We examined the government’s preparedness for Brexit, particularly should there be no deal with the EU before the end of March, throughout 2018. In our eight reports we expressed concern about the pace of progress and departments’ lack of urgency. This remained our key concern when we took evidence in February 2019 from the Department for Transport and the Department for the Environment, Food & Rural Affairs, just 7 weeks before the UK would leave the EU.
The Department for Transport (DfT) is responsible for preparing the transport system for when the UK leaves the EU, including maintaining transport connectivity between the UK and the EU via road, rail, maritime and air. The Department for the Environment, Food & Rural Affairs (Defra) is one of the departments most affected by Brexit, with almost all of its areas of responsibility framed by EU legislation, including imports and exports of food, animals and animal products and regulation of the chemical industry. The impact of exiting the EU on the movement of freight at the border forms a key part of preparations within both Departments.
During autumn 2018, the government updated its planning assumptions relating to freight crossing the border should no deal be agreed with the EU. By the end of October, departments agreed a revised worst-case assumption that the normal flow of goods across the short channel crossings could be reduced by up to 87 per cent, with the situation persisting for up to six months. In response to the changed assumptions, DfT developed options to mitigate the risks to freight transport of the UK leaving the EU without a deal. DfT decided to procure additional ferry capacity at ports other than those at the short straits – the Dover to Calais channel crossings. To ensure that services would be in place in time for 29 March 2019, DfT used an unusual exemption to usual procurement processes which allowed it to act outside normal procurement rules on the basis that it was dealing with an emergency. The DfT approached nine companies and after receiving no compliant bids in the first round it opened up bidding the next weekend for 8 days and received three bids. The DfT signed contracts with these three companies. Two of these, Brittany Ferries and DFDS, are long-established ferry companies. The third, Seaborne Freight, is a start-up company which did not operate any services at the time of procurement. Seaborne had not passed normal due diligence. The three contracts were due to provide additional freight capacity equivalent to 11% of the normal flow across the short crossings. On 9 February 2019, DfT announced that it was terminating the contract with Seaborne Freight. The procurement was also subject to a legal challenge from Eurotunnel. On 1 March it was reported that the Department for Transport had come to a £33 million settlement with Eurotunnel in that case. We are seeking information on the costs and implications of the settlement with the Department.
Published: 12 March 2019