individual businesses and organisations, in particular SMEs remain unaware and ill-prepared. This is all too little, too late and it is particularly concerning that the Department’s ability to impart specific information has been hampered by excessive secrecy at the centre of government and continuing uncertainty over the outcome of the negotiations.
The Department has made good progress in drafting the 86 statutory instruments it must prepare, with three-quarters of them either fully drafted or near completion. But in its efforts to rush through the drafting, we remain concerned about risks to quality.
The amount of parliamentary time that these, and those of other departments, will require is daunting. Cabinet Office needs to ensure that those of the highest significance across government receive greatest priority but that all receive adequate parliamentary scrutiny ahead of EU Exit. With the pace at which new legislation will have to be agreed we are seriously concerned about the level of scrutiny. We need the Department to be clear about the impact of not being able to make the necessary legal changes in time.
Muddling through in the hope of goodwill is highly risky and means many businesses are left not knowing what the future will bring.
What the government said
No government response is linked to this report.
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 3 September 2018 to 31 January 2019.
- Oral evidence 15 Oct 2018
- Report 14 Nov 2018
- Correspondence 3 letters
What it recommended 1 recommendation · 27 conclusions
1In a no-deal scenario there is a risk of UK exports of animals and animal...
Concluded (the committee's words)
In a no-deal scenario there is a risk of UK exports of animals and animal products being delayed at borders because of a shortage of vets. In the event of a no-deal Exit, the UK’s continued exports of animals and animal products to EU member states will for the first time need to be accompanied by export health certificates. These certificates currently have to be signed off by vets and the Department estimates that the equivalent of around 50 additional full-time vets will be needed to cope with the extra volume. Individual vets would probably take on such work on an ad hoc basis alongside their existing work, so the actual number of people required will be many more than 50 and the Department is cavalier about enough suitably qualified staff to take on this work being available. It believes that the training investment of around six hours online would not be a barrier to uptake, and that its requirements can be easily sourced from a pool of over 6,000 potential candidates in the private sector. However, the Department has failed to consider the geographic distribution of vets and their willingness to take on this additional work. At present the UK only allows this work to be undertaken by vets and although the Department is discussing this with the Royal College of Veterinary Surgeons no resolution has been reached that would extend the candidate pool. We are concerned that the increased demand for veterinary services will increase costs to UK exporters.
2Recommendation: The Department needs urgently to develop a credible plan for increasing vet capacity for...
Concluded (the committee's words)
Recommendation: The Department needs urgently to develop a credible plan for increasing vet capacity for export health certificates that does not add to exporters’ costs including addressing concerns around coverage across the country and whether it is appropriate or possible for non-vets to sign off health certificates.
3The Department is too complacent about the risk of disruption that UK chemical exporters could...
Concluded (the committee's words)
The Department is too complacent about the risk of disruption that UK chemical exporters could face in a no deal scenario. It is relying on the EU’s goodwill to help minimise any interruptions to trade. Under a no-deal Exit the registration of UK chemical products on the EU’s REACH system will no longer be recognised. Companies would not be able to continue exporting their products to EU member states until they had re-registered their products with the EU. We are concerned that the Department has underplayed what re-registration involves. It is dependent on the European Chemicals Agency delivering on its promise to open up the registration process to allow sufficient time to process the re-registrations without creating a hiatus in trade. The goodwill that this relies on may not be forthcoming if there is no deal, particularly if no deal results in a dispute over the financial settlement. There is also likely to be a spike in re-registrations following EU Exit, as UK manufacturers all seek to re-register their products as quickly as possible. In addition, manufacturers will incur costs for re-registration that the Department estimates at between £200 and £1,200.
4Recommendation: The Department and the Health and Safety Executive need to provide realistic, honest advice...
Concluded (the committee's words)
Recommendation: The Department and the Health and Safety Executive need to provide realistic, honest advice to chemical manufacturers about the implications of a no-deal exit, including the steps manufacturers need to take to re-register their products with the EU, and the possible interruption in their ability to trade with EU-27 countries.
5There are increased risks to food safety and of smuggling as a result of the...
Concluded (the committee's words)
There are increased risks to food safety and of smuggling as a result of the Department’s plan to allow food imports to pass through UK ports without 6 Defra’s progress towards Brexit checks following EU Exit. In the event of a no-deal Exit the Department intends to prioritise the flow of food imports in the first instance. This means that it will for a period following EU Exit continue to allow food imports from the EU to pass through UK ports without checks, and hopes that the EU will reciprocate this arrangement for UK exports. The Department concedes that its approach will add to biosecurity and food safety risks but says it has to balance the need to preserve the flow of goods against maintaining food standards and safety. This approach may also lead to an increased risk of smuggling if unscrupulous traders take advantage of the lax approach to border control.
