Extra no-deal Brexit money sends a signal – but not much more

When Boris Johnson stood on the steps of Downing Street for the first time as prime minister, the Treasury officials down the road who had just waved goodbye to their boss (seen by some as the government’s “gloomster-in-chief”) were no doubt wondering how they could pivot to support the new government.

One week later, the purse strings have loosened, and the Treasury is “turbo-charging” Brexit.

The announcement of an additional £2.1 billion for no-deal preparations – around twice what Hammond had already allocated for this financial year – is a sign government is getting serious about readiness. But with 90 days to go, it is not clear it can be much more than that.

Most of the extra cash is a gesture rather than a serious plan to improve Brexit readiness for October

Just under half of the extra money is sitting in an unallocated pot. To access the cash, Whitehall departments will need to come up with spending plans and pass through the spending controls process. Even after the spending controls process was streamlined for Brexit, it was still taking weeks. Odds are that little of this money will be spent by the end of October.

It is not clear how much the £1.1 billion already allocated will help by 31 October either. Around a third is going on the border and customs. But the UK cannot recruit, train and deploy 500 new border force officers in 90 days, so either this work was already underway and it’s a non-announcement or the plan is to try and inject extra resource in the months after no deal.

It is the same story when it comes to the extra money for infrastructure at the border. Procurement alone will push most timelines beyond October.

Doubling support available to customs agents (the people who help business comply with customs procedures) is a positive step. But the chances of these – often small – businesses implementing new IT systems or hiring new staff before October looks remote. Our research into customs showed some of these businesses did not want to scale up.

The UK passport office must be relieved it has been given a boost after their website crashed in the run up to March when panicked Brits tried to renew their passports to have the necessary six-months validity for EU travel after Brexit. 

The extra cash also shows the cost of Brexit delay is close to half a billion

The second largest tranche of cash that has been allocated is on the continuity of vital medicines and medical products. But most of this money is going on things that the UK had already done in March and now needs to do again as a result of delay: buying freight capacity, warehousing space and stockpiling goods.

Of the £434 million announced this week, the government had already announced around £300 million for new ferry capacity to replace the contracts that were in place for March and April. The new secretary of state at the Department for Transport, Grant Shapps, will hope he doesn’t suffer a ferry fiasco like his predecessor.

The additional warehousing and replacing stocks will again be replicating what was done in March. But this time officials will find it harder to get the warehousing space they need, with lots likely to be booked up for Christmas.

Extra money for communications and business support could have biggest impact

Branding the new Brexit information campaign "the biggest communications campaign since the Second World War" is meant to elicit fear or confidence. But to be successful, the £138 million must do both.

Business readiness was one of the biggest issues for the UK government in the run up to March. Improving that – and convincing business this isn’t another example of government crying wolf – will be the biggest challenge for a government serious about readiness. And the tone of the campaign will be scrutinised if it strays beyond straight facts.

The government must also recognise that businesses are being asked to splash cash to improve the UK’s negotiating position. Offering financial incentives or support will be important to persuade the thousands of businesses with plenty else to worry about that getting ready for no deal will be worth it.

The £100-million fund will be welcomed by business groups who’ve been explaining this to government for some time. But we don’t know what they plan to spend the new money on. The Dutch and Irish have been offering support, for example in the form of vouchers, for some time already.

Government must answer why this is value for money now if it wasn’t in March

Labour has already fired a warning shot at permanent secretaries who, as departmental accounting officers, will be required to sign off Brexit readiness spending. Preparing for no deal does not per se require a 'direction' – it's the policy of the government of the day – and the civil service is honour bound to serve that government. 

But permanent secretaries should be asking searching questions before they spend any money which is not delivering real improvements to UK capability to deal with no deal and offer only symbolic value; they need also to question any spend where delay is both manageable and makes effective delivery more feasible.  

And every permanent secretary, however gung-ho their minister is now (and however light touch the Treasury decides to become) will want to make sure that they fulfil their accounting officer responsibilities before they sign off any no deal spend.