The audit watchdog says there are risks to UK border operations if the UK leaves the EU without an agreement on 29 March 2019, and even with a withdrawal agreement, significant challenges lie ahead to ensure the UK border is fully functioning, because of the reduced time available to plan and implement new border regimes.

The NAO points out that the government is heavily dependent on third parties, such as traders, making changes to their systems, behaviours and complying with new processes. Government papers from July 2018 stated that it was already too late to ensure that all traders were properly prepared for ‘no deal’.

The effectiveness of departments’ border planning and delivery has been affected by ongoing uncertainty and delays in negotiations. For example, HMRC originally intended to communicate about the new customs declaration service (CDS) with businesses that trade exclusively with the EU in early 2018 but only started communicating in August 2018.

It says many of the changes needed to be made by government under a ‘no deal’ scenario may not be ready on time. In particular, 11 of 12 critical systems needing to be replaced or changed to manage the border are at risk of not being delivered on time and to acceptable quality.

There is an increased delivery risk due to the high interdependence between ‘at risk’ government programmes reliant on another ‘at risk’ programme. For example, seven of the most critical border systems are interdependent with CDS which is still under development, and/or its legacy system customs handling of import and export freight (CHIEF), and all must be ready on day one for the border to operate as planned.

New infrastructure to track and physically examine goods cannot be built before March 2019. Without this, the UK will not be able to fully enforce compliance regimes at the border on day one, the NAO said.

The most complex issues relating to the movement of goods at the border, such as arrangements to apply at the Northern Ireland and Ireland border and a system that will allow roll-on roll-off (RORO) ferry ports and Eurotunnel to operate smoothly still need to be resolved.

NAO says the government has not yet determined how this will happen but currently plans on requiring customs declarations to be made in advance of arrival at RORO locations. This represents a major business change for traders and hauliers. Systems also need to be implemented to allow HMRC to match a customs declaration to the movement of goods for compliance purposes. Discussions regarding how this will operate in practice are still ongoing with ports and representatives of the businesses who will need to operate the system.

NAO says that in the event of day one of ‘no deal’ the government has accepted that the border will be ‘less than optimal’. This might include delays for goods crossing the border, increased opportunities for tax and regulatory non-compliance, and less information to inform checks of people crossing the border.

Government has decided to prioritise safety and security; the flow of people and goods; and then compliance activity, including the collection of revenue, in the short term.

The NAO’s report warns that organised criminals and others are likely to be quick to exploit any perceived weaknesses or gaps in the enforcement regime. This, combined with the UK’s potential loss of access to EU law enforcement and national security tools, could create security weaknesses which the government would need to address urgently.

Amyas Morse, NAO head, said: ‘Government has openly accepted the border will be sub-optimal if there is no deal with the EU on 29 March 2019. It is not clear what sub-optimal means in practice, or how long this will last. But what is clear is that businesses and individuals who are reliant on the border running smoothly will pay the price.’

The UK border: preparedness for EU exit is here

Report by Pat Sweet