National Audit Office releases report examining Defra’s Brexit progress

Posted in Infrastructure, mining and commodities

The Department for Environment, Food & Rural Affairs (Defra) is hugely affected by Brexit due to the extent of EU influence over its work and the level of EU legislation relating to its policy areas. In December 2017, the National Audit Office (NAO) published a report detailing how Defra was preparing for the UK’s departure from the EU. On 12 September 2018, the NAO published a second report with the purpose of assessing Defra’s progress. The report examines how Defra is managing its overall portfolio, as well as an analysis of 4 of its 43 work streams (which has since increased to 55).

The NAO report acknowledges the scale of Defra’s task and that it has achieved a great deal in difficult circumstances. However, the report concludes overall progress has been hampered by fluctuations in the likelihood of reaching a deal, making it tough for Defra to produce a solid plan. For four work streams in particular, the NAO has noted Defra’s failure to identify and manage the risks arising from not being fully prepared and, as a result, Defra has passed the point where it will be able to deliver what it had planned in the event of a ‘no-deal’ exit in March 2019. The four work streams are:

  • imports of animals and animal products – Defra’s focus is on building a system that replicates the EU’s TRACES system (the import control system for animals and animal products). Due to a short timescale, Defra’s aim is to ensure the system is able to provide the minimum operating capability, which the NAO suggests could hinder the development of long-term functionality. If a replica of the TRACES system is not in place come March 2019, border inspection posts will have to revert to manual data entry leading to higher error rates and an increased biosecurity risk;
  • exports of animals and animal products – currently, Defra uses a spreadsheet-based system for export health certificates which does not have the capacity to handle the increase in volume that may occur post-Brexit. Defra has proposed implementing an improved IT system capable of dealing with such an increase: however continuous delays mean it is likely the system will not be ready for a no-deal exit in March 2019;
  • regulation of chemicals – if an agreement is not reached for trade in chemicals, the UK will no longer participate in the European Chemicals Agency and will therefore no longer have access to the EU’s web-based system REACH (registration, evaluation, authorisation, and restriction of chemicals). Again, Defra aims to replicate the EU system, but its focus to date has been on ensuring there is a functioning system in place rather than considering what the future regulatory function will look like. In a no-deal scenario, registration of products by UK chemical manufacturers on the REACH system will cease to be recognised by the EU. The report makes clear recovering market access will be a lengthy process that cannot be started until the UK has left the EU: for this reason a robust contingency plan for a no-deal exit is imperative;
  • marine control and enforcement – currently, the UK has access to an EU data system, allowing EU countries to share intelligence and marine surveillance. Defra has proposed plans to strengthen its control and enforcement activities post-Brexit, which will be in place by March 2019. The NAO’s assessment however concludes this is highly unlikely to be achieved, meaning the UK will continue to manage the associated risk of lower capacity, a risk that will be heightened if the UK loses access to the EU intelligence and support which it currently relies on.

Although Defra’s plans for individual work streams and proposed IT systems are improving, the NAO has recognised that many lack quality and maturity and the problem is enhanced by the complexity and risk in the portfolio. This will have an impact on a variety of stakeholders, particularly those in the food and chemical sectors and fishing industry. The NAO has highlighted the importance of considering how Brexit affects Defra’s organisational strategy and future outlook for it to achieve its objective of a smooth and orderly exit from the EU. This requires identifying and managing the risks that arise from not being fully prepared, and the planning of appropriate contingency action.

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