NAO highlights DEFRA stretched on Brexit

The National Audit Office shone a light on the scale of the challenge DEFRA faces in playing its part in Brexit in a report published just before Christmas. The Department is one of the most affected by EU exit with almost all of its areas of responsibility framed by EU legislation.

In terms of the scale of the challenge, the NAO found:

• Defra received income of £3.3 billion in 2016-17 from the EU, mostly to reimburse direct payments made to farmers under the Common Agricultural Policy. Exiting the EU means Defra must take on greater responsibility for future funding in a range of policy areas (including agriculture and fisheries). It must also develop alternative regulatory arrangements to replace those currently carried out by EU institutions.

• Defra is currently responsible for 43 of the 313 EU-related work streams identified

• across government – the second highest of any department. These vary in scope and scale from rewording existing EU guidance to establishing new domestic regulatory regimes.

• Almost half (20) of Defra’s work streams have an IT element. Many of these IT components are still being scoped, and could range from minor updates to entirely new systems.

• Approximately 80% of Defra’s areas of responsibility are currently framed by EU legislation and 25% of EU laws apply to its sectors. It has an extensive legislative programme to prepare for EU Exit – primary legislation on agriculture and fisheries, and an estimated 95 statutory instruments to successfully convert existing EU law into UK law at the point of exit. This is in addition to any further ‘business as usual’ statutory instruments that may be needed.

• Defra’s legislative programme is vulnerable to risks, such as delays to the negotiations and competing demands across government, that are outside its control and could affect its ability to deliver a successful exit.

• Alongside planning and delivery for EU Exit, Defra must also accommodate budget cuts of £147 million during 2017-18 and 2018-19 plus further spending reductions as a result of new policy choices and other budgetary pressures.

In terms of how DEFRA has so far approached the challenge, the NAO found the Department has:

• Organised its EU Exit programme into five policy streams (fisheries; environmental regulation; future of farming; animal and plant health; and food), three cross-cutting themes (negotiation, legislation and devolution) and seven enabling functions including IT, communications and commercial and procurement.

• Developed high-level critical paths for all of its work streams with detailed project plans for its six highest priority work streams. The plans prepare for two possible EU exit scenarios – a negotiated outcome and a ‘no deal’ outcome – and DEFRA is also exploring the implications of a possible transition period.

• Agreed spending of £94.4 million with HM Treasury to fund its EU exit programme in 2017-18 but funding for 2018-19 is yet to be agreed.

• Agreed proposals for prioritising its ICT portfolio to enable the delivery of EU Exit and is starting to systematically review its workload across EU exit and business as usual to establish which areas of work can be stopped, slowed down or reduced in scope.

• Filled 650 vacancies to meet the additional requirements of Brexit with a further 150 staff appointed but not yet in post. However, it has approximately 400 further full-time equivalent vacancies to fill by the end of March 2018 taking its total requirement for 2017-18 to 1,200. Recruitment is expected to become more challenging as competition for skilled staff increases across government and the private sector.

• Identified a need for approximately 150 additional programme and project management staff to support the EU Exit programme.

• Engaged with other government departments to co-ordinate preparations and engaged with its arm’s-length bodies, the devolved administrations and stakeholder groups.

DEFRA listed “a smooth and orderly exit from the EU” as its number one objective when it published its single departmental plan on 14 December. Its other objectives were: a cleaner, healthier environment, benefiting people and the economy, which in water terms meant to “ensure cleaner water and sustainable usage; and enhance resilience of businesses and individuals to drought and loss of water supply”; a world leading food and farming industry; a rural economy that works for everyone, contributing to national productivity, prosperity and wellbeing; an a nation better protected against floods, animal and plant diseases and other hazards, with strong response and recovery capabilities.