REVEALED: THE NO DEAL FILES - DOZENS OF COUNCILS DRAW UP EMERGENCY PLANS TO TACKLE IMPACT OF BORIS JOHNSON’S SCORCHED-EARTH BREXIT - People's Vote

REVEALED: THE NO DEAL FILES - DOZENS OF COUNCILS DRAW UP EMERGENCY PLANS TO TACKLE IMPACT OF BORIS JOHNSON’S SCORCHED-EARTH BREXIT

Documents released today by the People’s Vote campaign show how local authorities are preparing for a trail of devastation from the imposition of an undemocratic No Deal upon the UK’s towns, cities and countryside.

Following on from the publication of the ‘Operation Yellowhammer’ briefings, today’s revelations underline the scale of the chaos, disruption and economic damage the Government is prepared to unleash on communities.

The People’s Vote campaign has obtained full “Brexit risk registers” from 63 local authorities under Freedom of Information laws. A mixture of confidential and public documents, they detail more than 100 potential risks ranging from gridlocked traffic around ports, a collapse in house-building to the inability to dispose of waste properly.

  • More than two-thirds of these councils (68%) believe there is a risk of food shortages
  • More than half identify a risk to supplies of medicine (52%) and fuel (59%)
  • Over three-quarters warn of deep job losses and lost investment due to trade barriers
  • Several predict further cuts in local services as a result of a sharp decline in revenues
  • Nearly two-thirds (65%) highlight the risk of public disorder and a rise in hate crime

 

The documents show there are also a number of widely-held concerns among local authorities that have been little publicised. More than a third of council anticipate problems with waste management, particularly around their ability to export waste for recycling or landfill.

More than half say that there is a risk that data will be significantly harder to manage. Some expect the number of unaccompanied minors arriving in the UK to skyrocket because Britain’s border force will be preoccupied with trying to manage Brexit. Still more expressed concerns about maintaining services such as social care because of staff who are EU citizens returning home. One even warned that there might be a backlog of disposing of dead bodies because it may be impossible to obtain spare parts for the local crematorium.

 

Commenting, Jacqui Smith, former Home Secretary and leading supporter of the People’s Vote campaign, said:

“The concerns identified here are not hyperbole from politicians or exaggeration by journalists. They are the sober assessment of public officials dedicated to the provision of key services from housing to traffic to social care to waste management. This is not ‘Project Fear’ so much as ‘Project Here’ because the impact on council services will negatively affect millions of people’s lives in countless different ways.

“Boris Johnson and his Government are still insisting they will inflict the disaster of No Deal on the country no matter what. No matter the harm it would do to millions of people, no matter the new law saying No Deal must be prevented, no matter their duty to the well-being of the country as the Government of the day. And No Deal would only be the beginning of the Brexit crisis – it would mean years more negotiations and wrangling and political arguments, with no end in sight.

“At the time of the 2016 Brexit vote, the prospect of No Deal was never mentioned as a serious prospect by Boris Johnson and his fellow Leave campaigners, so it is outrageous to claim there is any form of democratic mandate for it now. Before any form of destructive Brexit is inflicted on our country, the public must be given the final say with a People’s Vote. It’s the only way to deliver a lasting and stable conclusion to this crisis.”

 

Examples of local authorities’ concerns include:

One entry in Gwynedd Council’s risk register says: “Supplies – Food, Medications, devices and consumables. Risk of lack of supplies. The risk exists for us as a provider and also the providers we commission.” They go on to say that “Supplies of Medication is a substantial risk in terms of health in particular.” The document gives this risk a likelihood score of 5, the highest score, meaning they see shortages of essential supplies as near certain in the case of a destructive No Deal.

 

Wrexham Council’s register mentions “reduced housebuilding” four separate times. Reasons given include “increased borrowing costs”, supply chain disruption, “increase [sic] costs” and “loss of EU residents from the construction industry.”

 

Dudley Council is worried about its ability to maintain the water supply after No Deal. It lists as a risk “Constraints of supply to drinking water due to short shelf life (4 to 6 weeks) of imported chemicals.” Other councils mention potential difficulties obtaining water treatment chemicals as well.

 

Stevenage Borough Council is concerned about not being able to export waste to the EU. This could lead to waste piling up in the UK. It’s register says: “The UK recyclable material processing industry does not have sufficient capacity to absorb all of the dry mixed recyclables the UK collects and trades dry recyclables on the international market in order to achieve the best income streams and/or lowest costs. Recent trade restrictions implemented by China on waste and recyclate imports has affected UK markets and this could be exacerbated by trade restrictions with EU countries.”

