BEIS: PAC raises "grave concerns" over department's approach to brexit

REPORT SUMMARY

Given the scale of the Brexit task facing the Department for Business, Energy & Industrial Strategy and its significant domestic policy agenda, we are alarmed that the Department has made virtually no attempt to re-order its priorities.

It is crucial that it recognises the importance of doing so, particularly as it moves from Brexit planning to implementation where the task is even greater.

The Department has recruited nearly 90% of the staff it needs to carry out its Brexit work in 2017-18 but we are concerned that the mix of staff it has recruited so far lacks the required level of experience and expertise to deliver a very challenging programme of work at pace.  

As we reported in February 2018, the paucity of information in the public domain about what departments are doing to prepare for Brexit is undermining scrutiny of progress and we expect our Committee, Parliament and the public to be kept meaningfully informed on what progress is being made, and at what cost. The Department is a case in point. 

COMMENT FROM PAC CHAIR MEG HILLIER MP

“The Department for Business, Energy & Industrial Strategy appears to be operating in a parallel universe where urgency is an abstract concept with no bearing on the Brexit process.

“The Department is responsible for around a fifth of the work streams the Government must complete as the UK leaves the EU. It is an extremely important, challenging and time-sensitive workload.

“Yet the Department told us it had not re-prioritised its overall programme of work, had not begun procurement for around a dozen essential digital systems and could not provide vital information about its workforce.

“We have grave concerns about this apparent complacency, compounded by the lack of transparency on the Department’s progress with what in some cases will be critical projects.

“Sensitivities around negotiations with the EU must not be used as an excuse to keep taxpayers and Parliament in the dark. We urge the Government to provide us with a swift update on the issues raised in our report.”

CONCLUSIONS AND RECOMMENDATIONS

The Department conveyed no clear sense of the need or urgency to re-prioritise its overall programme of work. We reported in February 2018 that departments across government have yet to face up to the need to re-prioritise existing activity to make space for Brexit work. Our concern is reinforced by hearing that the Department has not taken steps to re-prioritise its work – despite it now being responsible for 68 of the 300-plus work streams that departments need to complete. The Department’s Brexit workload will only increase as it moves from planning to implementation, but the Department insists that there is very little of its workload it can stop or postpone, and that it expects to deliver all of the policies that fall within its remit. 

Recommendation: The Department should look again at its priorities for ‘business as usual’ and its Brexit portfolio to reassess which programmes could be stopped, paused or slowed down, taking into account its capacity and skills. It should update us within 2 months confirming that it has done so and what has changed as a result. 

We doubt the realism of the Department’s plans to deliver the numerous IT systems required to support the implementation of its Brexit work streams, especially when it has yet to start procurement. The Department needs to build upwards of 12 new digital systems, such as a database to register trademarks. We took evidence in January 2018, before publication of the Draft Withdrawal Agreement proposing a transition period to December 2020. Extraordinarily, the Department had not yet started to procure any of these systems despite them being required by March 2019 in the event of a ‘no deal’ scenario. They may still be required if negotiations should break down. The Department said it hoped to begin procurement in the next few months and that it was confident that it could acquire and test the systems by March 2019. Given the government’s generally poor track record in delivering IT projects, we are extremely sceptical that the Department will be able to deliver these systems in time. The Department has been relying too heavily on a transition period for the UK’s departure if it is to properly test the new IT systems. The Department may prove to have been lucky with the Draft Agreement now including a transition period. But we are concerned that, given the number of IT systems involved and the Department’s other competing demands, these procurements may prematurely slip down its list of priorities.

Recommendation: The Department should take the necessary steps to get procurement and testing of its IT projects back on track. It should set out what it has done in its update to us in 2 months.

The Department has recruited more staff to undertake the work needed for Brexit, but we are not convinced it has yet got the right mix of skills and experience in place to implement its Brexit work effectively. It cannot even explain the skills in its existing workforce. The Department says it is on track to recruit the staff it needs to deliver its Brexit work in 2017-18, having recruited, up to December 2017, 305 of the 350 full-time equivalent staff it requires. The Department was unable to tell us vital information about its workforce, such as the breakdown of experienced staff compared to new recruits, the skills it has recruited so far, or the skills it is finding more difficult to recruit. We were not reassured that the Department has recruited people with the sufficient negotiating expertise or is providing adequate training to strengthen these skills. The Department was unable to specify how many more staff it will need to recruit for its Brexit work in 2018-19, because it had not yet agreed with HM Treasury what additional funding it would receive for 2018-19. There will be challenges ahead for the Department in recruiting specialist skills in areas such as digital, where demand outstrips supply and where it will be competing with other public and private sector employers for the same set of skills.

Recommendation: The Department should set out how the skills and experience of the staff it recruited in 2017-18 met its needs, identify any gaps, and set out the number, skills and experience of those it needs to recruit in 2018-19. It should update us accordingly in 2 months.

The Department’s Brexit task is significant and complex, but the lack of transparency over its activities undermines proper scrutiny of the progress and pace of its Brexit work.Many of the Department’s 68 Brexit work streams are very complex and it will require significant time to implement the new policies and structures required. We reported in February 2018 that we expected much greater transparency from the Department for Exiting the European Union (DExEU) on the over 300 Brexit-related work streams and on the progress that is being made. Similarly, there is a lack of information on the Department’s 68 work streams, including which of them are considered critical and whether projects are being delivered in line with expectations. We reiterate here that sensitivities around negotiations with the EU should not be used as an excuse for keeping the public and Parliament in the dark.

Recommendation: Given how BEIS has one of the most significant and important workloads of any department with 68 workstreams, including 21 priority ones, it is imperative that it should set out, in its update to us in 2 months’ time, the full details of progress with these work streams, including current risks ratings and progress against high-level milestones.

We are not confident that existing cross-department processes for preparing secondary legislation for Brexit will be able to cope with the volume required in the short timescale available. To implement its Brexit-related work, the Department needs to pass around 150 statutory instruments through Parliament. In addition, as negotiations progress, the situation is likely to change rapidly and require decisions to be made at speed.  The Department says its programme of legislation is achievable, provided it has good cooperation from other parts of government. The Department agreed however that the current processes to consult with other government departments to gain consensus will need to be reviewed to ensure they are agile enough to keep up with the pace of work. The Department’s 150 statutory instruments will be just the tip of the iceberg compared to government as a whole. Without new ways of working, current processes are likely to hinder the pace at which all government departments are able to deliver.    

Recommendation: The Cabinet Office, working with the Department for Exiting the EU, should carry out an urgent review of the planned processes in place, including a timeline to develop draft legislation. These departments should write to us with the results of the review by the end of May 2018.