Background to the report
The transition period is due to end on 31 December 2020, at which point the UK will cease to be part of the EU single market and customs union. From 1 January 2021 there will be changes in how the UK trades with the EU and in the customs, safety and regulatory checks required at the UK-EU border. The EU will also begin treating the UK as a third country and implement full controls on goods passing between the UK and the EU. The UK is in the process of negotiating its future relationship with the EU, including seeking to reach a free trade agreement (FTA). Unlike for previous deadlines, regardless of the outcome of the negotiations there will be significant change at the border from 31 December.
Since the UK’s decision to leave the EU in 2016, the National Audit Office has reported four times on the management of the UK border, focusing primarily on the government’s preparedness for exiting the EU without a deal. We highlighted key risks around systems development, infrastructure and resourcing, and industry and trader readiness.
Content and scope of the report
As a result of the ongoing negotiations and wider political context there have been many political developments relating to EU Exit and the management of the border to which departments have had to respond since we last reported. The purpose of this report is to: set out how the government and departments have been preparing to manage the border after the end of the transition period; to set out their degree of preparedness to implement their plans; and to highlight the significant risks to the effective functioning of the border from 1 January 2021. It is based on information available up to 30 October 2020.
- In Part One we set out the background to preparations for the end of the transition period and government’s planning assumptions.
- In Part Two we report on progress with implementing the arrangements required to manage Great Britain’s (GB’s) border from 1 January 2021.
- In Part Three we report on progress with implementing the Northern Ireland Protocol for 1 January 2021.
- In Part Four we report on progress with implementing the arrangements required to manage the GB border from 1 July 2021. In this part we also consider some longer-term issues relevant to the management of the border.
While the UK has now left the EU, preparations to manage the border at the end of the transition period remain very challenging and have continued to be significantly affected by the ongoing negotiations and wider political context, and by the impact of COVID-19 on both the government’s and businesses’ ability to prepare. The end of the transition period is unlike any previous EU Exit deadline in that, regardless of the outcome of negotiations on the future relationship between the EU and the UK, things will change. The government is planning for significant change at the border from 1 January 2021. Departments have built on their no-deal planning and, although hampered by the challenges of the COVID-19 pandemic, have made progress in recent months implementing the changes required to systems, infrastructure and resources. However, significant risk remains, in particular in relation to the arrangements required to implement the Northern Ireland Protocol. The government must continue to focus its efforts on resolving the many outstanding practicalities relating to both the Great Britain and Northern Ireland operating models and developing robust contingency arrangements if these cannot be resolved in time.
It is very unlikely that all traders, industry and third parties will be ready for the end of the transition period, particularly if the EU implements its stated intention of introducing full controls at its border from 1 January 2021. The government recognises that there will be disruption and is putting in place arrangements to monitor issues as they emerge. It will need to respond quickly to try to minimise their impact. It also needs to be alert to any increased risks of smuggling or other criminal behaviour which exploits gaps or inconsistencies in border operations. There is a risk that widespread disruption could ensue at a time when government and businesses continue to deal with the effects of COVID-19.
The increasing time pressure and risks mean that the government is committing a lot of money to progress preparations in areas, such as port infrastructure and customs intermediaries, which would traditionally be provided by the private sector. The unique situation in which departments are operating makes some element of additional spending inevitable, and it is right that the government does what is appropriate to mitigate the risks. However, despite the funding being committed by government, there remains significant uncertainty about whether preparations will be complete in time, and the impact if they are not. Some of this uncertainty could have been avoided, and better preparations made, had the government addressed sooner issues such as expanding the customs intermediary market, developing a solution for roll-on, roll-off (RORO) traffic, upscaling customs systems and determining the requirements for infrastructure to enforce a new compliance regime.