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Brexit burden 'unsustainable unless Chancellor commits more resources'

Published 15/11/2016

Prime Minister Theresa May has been accused of having no Brexit plan
Prime Minister Theresa May has been accused of having no Brexit plan

The burden of preparing for Brexit will be "unsustainable" for some Government departments unless Chancellor Philip Hammond uses next week's Autumn Statement to commit more resources to the task, a respected thinktank has warned.

The Institute for Government, which has been talking to key figures inside and outside Whitehall ahead of a report next month, said it had been told that Brexit represented an "existential threat" to the operation of departments whose budgets and staffing have been sharply reduced in recent years.

A "secretive approach" at the top of Theresa May's administration was causing "significant uncertainty" for Whitehall departments and preventing civil servants from planning far enough ahead. To some outsiders, the process appears "chaotic and dysfunctional", said the thinktank, which warned the Prime Minister: "Silence is not a strategy".

The warning came amid a furious row over a memo from accountants Deloitte, which claimed that Cabinet splits were delaying the Government's ability to agree a Brexit negotiating strategy ahead of the March 2017 deadline set by Mrs May for the start of withdrawal talks under Article 50 of the EU treaties.

The Deloitte paper, which was obtained by The Times, said there were "well over 500 projects" being undertaken by Whitehall departments, but a "Government plan for Brexit" was as much as six months away. As many as 30,000 extra civil servants could be needed to deliver EU withdrawal, it estimated.

Downing Street dismissed the Deloitte report as having "no credence", insisting that it was not commissioned by the Government and had not been seen by the Prime Minister. Mrs May's official spokeswoman said it appeared to be a pitch for work from the Government.

A Government spokesman said: "This unsolicited document has nothing to do with the Government at all. It was produced by an individual from an external accountancy firm. It has no authority and we don't recognise any of the claims it makes. We are getting on with the job of delivering Brexit and making a success of it."

A Deloitte spokesman later said: "This was a note intended primarily for internal audiences. It was not commissioned by the Cabinet Office, nor any other Government department, and represents a view of the task facing Whitehall. This work was conducted without access to Number 10 or input from any other Government departments."

But the IFG's Joe Owen said that, while he may not recognise all of the accountancy firm's figures, some of its claims did chime with the thinktank's findings.

"Whitehall has most of the technical skills required to deliver Brexit," said Mr Owen, in a blog on the IFG website. " 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."

Budget cuts of up to 25% expected from some departments over the coming five years "must now be considered undeliverable", said Mr Owen.

"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."

Mr Owen said civil servants in charge of departmental responses to Brexit knew "little more than the general public" about Mrs May's plans.

"There is a huge amount of work already under way, in both the Department for Exiting the EU 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," he said. "The planning horizon is days or weeks in most departments, not months."

And he added: "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."

While accepting that going public on her Brexit plans would create "party political management" problems for the PM, Mr Owen warned: "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."

The FDA union for senior civil servants warned that ministers appeared to be hoping to implement Brexit "on the cheap".

"Whilst politicians squabble about hard and soft Brexit, there is a deafening silence from ministers over whether any additional resources will be provided to deliver this momentous task," said FDA chairman Dave Penman.

"Brexit on the cheap appears to be the Government's preferred approach, but this will satisfy no-one. Next week's Autumn Statement is the Government's opportunity to outline how it will provide the resources the civil service needs to ensure a successful Brexit."

Responding to the Deloitte document, shadow Brexit secretary Sir Keir Starmer said: "Whatever the purpose of this memo, it is absolutely right about two things. First, the Government are in a mess over Brexit and do not have a plan.

"Second, the way Theresa May is handling this process shows that, just like her predecessor, she is putting the interests of her party before those of her country."

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