Audit Office Report Illustrates the Woeful State of Government Action on Brexit

UK – EUROPE – The report published at the end of last week by the National Audit Office (NAO) has been met in private with cries of derision and 'we told you so' from all quarters of the British logistics sector. Publicly of course the tone has been more muted, but a quick look at the facts revealed in the report reveals the state of readiness, or lack of such, even four and a half years after the vote to leave came in.

A quick run through the main points revealed in the report shine a spotlight on where the country is and where it really needs to be. Using the government’s own projections the facts are really quite daunting. The number of Customs declarations in 2021 is set to rise from the current 55 million to an eye watering 270 million.

Processing this number of Customs entries will require many more staff conversant with all import and export declaration procedures. Where these are to come from is lost in the double speak with this, the fourth such NAO report containing phrases to describe the state of systems readiness such as ‘challenging to deliver in their entirety’, with similar language for the Goods Vehicle Movement Service (GVMS) and the opening of the proposed new transit sites.

The government freely admits, with less than two months to go, it has no idea how many companies will sign up for such as the transit site solution which is due to see seven inland depots give an alternative to Customs clearance at the port of entry. Whilst expressing confidence that the private sector, i.e. freight forwarding agents, is working flat out to ensure all customers see their goods cleared without difficulty, the capacity for achieving this was rated by the Border and Protocol Delivery Group (BPDG) just two weeks ago as ‘a red rated risk’ even by July 2021.

Add to this that the plans to avoid disruption at the Channel ports are ‘still developing’, the startling assertion under a ‘best worst’ scenario that 40 - 70% of lorries travelling to the EU will have inappropriate documents, and the fact that nobody seems to know the amount of tonnage which transits between Northern Ireland and the South annually, nor how to resolve that spiky question, and the reaction from the relevant industry groups is predictable.

The group most affected when it comes to sorting out the mess will undoubtedly be freight forwarders, represented principally by the British International Freight Association (BIFA), and whose Director General, Robert Keen’s comments carried a somewhat wearisome air, the voice of a man who had told his non-responsive kids to get on with their homework, then been forced to watch as they failed the exams.

Keen said the NAO report, with its prediction of possible widespread border disruption at the end of the post-EU Exit transition period tallied with what BIFA members were reporting, saying they generally felt it will be some time before a fully functioning border is ready. He continued:

“BIFA anticipates that the businesses which use its members' freight forwarding and logistics services to conduct cross-border trade between the EU and the UK, will feel the impact of a sub-optimal border to varying degrees. BIFA acknowledges that, of late, the government has increasingly been putting in place coping responses where it can. How effective they will be remains to be seen.

“With less than two months to go to the end of the transition period, BIFA members are still waiting for the government to provide complete information and clarity on the processes by which cross-border trade will be conducted at the end of the year; the systems that will underpin those processes; and assurance that those systems, which have yet to be tested, will actually work, and be able to do what is necessary.

“Even before the pandemic, our members were concerned that the 11-month transition wouldn’t leave enough time to prepare for all the reasons mentioned in the latest NAO assessment. Having had their businesses affected badly by the effects of the pandemic, we really do continue to wonder whether they, and the clients they serve, will have the capacity to increase readiness for a sharp change in trading practices and conditions from the start of next year.”

A similar reaction came from Elizabeth de Jong, policy director at Logistics UK who said:

“Logistics UK has been working closely with government for some time to highlight the issues which could affect the smooth passage of goods through the supply chain after the end of the Transition Period. Much has been achieved but there is still much to be done if disruption is to be avoided from 1 January 2021, with detail still required in order for logistics operators to brief and train staff, and adopt new processes for declarations, tariff calculation and payments.”