6Recommendation: The Department needs to commit to a timeframe for implementing pre-notification and full checks...
Concluded (the committee's words)
Recommendation: The Department needs to commit to a timeframe for implementing pre-notification and full checks of EU food imports at UK borders.
7The Department’s engagement with industry stakeholders has been too little, too late, insufficiently focused on...
Concluded (the committee's words)
The Department’s engagement with industry stakeholders has been too little, too late, insufficiently focused on SMEs and hampered by excessive government secrecy. The Department argues that engaging with stakeholders at an earlier stage, whilst there were still a wide range of possible scenarios in play, would have been confusing and counter-productive. The Department sought permission on several occasions from the centre of government to communicate more freely but was prevented from doing so. It now has detailed plans for engagement to be rolled out, but many businesses feel it is “too little, too late” and that opportunities to keep businesses informed have been missed. The Department acknowledges this, but claims to have provided coherent messages, based on what is likely. The Department has used the staged release of government technical notices from August as the starting point for more detailed communication activities as these remove government constraints that have restricted its ability to talk openly with stakeholders. In previous discussions, the Department has been limited by confidentiality concerns and has even used non-disclosure agreements in discussions with, for example, the British Retail Consortium on areas where there are commercial or government sensitivities, such as border arrangements. The extent to which such agreements have been used is not clear. In response to concerns, the Department has recently established a new directorate for business readiness and engagement, but this step-up may not be sufficient as it is planning to produce guidance on re-registering chemical products in November 2018, only four months before Exit. We are concerned that the Department has been over-reliant on engaging with industry and sector groups rather than individual businesses and organisations and that SMEs in particular may be disadvantaged by this approach.
8Recommendation: The Department needs to limit the use of non-disclosure agreements to commercially sensitive discussions.
Concluded (the committee's words)
Recommendation: The Department needs to limit the use of non-disclosure agreements to commercially sensitive discussions. It should urgently step up its communications with businesses and other stakeholders on what they need to do to prepare, particularly with SMEs that are not affiliated to industry bodies.
9The Department has very little time left to get the necessary statutory instruments (SIs) on...
Concluded (the committee's words)
The Department has very little time left to get the necessary statutory instruments (SIs) on to the statute book in time for EU Exit, putting quality and parliamentary scrutiny at risk. The Department faces a huge challenge to have in place all of the necessary legislation to prepare the UK for EU Exit. It is one of the most affected departments and must lay 86 SIs by the end of January. The Department is confident that it can meet this challenge and has made a lot of progress since June, with over three-quarters of the SIs fully drafted or close to completion. However, this leaves Defra’s progress towards Brexit 7 around 20 that still require considerable drafting effort. The Department tells us it has worked hard with the devolved administrations over the summer to overcome hurdles and has set up an operations room that aims to unblock issues within 24 hours. It claims this has accelerated the drafting process without compromising on the quality of decision-making. The Department has recruited staff into this area of work from external and internal sources to ensure the deadline can be met. However, we remain concerned about risks to the quality of drafting given the speed at which the Department is having to act. We are also concerned about the amount of time available for parliamentary scrutiny given the volume of legislation across government that needs to go through parliament. The Department reports that most of its SIs are relatively straightforward only two contain changes that require consultation—but very long (some up to 150 pages) with a lot of technical detail, so a backlog could build up very quickly.
10Recommendation: The Cabinet Office should prioritise EU statutory instruments across government to ensure the drafting...
Concluded (the committee's words)
Recommendation: The Cabinet Office should prioritise EU statutory instruments across government to ensure the drafting of those of highest priority is completed to the proper quality standard, and that there is time for proper parliamentary scrutiny ahead of EU Exit.
11The Department is continuing to expand its workforce rapidly and, with time running out, is...
Concluded (the committee's words)
The Department is continuing to expand its workforce rapidly and, with time running out, is now having to take shortcuts in its recruitment and training of staff. For example, the Department needs to strengthen its capacity to patrol English fishing waters. The training programme needed for Marine Enforcement Officers has been front-loaded to a three-month intensive period rather than being carried out over the usual twelve months. In addition, given the need for increased veterinary capacity to process export health certificates in a no-deal scenario, the Department is looking into using non-vets to do some of the certification work. The Department recruited 1,300 staff in 2017–18 and aims to recruit a further 1,400 during 2018–19. It said it is about halfway through this process. We are concerned by the numbers needed and the availability of suitable staff. Many of these staff are relatively new and inexperienced graduates. The Department says that it is bringing experienced staff in from its agencies and that new staff are being deployed for less challenging ‘business as usual’ work, whilst experienced staff are focused on EU Exit work. This approach raises the risk that the agencies may become exposed if their essential skills and experience are depleted.
