15 November 2016

A leaked memo has highlighted some fundamental issues about how Whitehall is working to deliver Brexit. Joe Owen says the real proof of the Government’s ability to manage Brexit will be in the Autumn Statement.

The Institute for Government spent the last month talking to departments across Whitehall, including the Department for Exiting the European Union (DExEU), and key external organisations who are trying to get their voice heard by the Government. So while we may not recognise the numbers in this memo, we recognise some of the claims.

Here’s what we agree with:

1. Whitehall needs more resources

Whitehall has most of the technical skills required to deliver Brexit. Departments like Defra, BEIS, and HM Treasury have been negotiating with the EU for 40 years on specific issues, so it’s misleading to talk of a ‘lack of trade negotiators’, as some commentators have. The skills most in demand are core to the Civil Service – policy and legislation.

What Whitehall does not have is the capacity to deliver Brexit on top of everything else to which it is already committed. The work required to deliver Brexit has been described to us as an existential threat to how some departments operate. Managing this whilst continuing to deliver existing priorities with the smallest Civil Service in decades is unsustainable.

Departments like Defra are in the middle of a transformation programme that was ambitious before Brexit came along – achieving a 25% cut to resource budgets over the next five years must now be considered undeliverable.

There are departments upon which Brexit will have a huge impact. We hope the Autumn Statement will show the commitments the Government intends to keep, and what it will drop, so resources can be focused on the Brexit task.

2. No one is planning far ahead enough

There is a huge amount of work already underway, in both DExEU and the rest of Whitehall, but the lack of publicly visible direction and secretive approach at the top means much of it is too reactive. The planning horizon is days or weeks in most departments, not months.

Those leading Brexit in departments know little more than the general public – an Article 50 trigger some time by March 2017 and a two-year negotiating window. There is no understanding of what the process of reaching a negotiating position looks like or even the criteria required to get there, even on specific issues, which make departmental planning of activity and analysis very difficult.

What happens in the New Year? We can only guess. And most of Whitehall feels the same.

3. Brexit planning appears ‘chaotic and dysfunctional’

The Nissan deal was one of the biggest signals of intent from a government that has been tight-lipped on priorities and has given little in the way of assurances.

In some quarters it was met with confidence – the Government was willing to be pragmatic and make deals – in others it caused confusion and frustration as the detail of assurances was not made public.

While government engagement with external organisations is certainly not lacking in quantity, it is lacking in quality – Nissan represents a breakthrough (at least for Nissan). We have heard that government is asking the same questions too often and failing to reflect any change of approach as a result of the answers given. From the outside, we are told, the process appears chaotic and dysfunctional.

Brexit has caused significant uncertainty for businesses and departments, and in the absence of certainty there is a need for confidence and clarity about the process. The current political approach and the absence of a clear overarching plan for exiting the EU means there is neither.

4. Silence is not a strategy

The public justification for the Government’s silence is that sharing too much information would risk ‘undermining the UK’s negotiating position’ and having a negative impact on the outcome of the talks. The political reality is that, with a slim majority and a need to satisfy ‘Remainers’ and ‘Leavers’ in her own party (as well as across the country), the more the Prime Minister reveals the more difficult her job of party political management becomes.

But silence is not a strategy. Failure to reveal the Government’s plan to reach a negotiating position is eroding confidence among business and investors, and encouraging unhelpful speculation about what the final destination might be.

That silence also means there is no public discussion of the impressive work being done across government in a very complex and pressurised environment. DExEU has gone from zero to more than 400 people in four months, and departments are grappling with the impact of Brexit in their areas while continuing to deliver existing (sometimes very significant) commitments – all with a Civil Service 19% smaller than in 2010. There is a lot to be positive about in relation to the work done to date, but the scale of the task is unprecedented.

For now, we’re waiting for the Autumn Statement.

Further information

Our full report in to how Whitehall is preparing for and manging Brexit will be out in early December.

Comments

It is not surprising that senior civil servants who wished to remain in the EU are painting as gloomy a picture as possible -- to the detriment of the pound! To suggest at this very early stage in a new government that they have no plan is ridiculous. The plan is to leave the EU. How that will proceed and the effect on the country will not be know for at least another five years. Equally, the effect on the country of remaining in the EU is also unknown -- and any 'plans' which this country might have had for how the EU might develop have largely been ignored.

Exactly. Scandalous reporting of that memo too, giving consultants a credence far beyond what they deserve

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