Watchdog warns of ‘real risk’ of repeat to no-deal Brexit ferry fiasco
The government could waste even more taxpayer money due to its lack of preparation for a no-deal Brexit, a top watchdog has warned, after the Department for Transport (DfT) blew £85m on botched ferry contracts.
The DfT’s lack of preparation risks cornering the government into further high-risk procurement contracts, parliament’s Public Accounts Committee (PAC) said today.
Read more: P&O sues government over £33m Eurotunnel settlement
The committee criticised the DfT’s procurement of additional ferry capacity at the end of last year as “rushed and risky”, saying it opened the door to a legal challenge from Eurotunnel, which argued that it had been excluded from bidding for the contract. It then reached a £33m out-of-court settlement with the government in March.
Transport secretary Chris Grayling came under significant fire when it was revealed that his department had awarded a £13m contract to Seaborne Freight, a firm that owned no ships and had never run a ferry service before. The government later cancelled the contract, along with two others that it had secured with Brittany Ferries and DFDS.
With the cost of cancelling the contracts coming to £51.4m, and on top of the £33m Eurotunnel settlement, taxpayers have footed a bill of £85m, the PAC said.
The watchdog warned: “There is a real risk that the short time left before 31 October will force the department into further high- risk procurements, which it wants to avoid,” it said. “Given the lead time needed to put ferry capacity in place, which the department says can take a minimum of three months, any new procurement process would need to begin very soon.”
The PAC said the Eurotunnel settlement, which would include improvements to the terminal, amounted to “little more than window dressing” because the company said it would have made such a commitment irrespective of the DfT agreement.
Labour’s shadow transport secretary Andy McDonald said: “This report exposes the government’s shambolic no-Deal Brexit preparations. The transport secretary’s incompetence has already cost taxpayers tens of millions of pounds. 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.”
Read more: Government cancels no-deal Brexit ferry contracts at £50m cost to taxpayer
A DfT 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.
“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.”