12Recommendation: In its response to this report, the Department should set out how it will...
Recommended (the committee's words)
Recommendation: In its response to this report, the Department should set out how it will ensure that all posts, including those unrelated to EU Exit, are staffed by people who are fully trained and with the right skills and experience to maintain quality of work and workforce well-being.
13The Department still has an enormous task leading up to EU Exit, including completing six...
Concluded (the committee's words)
The Department still has an enormous task leading up to EU Exit, including completing six critical IT systems that have not yet been tested. One of the six IT systems is the new import notification system, which will be used to manage food imports after Exit. The Department is confident that it will have a functioning system in place for a potential exit without a deal in March 2019, although it says manual workarounds may be needed. It is planning to start testing this system in January 2019 and this will inevitably throw up new issues and put increasing strain on the likelihood of it working in time. The Department is planning to test a number of its systems simultaneously early in the new year, so there is a risk that a 8 Defra’s progress towards Brexit high volume of issues will arise that the Department will have little time to address. The Department has been pragmatic in prioritising the most essential functions for March 2019 but has left building more enduring systems to the longer term.
14Recommendation: The Department should provide us with an update by the end of December 2018...
Concluded (the committee's words)
Recommendation: The Department should provide us with an update by the end of December 2018 on whether the key IT projects are on track for testing in the new year and a further update in January on the results of the testing. Defra’s progress towards Brexit 9 1 Risks to continuing international trade
15The Department told us that it has a dedicated work stream to develop its plans...
Concluded (the committee's words)
The Department told us that it has a dedicated work stream to develop its plans for an “enduring regime” on border controls for imports and is looking at how it can improve on the current EU border regime that would no longer apply to the UK in a no-deal scenario. This includes assessing the risk of smuggling and the development of a more risk-based approach to border control.25 However, the Department is focused on being prepared for “Day One” and not on the enduring regime, and so it acknowledges that there is initially an increased risk of smuggling. The Department said that it could not know for sure that what was in an individual lorry did not impinge on public safety or include smuggled goods, but added that, as a result of existing controls on how food is produced that apply across the EU27 member states, the risk following EU Exit would be no greater than before.26 Engagement with industry stakeholders
16The Department cannot yet fully predict what may happen in a no-deal scenario or whether...
Concluded (the committee's words)
The Department cannot yet fully predict what may happen in a no-deal scenario or whether arrangements will be in place with the various EU bodies, and this makes it difficult to communicate with businesses and industry stakeholders.27 The Department explained that, in the government’s technical notices, that were published in phases starting in August 2018, it has tried to set out as clearly as possible for stakeholders what it understands the current position to be and it was using these as a starting point for more detailed and open communication activities.28 It said that the technical notices present the message that “we very much hope this [no deal] won’t happen but, if it does, these are the things you need to do”.29 The Department said that it is developing guidance and training that will be shared “very shortly” on how to use the new IT systems. However, it has been difficult to inform stakeholders how to use IT systems that have not yet been fully developed. The Department is planning to provide further guidance in November 2018 on re-registering chemical products, just four months before EU Exit.30 As the exit date approaches, businesses need to make important decisions such as who they need to recruit and even, for smaller organisations, whether to cancel holidays. In response 23 Qq 40, 43 24 Q 104 25 Q 48 26 Q 46 27 Q 80 28 Q 21 29 Qq 151–154 30 Qq 73–74 Defra’s progress towards Brexit 13 to criticism for its lack of engagement, the Department told us that it is increasing its communications staff complement and has set up a new directorate for business readiness and engagement. However, it is still considering when best to get particular messages to particular groups of stakeholders.31
17The Department acknowledged that levels of secrecy imposed by government had hampered their discussions and...
