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Government should learn lessons from Brexit, says NAO

National Audit Office report finds government did not plan adequately for Brexit and needs to be better prepared to deal with uncertainty and improve communication, engagement and planning

The government failed to plan adequately for its exit from the European Union, and could learn lessons from its approach, according to the National Audit Office (NAO).

An NAO report found that Brexit was a huge cross-government effort, with extensive mapping, fast-tracked business cases and creative solutions, but there is still a lot of work to do.

It said the volume of work required for Brexit was “significant” and demands and deadlines changed constantly.

“The external deadlines imposed by EU Exit pushed government into unusually compressed timetables, affecting both internal processes but also the time available to design and carry out major projects such as building new IT systems,” the report said.

It added that departments worked “faster than usual and took pragmatic decisions to get things ready in the time they had, and to prioritise what was really necessary”. This included work on HM Revenue and Customs’ (HMRC) new Customs Declaration Service (CDS), which has run significantly behind schedule and was not ready by the time the UK exited the EU.

The reason for the delay is that software developers at HMRC have had to focus on the old Customs Handling of Import and Export Freight (Chief) rather than the new system.

Chief, which has been in place for 27 years, was originally only able to handle 60 million customs declarations per year, and had to be upgraded to ensure it could cope as a contingency post-Brexit.

An HMRC spokesperson told Computer Weekly in May 2020 that the department had extended the migration timelines for moving from Chief to CDS, and both systems would be run in parallel for longer than was originally planned.

“In the event that its new customs system was not ready in time, HMRC accelerated work to scale up its existing Chief system as a contingency,” said the NAO report.

It also criticised the government for the secrecy surrounding its plans, which ended up affecting cross-government communication. “The Department for Exiting the European Union (DExEU) kept a tight hold on communications, keeping secret anything that might pertain to the UK’s negotiating position,” it said.

“This not only governed its communication with third parties, but also characterised how DExEU worked with departments and encouraged departments to work with each other.”

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The NAO report also found that the government response to Brexit was “policy-driven”. It warned the government in 2017 that it needed to move to implementation of the projects that needed to deliver the infrastructure and systems required to be ready for Brexit.

“There were clear implementation challenges: the short timelines (and fixed delivery date); the complexity of the work, particularly the interdependency of IT systems at the border; and the breadth and scale of the work required across the whole of government,” the report said.

It added that “a lot of effort was put in late in the day to improve readiness and put contingencies in place”.

“However, given the limited time before the expected date of exit, this effort was not sufficient to overcome earlier delays,” it said. “As a result, many key systems were not expected to be ready for day one of EU Exit. This problem continued even as extensions to Article 50 provided more time to prepare.”

Commenting on the report, NAO head Gareth Davies said that preparing for Brexit continues to be a “highly complex and challenging task for government and stakeholders”.

He added: “Our work draws out the learning from government’s experience to help it improve its approach, by planning for multiple outcomes ahead of time, ensuring clear oversight structures, collaborating more effectively, and ensuring strong financial management is built in from the start.

“Government can draw on this learning in preparing for the end of the transition period and beyond, and in managing other cross-government challenges, including its response to Covid-19 and net zero [emissions].”

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