1.On the basis of three reports by the Comptroller and Auditor General, we took evidence from the Department for Exiting the European Union (DExEU), Cabinet Office and HM Treasury on implementing the UK’s Exit from the European Union (EU).
2.The task of implementing the UK’s Exit from the EU will require government to develop new policies to operate post-Exit, and put in place the necessary primary and secondary legislation. DExEU, drawing upon work from across departments, has identified 313 ‘work streams’ that need to be taken forward to support the Exit process. DExEU estimates that up to 1,000 pieces of secondary legislation must be in place by the time the UK leaves the EU in March 2019. In some instances, work streams will require new systems and processes to be developed, goods and services bought, and people recruited.
3.DExEU was set up in July 2016 specifically to manage the process of Exit from the centre of government. It supports the negotiations with the EU and is responsible for “managing the strategic approach to exiting from the EU”, including coordination of departments’ planning and delivery. The Cabinet Office has “the function of supporting all the work for the delivery of projects as they come on stream”, including coordinating and supporting the recruitment and deployment of staff needed for Exit. The Treasury is responsible for allocating funding to departments for the work needed for Exit.
4.The centre of government has been reorganised to take forward the task of leaving the EU, most notably with the creation of DExEU and a new Department for International Trade (DIT). DExEU had expanded to around 600 staff by the end of 2017. The Cabinet Office reported that around 4,000 people were moved across the civil service to support the creation of DExEU and DIT, and that another 1,000 had made moves since.
5.Since it was formed in July 2016 DExEU has focused on coordinating the planning effort across government. It has worked with departments to identify the work streams that departments would need to take forward as a consequence of the UK leaving the EU. It has asked departments to develop plans for each work stream and told us that “Departments are obliged to cover all scenarios, which includes a no-deal scenario”. Part of its role is ensuring that departments’ plans for these work streams are “up to scratch”. It told us that based on 18 months of work it knew what would need to be done and what decisions would have to be taken.
6.DExEU and Cabinet Office said that the level of definition in plans would evolve, but that there was “a long road to go in turning some of those plans into reality.” The Cabinet Office described the “natural pace” for implementation: developing customer requirements, design, and getting suppliers in. It believed this pace would “frustrate the system” but would be important to respect: “if we rush it, we will see a big problem in a couple of years’ time”. However, departments will not be able to identify the people and skills they need until the level of detail in plans has increased. The Cabinet Office felt that “we might have been a little slower out of the traps than we would have wished”. Departments must also take into account the length of time needed to recruit staff. The Cabinet Office could not tell us exactly how long it takes to get someone in post once the need has been identified, but believed it takes a number of months. DExEU and the Cabinet Office acknowledged that the pace of this work needs to be ramped up to make the plans “come off the page and turn into delivery”.
7.In March 2016, prior to the referendum on leaving the EU, the NAO reported in Delivering major projects in government: a briefing for the Committee of Public Accounts that government had an over-ambitious portfolio in terms of the volume, scale and complexity of its projects. The NAO highlighted the need for better early planning, prioritisation and performance measurement.
8.The Cabinet Office told us that departments do not have the technical, project or senior leadership capacity to deliver Brexit alongside all their other planned activity. When, in May 2017, the Infrastructure and Projects Authority asked departments to prioritise their projects, only four departments formally responded, and only two of those identified any project as low-ranking, to be considered for re-phasing, re-scoping, deferring or cancelling. The Cabinet Office described prioritisation in departments as “happening in lots of tiny ways”, due to, for example, people being moved from other work onto Brexit, but it believed that prioritisation was going to be “increasingly important”.
9.The Cabinet Office suggested that within the next six months departments would need to have had “serious conversations” about prioritisation. Doing so would require them to put “everything on the table” such as business-as-usual activity, planned business changes and manifesto commitments. In his earlier evidence to this Committee on Brexit and the future of Customs, the Permanent Secretary of HMRC commented that “I do not believe that it is possible to take 250 existing programmes of change and simply add Brexit on. I think you reach the point of organisational capacity and capability and you simply can’t say ‘I can do 250; now I can do 320; now I can do 350’ I just do not think that is credible”. He reported that HMRC plans to carry out a full re-prioritisation exercise across its organisation by the end of the financial year.
10.The government sets out its priorities publicly in the form of Single Departmental Plans. The plans for 2017–18 were published on 14 December 2017, almost nine months after the start of the financial year to which they refer. The plans include as the number one priority for the whole of government to “Get the best Brexit deal for Britain”. Each department published individual plans, many of which include Brexit as an additional priority to those present in previous years. However, the plans did not set out any areas which were de-prioritised or provide detail on anything which would be stopped.
11.The civil service has faced long-standing capability challenges. Our predecessors on this Committee found too often that projects went ahead without departments knowing if they would have the skills to deliver them. The Committee reported in March 2016 that “The Civil Service faces serious skills shortages in delivering major projects, especially in the commercial and digital skills needed to deliver ‘transformation’ projects”.
12.There is a risk that this pattern is repeated as the civil service does not currently have the people and skills needed for Brexit work. The Cabinet Office confirmed to us that “We do not have all the people today who we need to build all the things we have to”. Departments will be competing for these skills against private sector organisations also preparing for Brexit. The Cabinet Office was concerned about this: “I think there could be an issue in the marketplace; we are competing for skills that are pretty rare.”
13.We questioned the speed with which recruitment arrangements were being put in place. Although the Cabinet Office had taken action to improve the recruitment of specialist skills, it took eight months to create a common framework for hiring technology specialists across government, and more than a year for commercial specialists. As already described, the Cabinet Office could not present a clear picture of how long it takes to recruit someone into a role. It reported that it was working to improve parts of the recruitment process, such as using shared recruitment as a more efficient way to get people into similar posts across government.
14.The Cabinet Office told us that the resources, in terms of the skills needed, would be built over the course of the next 12 months, very close to when the UK exits the EU. It told us it was planning to use the experience it had gained of redeploying and hiring policy staff to inform its efforts to fill other roles. It reported that it had identified a number of routes by which it might obtain the technical skills that would be needed. However, it cautioned that the recruitment process would not be without bumps, which might risk delays to an already tight timetable.
1 C&AG’s Report, , Session 2017–2019, HC 593, 17 November 2017
2 Q 24
3 C&AG’s Report, , page 4
4 Q 74
5 Q 78; C&AG’s Report, , page 5
6 C&AG’s Report, , page 13
7 Qq 3, 21
8 Q 5
9 Q 24; C&AG’s report, , page 8
10 Q 26
11 Q 82
12 Q 26
13 Q6, Q27
14 Q 17
15 Qq 8–9
16 Q 27
17 C&AG’s Report, , Session 2015–16, HC 713, 6 January 2016
18 Q 37
19 C&AG’s Report, , page 13
20 Q 37
21 Qq 38, 42
22 , HC (2017–19) 401, Q21
23 The Single Departmental Plans were published here
24 Committee of Public Accounts, , HC 710, Thirty-first Report of Session 2015–16, 9 March 2016
25 Q 5
26 Q 18
27 Q 60
28 Qq 8–10
29 Qq 5, 20
30 Qq 19, 60
6 February 2018