The National Audit Office (NAO) said on Friday that, although government departments have made progress in recent months implementing the changes required to systems, infrastructure and resources to manage the United Kingdom border at the end of the post-EU exit transition period, it was still likely widespread disruption would occur from 1 January 2021.

Earlier today, Logistics UK (formerly the MTA) warned a no deal Brexit would add more than GBP240m (US$311m) to the industry’s annual bills, with the imposition of WTO tariffs on new vehicles, parts and equipment.

In its fourth report assessing government’s preparations at the border, the NAO said planning for 1 January 2021 had built on work done for previous EU exit deadlines but COVID-19 had exacerbated delays in government’s preparations and significant risks remained, particularly in relation to implementing the Northern Ireland Protocol and trader readiness more generally.

“Departments have made progress towards implementing the systems, infrastructure and resources required to operate the border in relation to Great Britain at 2minimum operating capability’ by 1 January 2021 and are reasonably confident most will be ready, but timetables are tight,” the NAO said.

“The ability for traders to move goods under transit arrangements is a key element of the government’s plans but some elements will be challenging to deliver in their entirety. HMRC currently estimates that there will be around 6.3m movements of goods under transit arrangements in the year following the end of the transition period. If all the planned arrangements are not ready, this could have an impact on the ease with which traders can import and export goods.”

The report added there was little time for ports and other third parties to integrate their systems and processes with new or changed government systems, and contingency plans might need to be invoked for some elements.

“In part as a result of the delays caused by COVID-19, there is limited time to test individual elements and resolve any emerging issues; ensure elements operate together; familiarise users with them in advance and little or no contingency time in the event of any delays.

“Even if government makes further progress with its preparations, there is still likely to be significant disruption at the border from 1 January 2021 as traders will be unprepared for new EU border controls which will require additional administration and checks. The government’s latest reasonable worst-case planning assumptions, from September 2020, are that 40% to 70% per cent of hauliers will not be ready for these new controls and up to 7,000 lorries may need to queue at the approach to the short channel crossings, such as Dover to Calais.

“The government’s plan for reducing the risk of disruption at the approach to the short channel crossings is still developing, with various issues yet to be resolved. It intends to launch a new GOV.UK web service called ‘Check an HGV is ready to cross the border’ for hauliers to check and self-declare that they have the correct documentation for EU import controls before travelling and obtain permits to drive on prescribed roads in Kent. However, there is more to do on how ‘Check an HGV’ will be enforced and how it will work together with traffic management plans for Kent.”

The NAO said the government was preparing civil contingency plans, such as to ensure continuity of the supply of critical goods and medicines in the event of disruption to supply chains while, on 13 October 2020, the Department for Transport announced it had awarded contracts to provide additional freight capacity for over 3,000 lorries a week on routes avoiding the short channel crossings. However, COVID-19 was making civil contingency plans more difficult to enact, with local authorities, industry and supply chains already under additional strain.

Government will also need to implement the Northern Ireland Protocol from 1 January 2021. However, due to the scale and complexity of the changes, the lack of time and the impact of ongoing negotiations, there was a very high risk it may not be implemented in time.

The NAO added: “The government is spending significant sums of money preparing the border for the end of the transition period and, in 2020 alone, announced funding of GBP1.41bn to fund new infrastructure and systems, and wider support and investment. Despite this, there remains significant uncertainty about whether preparations will be complete in time, and the impact if they are not. Some of this uncertainty could have been avoided, and better preparations made, had the government addressed sooner issues such as the need for an increase in the number of customs agents to support traders.”

Gareth Davies, head of the NAO, said: “The 1 January deadline is unlike any previous EU Exit deadline – significant changes at the border will take place and government must be ready. Disruption is likely and government will need to respond quickly to minimise the impact, a situation made all the more challenging by the COVID-19 pandemic.”