 

Isle of Anglesey County Council is gravely concerned about the economic consequences of No Deal. It’s risk register says, “Reduced income from fees and charges, and increased bad debts as a result of widely predicted economic downturn; continued austerity as a result of reduced tax receipts due to impact of Brexit.”

 

Rochford District Council believes No Deal is likely to cause traffic chaos in the local area. It says: “There is speculation that the major routes to and from the UK’s freight and passenger ports will become gridlocked as the freedom of movement which currently exists within the single market is replaced by border controls. If this risk materialises, the Council’s proximately to those major routes means that there is a risk that the transport routes across the district suffer additional congestion as road users try to avoid major blockages.”

 

Worcestershire County Council is worried that fuel shortages will mean it is unable to deliver key services. The risk register says: “The unknown factor would relate to fuel deliveries and implications for service delivery. There would be a significant impact for the Council in the event of fuel shortages which would affect the ability of staff to attend for work and/or undertake travel in the course of their employment e.g. home visits etc. and directly impact on service provision such as Highways services.”

 

Denbighshire County Council thinks there could well be an influx of British pensioners returning from the EU, placing massive pressure on public services.  It says “there could be scenarios where large numbers of elderly UK citizens return from other parts of the EU” and that “the risk that there will be sudden increase in older people resulting in unexpected extra demand on care services for the elderly.”

 

Humber Local Resilience Forum thinks it is very likely that there will be “increased opportunity for clandestines (Including unaccompanied children) to seek to entre [sic] the UK” in the case of No Deal.

 

Basingstoke Council is concerned about the prospect of civil unrest. It fears that its staff and buildings may be under increased threat following a destructive No Deal/ The register says “In the event of community unrest, possibility of council buildings being targeted and damaged.” 

/ends

 

Notes to editors

A link to the full Brexit risk registers provided by 63 local councils can be found here.

 

Common No Deal Risks highlighted in the documents include:

1) Labour or skills shortages – 83% of councils that provided a full Brexit risk register identified this as a risk

The vast majority of councils expressed concerns that a loss of skilled European workers, and lower immigration in the future would lead to problems for business in the local area. Many councils mentioned this in relation to the care industry and health, where a significant percentage of Britain’s workforce are from the European Economic Area (EEA). Sutton, for example, said “for residential placements and for services indirectly delivered by Adult Social Care, the reliance on EU staff is considerable (for example, the most used 5 providers in Adults Services have an average of 33.5% employees that are EU citizens, which could potentially have a considerable impact).”

 

2) Economic damage – 78%

Most councils mention in their registers the widespread predictions from economists that any Brexit will do harm to Britain’s economy, and that a No Deal would be particularly damaging. About four-fifths include the risk to their local economy from Brexit in their registers. The mentions range from passing, such as Wrexham’s concern that there might be a “loss of business rates income due to an economic turndown,” to stark. Bristol worry about “a period of negative or restricted economic growth, impacting upon trade, investment, business confidence, council funding and finance, the labour market and key sectors of the local economy.”

 

3) Supply Chain Problems – 70%

Seven out of 10 councils are worried about potential disruption to supply chains - either their own, those of their contractors or those of local businesses. The concern is that, between delays at ports, a fall in the value of the pound and tariffs, supply chains will become extremely expensive and near impossible to manage. For councils, this means delays to building projects and problems delivering services properly, whilst for businesses, especially those with “just in time” supply chains, disruptions could mean going out of business. A typical entry, from Hull’s council, describes a possible “impact on just in time deliveries from continent to Hull manufacturing companies along with delays in reverse traffic to continent which has the potential to adversely impact on export and import business and cash flow leading to economic and employment pressures.”

 

4) Council staffing – 70%

Many councils employ at least some staff from the EU or EEA. They are concerned that these staff may leave as a result of Brexit (a risk that is heightened in the case of No Deal) and that it will become harder to recruit staff in the future. Calderdale echoes many other councils when it says “There is a risk of the movement of employees from the EU27 countries out of the Council’s employment whether there is an agreement or a no deal due to the level of uncertainty.”

 

5) Loss of council revenue – 70%

The majority of councils fear that any economic downturn as a result of Brexit will reduce their incomes, making it harder for them to provide essential services. Business rates are the most commonly mentioned source of income that might be affected by No Deal, but many councils also mention the ability of residents to pay council tax and potentially fines. This drop in income has the potential to be quite sudden ,which is why Highland Council talk of “potential loss of income and with insufficient time to plan mitigation.”