Concluded (the committee's words)
The Department acknowledged that levels of secrecy imposed by government had hampered their discussions and that it has had debates with government about the timing for release of information. It had asked DExEU many times for permission to communicate more freely in order to get information out as early as it felt it was needed.32 It had used non-disclosure agreements in areas of commercial sensitivity and for discussions about border arrangements with industry representative groups. The Department stressed that non-disclosure agreements were used in discussions where the Department wanted to get an early reaction from industry on the arrangements that would be in place. For example, the Department asked the British Retail Consortium to look at the new import control system, but did not want the Consortium to pass on information from these discussions to its members.33 However, we were concerned that this approach keeps small and medium- sized enterprises in the dark and prevents them from finding out what they need to know to make preparations. Defra insisted it was important to be able to have private discussions but is now aiming to have “the maximum number of conversations with the widest possible range of people.”34 31 Qq 3, 149–150 32 Qq 158, 160; C&AG’s Report, para 17 33 Qq 26–28 34 Q 31 14 Defra’s progress towards Brexit 2 The Department’s wider challenges New legislation
18The Department faces an unprecedented challenge in the amount of legislation it needs to lay...
Concluded (the committee's words)
The Department faces an unprecedented challenge in the amount of legislation it needs to lay in order to prepare the UK for EU Exit. It is one of the most affected departments and has in the region of 850 separate pieces of legislation that have been grouped in to 86 statutory instruments (SIs). Almost all of these have a devolution angle which adds a further complication to getting them on to the statute book.35 But the Department assured us that it has made considerable progress since June and has been working closely with the devolved administrations over the summer. It is confident it can lay more than half of the SIs by the end of November and the rest by the end of January.36
19The Department stated that all SIs have been started and nearly half are fully drafted,...
Concluded (the committee's words)
The Department stated that all SIs have been started and nearly half are fully drafted, with a further 24 close to completion; leaving around 20 that still need considerable drafting effort. The Department told us it has accelerated the drafting process and has recruited staff into this area of work from external and internal sources to ensure the deadline can be met. It reported that it has also set up an operations room to unblock issues within 24 hours. We raised the concern that working at such speed could lead to poor quality legislation and challenged the Department to explain how it is maintaining quality. The Department assured us it is prioritising its time on the areas that need it and all the SIs have already been through extensive quality control processes and detailed discussions.37
20We challenged the Department on its plans to get all its SIs through parliament in...
Concluded (the committee's words)
We challenged the Department on its plans to get all its SIs through parliament in time, given that it does not have control over the parliamentary programme or priorities and that there are also the SIs of other departments to be considered. The Department responded that it is now focused on ensuring that it presents the SIs to parliament as timetabled.38 However, the process of scrutiny can be lengthy. The Committee knew of one SI recently that took an hour and a half of consideration. If this was widely repeated there would soon be a serious backlog. The Department said it is continuing to work closely with Cabinet Office around the whole programme and is confident of its ability to meet the agreed timetable to present all the SIs to parliament to allow sufficient time for scrutiny.39 It assured us that most of its legislation is relatively straightforward, although some contain a great deal of technical information and are very long, some up to 150 pages.40 Getting the right staff in place
21The Department recruited around 1,300 staff in 2017–18 and it told us it intends to...
Concluded (the committee's words)
The Department recruited around 1,300 staff in 2017–18 and it told us it intends to recruit a further 1,400 in 2018–19, more than doubling the size of the core department since March 2017.41 It reported that it was about halfway through its 2018–19 recruitment programme. We asked the Department about how it was ensuring it has the right skills 35 Q 128 36 Q 129 37 Qq 132–137 38 Qq 129, 136 39 Qq 131, 143 40 Q 139 41 Q 11 Defra’s progress towards Brexit 15 in place in order to continue to ramp up its activities and meet its deadlines and about potential over-reliance on recent graduates. The Department said that it has enhanced its induction processes and training for staff and that it is attracting people from a range of sources, including people from other departments and from outside government. It is deploying newer recruits to its business as usual work and releasing experienced staff for the more demanding EU Exit work.42
22The rate of growth in the Department creates additional challenges, in particular in terms of...
Concluded (the committee's words)
The rate of growth in the Department creates additional challenges, in particular in terms of the capability and corporate knowledge within teams. As a result of its rapid recruitment, the Department has a different mix of people from what it is used to and, to aid assimilation, is running training programmes in areas such as legislation, Parliament, devolution and the EU in addition to its induction programme.43 It is also recruiting experienced project managers familiar with big programmes to grow its capability within its portfolio management office and within the work streams. The Department conceded that there is competition from other departments for staff but said it continues to be successful in recruiting staff and has developed strategic relationships with suppliers to underpin this.44
23The Department has taken staff from some of its delivery bodies, potentially leaving them without...
Concluded (the committee's words)
The Department has taken staff from some of its delivery bodies, potentially leaving them without sufficient experienced staff. It said it has acted strategically to ensure that the most capable staff across the Defra Group are deployed where they are most needed and, where necessary, backfilling posts with less experienced staff. The Department said its specific needs have changed over time, from policy to project and programme skills and will change again towards operational delivery.45
24The Department said that it was accelerating its recruitment to get people in sooner and...
