Brexit - systems still hang in the balance for EU-UK border success

By Derek du Preez

February 9, 2022

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The UK left the EU on 31st January 2020 and entered a transition period during which existing rules on trade, travel and business continued to apply. However, this ended on 31 December 2020 and the Northern Ireland Protocol came into effect, setting Brexit into full swing. 

Whilst some grace period delays have been allowed for certain border checks and preparations, what's clear from a report released this week by MPs on the influential Public Accounts Committee (PAC) is that many systems across a number of organizations, in both the UK and the EU, still aren't set up or established to ensure disruption-free trade and travel across borders. 

The PAC report notes that there has already been a clear increase in costs, paperwork and border delays, but what should be of concern is the number of systems that hang in the balance that could cause problems down the line. 

Given that it has been a number of years since the UK declared it was going to carry out its Brexit agenda, the government's level of preparedness is being brought into question. Yes, there has been disruption caused by COVID-19, but to ensure a recovery is sustainable, a focus on smooth trade with the UK's largest and nearest trading bloc should be a priority. 

Dame Meg Hillier MP, Chair of the Public Accounts Committee, said:

One of the great promises of Brexit was freeing British businesses to give them the headroom to maximise their productivity and contribution to the economy - even more desperately needed now on the long road to recovery from the pandemic.

Yet the only detectable impact so far is increased costs, paperwork and border delays.

The PAC has repeatedly reported on Brexit preparedness and at every step there have been delays to promised deadlines. It's time the government was honest about the problems rather than overpromising.

In our view, there is much more work that Government should be doing in the short term to understand and minimise the current burden on those trading with the EU, to address the immediate delivery and readiness risks in introducing import controls, and to have a border in place which is operating effectively without further delays or temporary measures.

More to come

As already highlighted, the PAC report points to a number of systems that are either in development, or need further work, in order to better manage the flow of goods and people between the UK and the EU. 

One particular concern is that the new border arrangements have yet to be tested with normal passenger volumes, which have been suppressed during the COVID-19 pandemic. The report notes that a return to higher passenger volumes is likely going to coincide with the EU's introduction of its new Entry and Exit system, which is expected in 2022, and is being dubbed as an ‘automated IT system' that makes use of biometric data (fingerprints and captured facial images). 

There are risks that this could lead to longer processing of passengers traveling from the UK to the EU and the PAC wants the government to clarify how it will manage increased pressures and any contingency plans that may be required. 

The report also highlights that the UK originally intended to introduce import controls on goods entering Great Britain from the EU when the transition period ended in January 2021. However, the government has delayed introducing these controls three times and now plans to bring them in between January 2022 and November 2022. 

It notes that departments have made progress towards introducing these systems, but work still needs to be done. For example, currently, the Import of Products, Animals, Food and Feed System (IPAFFS) for sanitary and phytosanitary checks (SPS) cannot communicate with the Goods Vehicle Movement Service (GVMS) system to tell hauliers where they should go if the goods they are carrying are selected for SPS checks. 

The PAC wants the government to set out what has been delivered so far and its plans for ensuring that it delivers key systems requirements, including links between systems. 

The report also points to the government's ambition for the UK to have the ‘world's most effective border by 2025' - which we reported on recently - which will rely on cross government digital programmes. The PAC notes that the government does not have a good track record in delivering such projects.

The report states: 

In December 2020 the government published its strategy to put in place the "world's most effective border" by 2025, this set out the government's strategic objectives and target operating model for the border at a high level but does not contain any significant detail about the delivery plans underpinning these. 

To support delivery of the strategy, the October 2021 Spending Review provided £838 million to deliver critical customs IT systems and £180 million to deliver a single trade window. HMRC considers these investments should make it easier for traders by making the system simpler and ensuring they only have to submit information once. 

Defra is also working on a range of digital solutions to reduce burdens on traders. While departments did well putting in place the initial IT capability needed for January 2021, government does not generally have a good track record delivering large-scale IT projects.

HMRC also needs to migrate all users from its existing customs system to the new Customs Declaration Service (CDS). Completing this migration will be challenging given that, by October 2021, only 42 of 5,000 users had moved across. HMRC expects to see a big increase in traders migrating after January, once they have adapted to the introduction of import controls.

The Committee is asking that the government write to it within six months, setting out the timetable for its planned programme of work to create the world's most effective border by 2025, and the key risks it will need to manage it taking this forward. 

My take

There is still a long way to go to ensure Brexit is a ‘success' and the technology agenda to achieve this appears fragmented, without clear priorities, nor much oversight. There's opportunity there, but it doesn't feel like there's any real ambition or drive to achieve it. I've got a feeling this won't be the last report the PAC writes on the topic…