 

6) Food shortages – 68%

A staggering 68% of councils mentioned food shortages as a risk, if Britain goes ahead with a destructive No Deal. Given that most food is perishable, any delays at ports could lead to empty shelves in supermarkets and panic buying is considered a real possibility. For example, Sevenoaks have listed “Food supplies (inc. panic buying/stockpiling/increase in food costs)” as one of its risks. Many councils expressed concern that efforts to alleviate food shortage might allow unchecked, contaminated food into the supply chain. School meals and food banks were listed as being of particular concern.

 

7) Loss of EU funding – 68%

Many projects in the UK, both private and public, rely on European Union funding. About two thirds of councils mention the loss of these funds as a negative in their risk registers. Many do not have confidence that any replacement funding from the British government will be on time, substantial enough, or given out in the same way. Test Valley Council sum up the mood when they mention as a risk “Loss of access to EU funding programmes. Uncertainty over the value and eligibility conditions of any replacement funding.”

 

8) Civil Unrest or Increased Community Tension – 65%

A clear majority of councils see Brexit as a threat to the unity of their local areas. This category of risks includes mentions of “civil unrest,” “increased tensions” and “public disorder.” Large scale protests are anticipated as public anger grows in the event of a destructive No Deal. Some councils explicitly mention risk of far-right activity increasing in this period. Others see public disorder as a possible outcome of shortages of important goods. Hate crime has already risen as a result of the referendum three years ago and some councils think this could get worse yet. Dartford Council give the issue a thorough treatment, mentioning the possibility of “public protests/marches eg Right wing. Dartford has suffered with active members from national and international extremism. Dartford always been a target. Britain First have been very active in the past in Dartford. Increase in hate crime.”

 

9) Fuel Shortages – 59%

Any shortages of essential goods are unlikely to be limited to food. Fuel shortages are mentioned by many councils as a significant risk to their ability to carry out essential work. Many mention difficulties for staff getting into work, as well as problems for front line services. Chichester are more prepared than most, saying “We have storage for approximately 7 days’ worth of operations. We intend to try and keep this topped up but probably worst case we may have say 4 days’ worth of fuel at any one time. For all intents and purposes we feel that the most likely scenario is that fuel will be still available but limited to some point, so this reserve could well last 8-10 days before we have to operate hand to mouth.”

 

10) Increased cost of imports – 57%

In the case of No Deal, the price of imports is likely to increase significantly. First, if the exchange rate depreciates further against other currencies, which economists think is likely, goods we pay for in euros or Dollars will be more expensive. Second if there are significant delays at ports, that will increase the cost of importing goods. Finally, the UK may end up having to impose tariffs on certain imports from the EU to meet WTO obligations. Thirty-six councils mentioned higher import prices in one way or another, with Bright and Hove noting possible “increased costs for materials, products and food imports due to increased tariffs, bureaucracy and the falling value of sterling.”

 

11) Traffic 57%

Most councils expect No Deal to cause significant congestion as roads to and from ports become full of lorries. “Operation Brock” is likely to be deployed in such circumstance meaning lorries will be parked on motorways, causing massive disruption. Concerns about traffic are highly localised. For example, Havant Borough Council warn about “potential road congestion around Portmsouth [sic] could inhibit staff from getting into work and residents from moving around the district.”

 

12) Problems with Procurement – 57%

Councils which expect to have problems with procurement are in two categories. Some are worried about supply chain disruption and higher import costs (both mentioned above). Others, however are concerned about losing access to OJEU (also known as OJEC), the Official Journal of the European Union. This is where government organisations publish all tenders over a certain threshold. After No Deal, they will lose access to OJEU, making procurement more difficult and time consuming. Newark and Sherwood note that “Possible changes to procurement post-BREXIT, including OJEU, will impact how capital contracts are awarded and managed. There will be a substantial amount of work required to adapt to these changes.”

 

13) Problems with Data Transfers – 57%

Many councils note that a No Deal could “break” the complicated laws around data that the EU has brought in to protect privacy. There is a possibility that data stored by British councils in Europe will become difficult or impossible to access after a No Deal. Powys, for example write that “Cessation of transfer of personal data from EAA countries Data Centres possible if not subject to relevant contractual clauses or relevant clauses within Privacy Shield agreement if there is ‘no deal’.” It is likely that many councils who are exposed to this risk have not fully understood the significance of potential data transfer problems.