Concluded (the committee's words)
The Department said that it was accelerating its recruitment to get people in sooner and looking for ways of shortening its processes. It cited its need for additional Marine Enforcement Officers to significantly enhance sea and aerial surveillance capability to patrol fishing waters. The Department has now agreed the business case with HM Treasury to recruit these additional staff.46 In order to do this, the Department publicly launched the recruitment a month earlier than planned in September 2018, and has already received a large number of applications.47 Instead of the 12 months training that had previously been provided in advance of deployment, the Department said it was front-loading its training programme, providing three months intensive training and continuing the training after they have been deployed.48 To supplement veterinary capacity, the Department is in discussion with the Royal College of Veterinary Surgeons on the use of non-qualified staff to carry out parts of the export health certification process, where veterinary expertise is not required.49 42 Q 17 43 Q 18 44 Qq 12, 14, 16 45 Q 19 46 Q 106 47 Qq 4, 107 48 Qq 109–110 49 Q 60 16 Defra’s progress towards Brexit Critical IT systems
25The Department is developing six critical IT systems that have not yet been fully tested.
Concluded (the committee's words)
The Department is developing six critical IT systems that have not yet been fully tested. These are needed to replace EU systems to which the UK will no longer have access. For example, the Department is building an import notification system for imports of animals and animal products to replace TRACES (trade control and export system), the EU’s system to which the UK will no longer have access. The Department told it us it is confident that its systems will be available in time for a no-deal scenario in March 2019, but recognised that some issues are bound to arise as a result of its end-to-end testing. It acknowledged that it cannot predict what these issues will be and told us that working to a fixed deadline and dealing with such scale and complexity does mean it is carrying high risk and cannot guarantee that it will be able to deal with all the issues that arise in time.50
26The food import notification system is the most complex of the Department’s systems and is...
Concluded (the committee's words)
The food import notification system is the most complex of the Department’s systems and is proceeding well, according to the Department. Testing will take place in January and February 2019. The Department anticipated that there will be issues but said that it has contingency plans ready depending on what the tests show. It recognised that there are huge challenges saying that “the thing that keeps me awake at night is the fact that we cannot know until we have gone through this process [end-to-end testing] what we will find”. The project has been rated amber/green by the Infrastructure and Projects Authority but the Department concedes there is still a lot to do. The system has three parts and, even if its component parts work well separately, there is no guarantee that they will function properly together.51
27The Department told us that the UK’s system that will replace the REACH (registration, evaluation,...
Concluded (the committee's words)
The Department told us that the UK’s system that will replace the REACH (registration, evaluation, authorisation and restriction of chemicals) system used within the EU for registration of chemical products is about to enter its testing phase. This system will be unsophisticated but is designed to address the basic needs of industry with a contingency solution to enable it to function at greater scale and with better functionality in the longer term.52 The Department also told us that the system to support export health certificates would be an unsophisticated but resilient contingency system that would enable users to find the information they need whilst a more enduring system is developed. Three other systems—for fish catch certificates, fluorinated gases and ozone-depleting substances and veterinary medicines authorisation—are all scheduled for end-to-end testing to commence in January.53
28The Department stressed that it has done all it can to identify, pre-empt and mitigate...
Concluded (the committee's words)
The Department stressed that it has done all it can to identify, pre-empt and mitigate possible issues with the systems and that it was proceeding with its programmes in the knowledge that it will be challenging.54 We remain concerned that there will be so much concurrent critical testing activity in January leaving little time to resolve issues that arise.55 The Department emphasised that it has received assurance over its IT portfolio as a whole from the Infrastructure and Projects Authority, as well as on some of the individual projects.56 50 Q 7 51 Qq 7, 8 52 Qq 87, 89 53 Qq 90–92 54 Qq 8, 92 55 Q 164 56 Q 93 Defra’s progress towards Brexit 17
Evidence
Oral evidence sessions 1
- 15 Oct 2018No witnesses recordedparliament.uk ↗
Correspondence 3 letters
- 31 Jan 2019Letter from Clare Moriarty to Chair regarding Department for Environment, Food and Rural Affair's testing of the Department's EU Exit IT projects - dated 28.01.19To committee
- 29 Jan 2019Letter from George Eustace MP to Meg Hillier regarding future fushing opportunities - dated 16.01.2019To committee
- 13 Nov 2018Defra to Chair regarding Non-Disclosure Agreements - 31.10.2018