Limited data on government’s £4.4bn Brexit spend

Government departments spent at least £4.4bn on preparing for the UK’s exit from the EU, but Treasury data showed only a limited picture of overall Brexit spending and little information was put in the public domain, the National Audit Office (NAO) has found

The audit watchdog said that by 31 January 2020, departments had spent at least £4.4bn of the £6.3bn made available, with six departments accounting for more than 70% of all identified spending.

Three departments – the Department for Environment, Food and Rural Affairs, the Home Office and HMRC – have collectively spent more than half of government’s total EU Exit spending, at around £2.4bn.

Of the total money spent, £1.9bn was on staffing costs; £288m on expertise and external advice; and £1.5bn on activities such as building new systems and infrastructure.

Overall spending was broadly in line with funding in 2016-17, 2017-18 and 2018-19. Departments reported spending £1bn less up to 31 January 2020 than their allocation for the 2019-20 financial year.

The NAO said departments may spend additional amounts in February and March on EU Exit-related activities. The Treasury made £2bn of additional funding available to departments in 2019-20 specifically for no deal preparations. When the prospect of no deal diminished, spending was scaled down.

Some departments have had to supplement their Brexit allocations from existing departmental budgets. Eleven of the eighteen central government departments spent more than their allocation in 2017-18 and twelve in 2018-19.

Departments estimate that £301m of expenditure on EU Exit preparations was funded from existing departmental budgets.

Over 22,000 staff were working on EU Exit at the peak in October 2019. This included more than 1,500 people who were moved within government to prepare for a possible no deal exit.

Since June 2016, departments spent at least £288m on expertise and external advice and at least £1.5bn on activities such as building new systems, advertising and other services.

Departments have already reported to parliament £92m in specific EU Exit costs which have been defined as losses. This includes the Department for Transport’s payments of £50m to ferry companies and £33m to Eurotunnel.

The NAO found Treasury data provided a limited picture of cross-government EU Exit spend. In 2018-19, the Treasury first asked departments to provide supplementary reporting on specific areas of Brexit spend.

The audit watchdog said the type of data provided was not consistent across departments, meaning it was not possible for the Treasury to compile total figures across government.

While the Treasury has publicly announced the additional funding allocations it has given to departments, little information has been made public by government on how departments have actually spent these funds.

For example, most departments did not set out how much they spent in total on EU Exit during the year; specific elements of EU Exit spending (for example, individual projects); or the number of staff they had working on EU Exit, either in total or specifically for intensive preparations for a possible no deal exit.

Gareth Davies, the head of the NAO, said: ‘In preparing for EU Exit, government departments planned for multiple potential outcomes, with shifting timetables and uncertainty.

‘This report provides, for the first time, a clear picture of how much government has spent and what that money has been spent on.

‘Producing this report has highlighted limitations in how government monitored spending on EU Exit specifically, and cross-government programmes more generally. Our previous work has recommended that government continues to improve the way it plans and allocates money, linking spending to objectives.’

The cost of EU Exit preparations report

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