 

14) Increased Demand for Council Services Due to Economic Downturn – 54%

Most councils in the sample are concerned that any economic downsides from Brexit will increase demand for services including hostels, foodbanks and things like council tax reduction schemes. This will increase the strain on councils already suffering from austerity and having to deal with the other impacts of Brexit. Rochford go into significant detail, saying: “Any economic downturn will inevitably impact families and communities. If wages are stretched families will be vulnerable to increased stresses which may manifest themselves for example through more people claiming benefits, an increase in those being unable to pay Council Tax or even through an increase in family breakdowns, domestic violence or substance abuse which will increase demand on the Council’s services and those of the voluntary sector organisations with whom the Council partners”

 

15) Shortages of Medical Supplies – 52%

Fewer councils worry about shortages of medical supplies than food or fuel, seemingly because the Government has insisted it will make sure that up to six weeks of medicines are stockpiled in case of a destructive No Deal. However more than half of councils still mention medicine shortages in their risk registers. Often medicine shortages are mentioned at the same time as shortages of medical equipment, as in Southwark’s entry: “Shortages of specialist equipment and/or medication for those individuals in receipt of support / need.”

 

16) Port Delays – 48%

Those local authorities with a port in or near the local area have significant concerns about delays of goods coming in and going out. As such councils like Portsmouth and Dartford are the most worried. Dartford note there could be a “significant increase in “third country” immigration checks at Dover and the Channel Tunnel which could result in severe delays to both tourist and freight traffic which could result in a build-up of traffic on the roads of Kent.”

 

17) Confusion around legal changes – 48%

All sorts of laws and regulations will cease to apply after we leave the EU. Many of these will be transposed wholesale into British law, but some will have to be adapted to make sense in a British only context. Nearly half of the councils in our sample expressed concern of one kind or another about the difficulty of adapting to legal changes, and potential legal ambiguities, especially in the case of No Deal. South Lakeland say “The legal service supports all services across the Council and therefore there could be an impact on legal team workloads – especially where EU regulations have not already been adopted in UK law. This may apply to contracts if relevant regulations are EU and not UK. The Legal team may be required to interpret new government legislation or regulations for services.”

 

18) Exchange rate effects – 43%

One of the reasons that councils expect prices to go up is that the pound will likely decline further in value if there is a destructive No Deal. This makes goods and services from other countries more expensive. Some councils are particularly concerned about the cost of IT services, as many of these are paid for in dollars. One of those, Sutton, say “A number of ICT contracts and the provision of future goods and services are sold in dollars - we have already see [sic] some negative impact on this over the last couple of years, so depends on the volatility of the exchange rates etc in the future.”

 

19) Problems with Waste and Recycling – 37%

More than third of risk registers mention potential problems with waste and recycling after Brexit. Whilst a handful of these councils are concerned that fuel or staff shortages may make collecting waste more difficult, most are worried that waste will be far more difficult to export (either for landfill or recycling) after a destructive No Deal. Britain may not have the capacity to process all the waste that is normally exported to Europe. Brighton and Hove Council say that “The markets for recycled materials could be negatively impacted as a large percentage is exported via the EU.”

 

20) Problems with construction – 37%

A number of councils specifically mention the construction sector as being under threat in case of No Deal. It is more exposed that other sectors to supply chain disruption, labour shortages and increasing costs of materials. If all three of these problems materialise, it would likely lead to a significant slowdown in the UK’s construction industry. Most councils are involved in construction projects, including for schools, homes and redevelopment projects. Gedling Borough Council note the possibility of a “Downturn in development and construction locally with implications for affordable housing delivery due to increases in the price of building resources e.g. bricks and shortage of construction workers.”

 

21) Interest Rate Fluctuations – 33%

Councils in the UK are generally net borrowers, whose finances are likely to be squeezed if interest rates go up as a result of Brexit. This could happen for a couple of reasons. First the Bank of England could raise interest rates to fight the inflation associated with rising costs of imports. Second, institutions like councils could have their credit ratings downgraded as a result of poor economic performance after Brexit, meaning they face higher borrowing costs. Some councils also worry that there will be an increase in the repossession of homes as mortgages get more expensive. Newark and Sherwood District Council are experiencing some difficulties in this are already, saying: “Uncertainty in borrowing and rates is having a negative impact on speculative development and investment.”

