'Rushed and risky' no-deal Brexit ferry contracts cost £85m

10 July 2019, 06:10 | Updated: 10 July 2019, 07:41

A report by MPs has hit out at government preparations for a no-deal Brexit, saying cancelled contracts for ferry freight capacity were "rushed and risky" and cost taxpayers £85m.

The Commons public accounts committee (PAC) said the Department for Transport (DfT) "must learn" from the episode, which took place in the months before the original 29 March deadline for the UK to leave the EU.

The DfT had arranged contracts worth more than £50m to carry essential freight and goods in the event of no deal to combat the possibility of supply disruption at UK ports.

The PAC said a legal challenge to the procurement by Eurotunnel, which was settled out of court, added £33m to the total bill.

Its report also raised serious doubts about current departmental plans in the run-up to the current EU exit date of 31 October, saying they appeared to be "waiting for clear instructions" as the Conservative leadership contest runs its course.

It said: "We acknowledge that without political certainty it is challenging, but the government needs to inject direction into departments' preparations for leaving the EU with a deal, without a deal, or any delay, as a matter of urgency."

It emerged during the procurement process that one company originally awarded work had no ships.

Labour said the ferry findings were further evidence of failure by Transport Secretary Chris Grayling - with the party renewing its call for him to resign.

Shadow transport secretary Andy McDonald said: "It is beyond belief that he should be given another opportunity to squander public cash and throw our transport networks into chaos.

"This country cannot afford Chris Grayling."

The PAC called on his department to set out in the next few weeks what it had learnt from the cancelled contracts.

A Department for Transport spokesperson said: "The freight capacity contracts were taken out as an insurance policy for the UK to ensure that key medical supplies could be guaranteed in the event of a no-deal Brexit.

"This step was in response to changed assumptions about potential delays in the Dover strait, and the agreements were entered into as soon as a cross-government collective decision was taken that they were needed.

"Two weeks ago the department outlined a new framework proposal to provide a list of operators capable of delivering this vital freight capacity without the government committing to any agreements at this stage, with market engagement
already underway."