Six of the eight border IT systems viewed as critical for a no-deal Brexit are at risk of failure, compounded by their reliance on each other and the fact delivery partners aren't ready.
The latest damning assessment* of the UK's preparedness for a sudden no-deal departure from the European Union comes from the National Audit Office (NAO), in a report (PDF) sent to the Public Accounts Committee.
The two groups have been tracking the government's prep for border control in the event of no deal, the bulk of which lands at the feet of UK taxman HMRC and the environment and food department Defra.
The report, prepared before Prime Minister Theresa May said she would allow Parliament to vote on a possible delay, treats 29 March 2019 as Brexit day – but it is clear some of the issues won't be resolved by a delay of just weeks.
The NAO said that six of the eight IT systems ranked as most critical for no deal by the cross-government Border Delivery Group are "at risk of not being delivered to time and to acceptable quality".
These include Defra's Import of Products, Animals, Food and Feed System (IPAFFS) and Automatic Licence Verification System (ALVS), both of which have their IT components listed as amber-red, and HMRC's CHIEF (Customs Handling of Import and Export Freight), which is ranked as amber.
UK taxman outlines its CHIEF concerns for customs IT systemsREAD MORE
There are also "significant risks" related to the processes for embedding these systems, including the need to ensure traders and other delivery partners are ready to use the systems.
These risks are compounded by the fact many of these systems rely on each other – for instance, IPAFFS must not only be able to identify and record results of biosecurity checks and assessment customs, it also has to share these, through ALVS, with CHIEF.
On top of this are concerns that delivery partners aren't ready, there are questions over contract renewal that need to be answered within the month and the fact that traders are still massively unprepared.
HMRC has long planned to replace the outdated CHIEF system with a new Customs Declaration System (CDS), but faced with Brexit uncertainty and pressures elsewhere, the department admitted it would have to run both in parallel.
However, the NAO report reveals that HMRC has given up on this idea entirely, "because of delays with CDS and concerns from key users including software developers". Instead, CHIEF will be the primary system in the event of no deal.
This means the department doesn't have to complete the migration of traders to CDS by day one – which is useful, since HMRC has missed a number of milestones, including plans to migrate 25 high-volume traders by the end of 2018. To date, just four have switched over, with the rest due by mid-April.
Meanwhile, HMRC has finished scaling up CHIEF to manage an additional 260 million customs declarations a year – currently it handles 55 million – with tests having been completed last month, about six months later than its June 2018 estimate.
However, the NAO pointed out that work with delivery partners poses a risk to the project. HMRC only offered up advice to software providers towards the end of last year, and is working with BT and Community System Providers (CSPs) to upgrade the network links into CHIEF.
However, CSPs have "expressed concerns" they won't have the capacity to handle all the changes needed for no deal while maintaining systems for existing activity, and developers have said they might not be able to deliver all the changes required on CHIEF by 29 March.
On top of this, HMRC has only one month to go before it has to decide whether to extend its contract with Fujitsu for continued support for CHIEF. At the moment it is due to run out in March 2020 and HMRC has to give 12 months' notice to renew the contract.
"During this time, it also needs to consider how long it intends to continue to operate CHIEF after the UK leaves the EU," the NAO said. "No decision has yet been made on this."
Dear God, this parachute is a knapsack!
More broadly, there are concerns the contingency plans intended to save the government's bacon in one area don't actually work with the other systems, or the contingency plans that it is likely to have to rely on.
The Tariff Application Platform – which will replace the EU TARIC system for transferring info to HMRC about tariffs – depends on policy decisions and the availability of CHIEF to receive data from TAP.
"The tariff application is already connected to CDS and testing of the system is underway. However, there is no digital connection between TAP and CHIEF," the NAO said.
Among the risk mitigation measures the Department for International Trade and HMRC have put in place is manual entry of tariff data into a testing environment within CHIEF to facilitate implementation on "day one".
If any policy decisions or changes to trade agreements affect TAP data, these will all need to be entered into CHIEF, which the NAO observed "will require a lead-in time".
UK.gov's no-deal plans leave HMRC customs, VAT systems scrambling to keep upREAD MORE
Similarly, a contingency solution that Defra is developing in case its IPAFFS system, which is rated amber-red, isn't ready in time, doesn't link to CHIEF via the ALVS. Because of this risk, the ALVS was last month downgraded from amber to amber-red.
According to the NAO, Defra and HMRC had said they had agreed on a solution that would not require customs clearances to have inputs on biosecurity and food safety checks – but this "could lead to a small increase in biosecurity and food safety risk at the border".
In addition to concerns about the government's systems, there are worries about traders' readiness, which the NAO said "continues to be one of the most significant risks to the operation of the border in the event of no deal".
The government has announced some easements and simplified procedures, but the NAO said there was "very little time" left. The report made mention of a December 2018 survey that found 50 per cent of small businesses were yet to take action to prepare for no deal.
The Public Accounts Committee is holding an evidence session with HMRC execs next week to probe its progress with IT systems for Brexit and on the CDS. ®
For those who don't want to read the full article, a Reg reader eloquently summarised another Brexit preparedness article by your correspondent, which is equally relevant now.
a reader summarises my efforts writing about the brexit withdrawal bill pic.twitter.com/UffCPcGYfx— Beki Hill (@BekiHill) November 15, 2018
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