 

22) Increased Workload for Council Staff

For all sorts of reasons, Brexit is likely to require a lot of extra work from councils and their staff. Many councils are concerned that already stretch employees will simply have too much to do, and that this could have an effect on front line services. Test Valley Borough Council anticipate an “Increased workload responding to Brexit and adapting processes arising from the transfer of EU legislation into UK law e.g data protection, employment law, procurement, Habitats Regulations.”

 

23) General Election – 33%

Given the current political situation, it is understandable that may local authorities believe that another snap general election is likely in the next year. This will cause disruption to the day to day running of councils. Havant Borough Council note the possibility of “An announcement of an early general election will affect Council services through the delay of decisions.”

 

24) Inflation – 32%

The UK has already seen higher than normal inflation as a result of the referendum in 2016. If the pound is further devalued in the case of a destructive No Deal, then inflation could spike again. Just under a third of councils mention this as a risk on their registers. High inflation increases peoples living costs, reducing their real incomes. Rochford District Council say: “Inflationary pressures may lead to wage growth being depressed in real terms, which could affect the Council’s ability to recruit and retain staff; and the potential for higher levels of defaults on Council Tax and NNDR income due.”

 

25) Loss of Investment – 25%

Inward investment into the UK has already suffered because of the Brexit vote. Many councils anticipate the situation getting even worse if we leave the EU without a Deal. Any drop in investment would, of course, damage the economy in both the short and long term. Wrexham council are worried that “Companies [will] invest less in the UK in general and Wrexham in particular.”

 

26)  British Expats Returning and Putting Strain on Services – 25%

A quarter of councils in our sample mention the possibility that in the case of No Deal thousands of Britons currently living in the EU will return to the UK, placing pressure on public services (at least in part because they are generally older). It is also very difficult to predict how many expats will return and where in the country they are likely to come back to. Rochford believe that “It is possible that expatriates may return to the UK and place further demand on the Council for services, but it is not possible to quantify this risk at present.”

 

27) Impact on Pension Funds – 21%

Some local authorities are worried about the value of their pension funds falling as a consequence of Brexit. Although this mostly affects council employees, if councils are forced to top up their pension funds this would take money that is desperately needed elsewhere after years of austerity. As Newham say, “If macroeconomic impacts such as currency valuations and interest rates change then it could impact on the pension funds valuation and funding level leading to a requirement for increased contributions to the fund from the council.”

 

28) House Price Fluctuations – 20%

Given that local authorities rely on disposals of land and property for funding, any major hit to house prices could be devastating for their ability to provide services. It would also jeopardise council funded redevelopment and disincentivise housebuilding more generally. Some councils also fear that a housing market slump could lead to increases in repossessions and homelessness. Gedling, for example, are worried about a “Potential fall in property prices due to a disorganised exit and consequent downturn in construction.”

 

29) Airport Delays – 17%

Those councils which have an airport, or have one nearby, are generally worried about delays to the movement of people and goods, and the resultant traffic. Some councils are also worried about airport staffing. Rochford District Council, for example, say: “This risk is particularly acute around London Southend Airport where the access to and from the terminal is filtered through a roundabout but is bounded to one side by the railway line. There is potential for traffic disruption if entrance to and egress from the airport site is delayed due to lengthier border controls.”

 

30) Loss of Tourism – 16%

Overseas tourism could be negatively impacted if a destructive No Deal creates new barriers for European visitors to visit the UK, if perceptions of the UK are damaged in other countries, or if border disruption makes it harder to holiday makers get through customs. This possibility has been noted by some councils, with Denbighshire noting “The risk that Brexit impacts could impact tourism to Denbighshire resulting in lower revenue for business and council owned attractions.”

 

31) Water Supply Problems – 14%

This is a particularly concerning issue. A total of 9 local authorities in our sample have water supply issues in their risk registers, and there is good reason to believe that this problem is more widespread than that. Many commonly used chemicals for treating drinking water and imported from Europe and if supply is disrupted, even for a short period, there could be severe consequences. Dudley Metropolitan Borough Council note as a risk “Constraints of supply to drinking water due to short shelf life (4 to 6 weeks) of imported chemicals.”

 

32) Problems with the Settlement Scheme for EU Nationals – 14%

Some councils anticipate problems with the Settlement Scheme for European nationals living in the UK. Whilst these people are automatically eligible for Settled Stats, there is concern that some vulnerable residents may be unaware that they need to register for the scheme, or unable to do so without help. Some councils also worry that children living in care who are EU nations may not be identified. Wrexham, for example, worry that “Vulnerable adults who need to apply for the EU settled status scheme may not be identified.”