The DfT has been lambasted by the Public Accounts Committee (PAC) for failing to ensure sufficient cross-channel freight capacity in the event of a no-deal Brexit.
In a report published today (12 March), the committee reveals that, despite repeated warnings from the PAC, the DfT failed to take action to boost freight capacity until late last autumn.
The DfT's decision to act was partly prompted by updated government research, published in the autumn, which revealed that a no-deal Brexit could result in an 87% cut in the flow of goods across the channel and the potential for six months of disruption, the report says.
Until that point, the DfT had been relying largely on a tactic that involved buying up ferry tickets. "Its aim was to stimulate ferry operators into running additional services on routes away from the short channel crossings by purchasing tickets on those services," the report reveals.
The ferry operators failed to respond to this tactic, the report says.
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This combined with the updated government research on the impact of no deal, and concerns EU member states were not making sufficient preparations for a no-deal Brexit, finally prompted DfT to launch a “rushed and risky” procurement process late last year to provide additional freight capacity.
The procurement resulted in the DfT receiving just three bids from DFDS, Brittany Ferries and start-up Seaborne Freight, which it later emerged had no shipping partner.
The secretive nature of the procurement process prompted Eurotunnel to take legal action against the DfT, forcing it to come to a £33m settlement.
Shortly after, the financial backers of Seaborne Freight pulled out of the contract, leaving just two ferry companies to provide additional freight capacity, which according to the report amounts to just 7% of the 25% of additional freight capacity needed.
Rushed and risky
The report concludes: “The DfT has failed to make timely preparations to procure the additional freight capacity needed to transport critical goods.
"Despite being aware that the ferry industry would need time to put in place additional capacity, the department did not start serious preparations to procure this additional capacity until September 2018, just six months before the UK is due to leave the EU.
“The DfT’s procurement approach has been rushed and risky and preparations have been conducted in secrecy with inadequate stakeholder engagement.
"Our inquiry has thrown up that the department did not have any written assurance that Seaborne Freight had a shipping partner until after the contract was agreed and then signed.
“The DfT has been also over-optimistic about how much capacity it could secure and has ultimately failed to deliver the freight capacity it required. This was in part because of the late decision to procure the capacity and the unusual and secretive approach to procurement.”
“Time has now run out to procure significant additional capacity by other means. This has implications for securing the flow of priority goods,” the report warns.
False optimism
It also warns that Defra’s assertion that the lack of freight capacity will not lead to food shortages, “is another example of over-optimism” and adds that both DfT and Defra are not “sufficiently taking into account the potential behaviour of the public in such a scenario”.
The report also raises concerns about Operation Brock, which the DfT told the committee “remains challenging to deliver in time,” and warns that “any significant displacement of traffic away from Dover could have a proportionately larger impact on the smaller ports it would move to”.
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