How has Chris Grayling left the UK's ports so poorly prepared for no-deal Brexit?

Department for Transport under fresh scrutiny over botched plans to avert chaos at the border after 29 March

Chris Grayling’s at times shambolic handling of the risks posed by Brexit to Britain’s crucial transport infrastructure faced renewed scrutiny on Wednesday as MPs grilled the prime minister about a no-deal ferry contract signed and then cancelled by the Department for Transport (DfT).

The most senior member of Grayling's department also answered tough questions from the Public Accounts Committee about rushed procurement, wasted money and a worrying lack of preparedness for a no-deal Brexit at UK borders.

With just six weeks to go, how did we end up at this point?

‘No ferries’

Much of the torrent of criticism flooding into Grayling’s office has surrounded the DfT’s contract with Seaborne Freight for emergency ferry services.

The deal was supposed to ease potential gridlock at Dover and Folkestone. It was hastily signed despite Seaborne having no ferries, no track record and no contracts with ports at either end of its proposed Ramsgate-to-Ostend route.

Weeks after Grayling's department quietly released the contract notification on Christmas Eve, he announced it had been cancelled, ostensibly because potential backer Arklow Shipping had walked away.

How did the ‘no-boats’ ferry contract happen?

The public spending watchdog released a memo this week on the DfT’s procurement of extra ferry capacity.

It found the DfT had struggled to generate any interest from ferry companies to run the extra services. Perhaps as a result of this, the DfT offered what looked like a sweetener for the Seaborne deal.

The contract promised £3m to the Tory-run council in Thanet to cover the cost of preparing the little-used port of Ramsgate for freight ferries, which hadn’t run a service since the last operator collapsed in 2013.

The contract would not go ahead without this money. Grayling had assured the Commons that no taxpayers’ money would be spent unless services started. But a dredger, estimated to cost at least £14,000 a day for a month, was clearing the harbour on Wednesday despite no contract being in place.

The DfT says it is not paying for it, but it is unclear why or how a private company with no known customers would fund the work unless public backing had been assured.

The council postponed voting on its budget at the eleventh hour last week after a call from Chris Grayling. Local sources speculate the transport secretary made renewed promises of funding. The DfT would not comment on any assurances.

In truth Seaborne Freight is merely one window into the DfT’s handling of the options for air, land and sea routes between the UK and EU after Brexit.

Rushed procurement

The NAO’s memo revealed that Grayling’s department, tasked with preparing the nation's trade routes, was itself woefully underprepared.

The DfT only realised in September that there was an urgent need for more capacity to prevent significant no-deal Brexit disruption at Channel ports supplying more than a fifth of the UK’s goods.

It decided not to go through the normal open tender process and instead contacted nine ferry operators privately and asked them to bid.

Only three did so. All of them were awarded contracts, but the amount of capacity secured was less than half of what the DfT had hoped.

Consultancy fees

Despite Theresa May's claims in the Commons on Wednesday that full due diligence was carried out there was almost no time for checks.

That didn't prevent Deloitte, Mott MacDonald and Slaughter and May collecting £800,000 between them for their advice on the procurement process.

But in terms of due dilligence Slaughter and May carried out only a rudimentary “blush test” which checked things like Companies House records. Mott MacDonald and Deloitte both flagged concerns with the latter stating that it was not possible to conduct financial checks on a company with no financial history.

The consultancy bill adds to a predicted £800,000 in legal fees (again to Slaughter and May) plus potentially millions of pounds in damages to Eurotunnel which is suing Grayling’s department over its “secretive” procurement process.

All of these costs to the public purse relate to contracts worth a relatively paltry £107m. And the contracts may never even go ahead if a deal is agreed.

How much does this matter?

These sums are trivial compared to the vast damage that could be wrought by a chaotic no-deal Brexit. The DfT put the cost of six months of disruption at ports without intervention at £5.25bn, others put it higher.

A charitable analysis of Grayling's performance would say that the minister is dealing with a unique set of circumstances under immense time pressure.

However, given what we now know about Seaborne Frieght, what might be uncovered elsewhere if hundreds of other Brexit preparedness contracts were subject to the same level of scrutiny?

To take one example, what has happened to the £29m earmarked for Operation Brock; Grayling’s plan to turn much of East Kent into an emergency lorry park?

Kent county councillor Paul Messenger says many of the roads to be resurfaced as part of the plan simply don’t need it.

This is just a tiny fraction of the £2bn awarded by government departments in December to get ready for life outside the EU.

It seems hopeful to think that the rest has been allocated any more efficiently.