Money

Where no-deal Brexit funding boost will be spent


Sajid Javid, the UK chancellor, has announced an eye catching extra £2.1bn to boost no-deal Brexit planning, taking the total amount allocated by the government to £6.3bn.

With Boris Johnson’s new government vowing to leave the EU by its scheduled exit date of October 31 — with or without a deal — the new spending marks a dramatic shift from the cautious approach taken by Mr Javid’s predecessor in the Treasury, Philip Hammond.

It is part of a wider push by Mr Johnson to get Britain ready for its long awaited departure from the EU and to convince Brussels that he is serious.

But already MPs on the public accounts committee have said they intend to investigate the Brexit spending to ensure that none of it is a waste of taxpayers money.

So how much of it is new money? And how much will actually be spent by a government which — despite the step up in no-deal rhetoric — maintains it still wants to get a deal with the EU?

The new money

Mr Javid announced £2.1bn of new cash but only £1.1bn of it will actually be allocated to government departments now.

The other £1bn is a more hypothetical sum that is available for government departments to make bids. It is described as money that will “enhance operational preparedness this year if needed”.

Joe Owen, programme director at the Institute for Government, said the fact that the £1bn was not yet allocated was a sign that departments were not already “screaming out for extra money” for no-deal planning.

And while the other £1.1bn has been earmarked for specific projects, there are questions about how much of it can be spent in such a short timeframe. Mr Owen said: “All of that spend is sensible spend but most of it won’t make a major difference before October 31.”

Medical supplies

Mr Javid will allocate £434m “to help ensure continuity of vital medicines”, partly through extra freight capacity — including ferries — and the hiring of scarce warehouse space for stockpiling.

But officials have admitted that this figure includes a £300m plan, already announced last Friday, to increase freight capacity for medical supplies

Border/customs

A total of £344m will be spent on new border and customs operations. The money will pay for an extra 500 border force officers, taking the total of new officers up to 1,000 for the year. It remains to be seen whether that training can take place in less than 100 days — rather than the usual year or so.

The funding will also pay for a doubling in support for customs agents to upgrade their IT systems and to help companies fill in customs declarations. It would also fund extra staff to deal with a rise in UK passport applications — citizens going to the EU after a no-deal exit would need at least six months left on their passport.

Some of the money would go towards improving transport infrastructure around ports. There will be additional funding for “Operation Brock” — which is designed to manage traffic disruption in Kent by using Manston airport as a lorry park.

Exporters

There is £108m to help exporters prepare for Brexit and to exploit “new opportunities”. The government is increasingly worried about the slow take-up of initiatives designed to get companies ready for a no-deal Brexit. For example, barely 10,000 companies out of 145,000 approached by officials have signed up to a new “Transitional Simplified Procedures” system for exporters.

Martin McTague, policy chair of the Federation of Small Businesses, said the money was not enough. “Many small businesses are desperately underprepared for a chaotic no-deal Brexit on October 31,” he said. “This offer desperately underestimates the support that small businesses need . . . it does not really cut it.” The FSB has urged ministers to take action, for example by issuing EORI numbers (economic operator registration and identification) to all VAT-registered small firms.

The FSB wants “Brexit vouchers” of up to £3,000 to be given to companies for no-deal preparation. Similar systems have been implemented in Ireland and the Netherlands.

Public information

Some £138m will be spent on a new information campaign to encourage readiness — both of companies and individuals — for Brexit on October 31. There will be support for specific areas such as Northern Ireland. Also there will be greater consular support for UK citizens living overseas.



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