LEAVING the EU without a deal could cost Hampshire County Council millions of pounds, a high-level report has warned.
As negotiations between the UK and EU were reported to be close to collapsing this week, a document for a meeting of HCC’s ruling cabinet next week laid out the potential impact on local finances.
It said just over £600,000 had already been spent, mostly on Operation Transmission works on the A31 near Alresford, a contingency plan to stack lorries and reduce pressure on roads leading to Portsmouth ferry terminal.
It would cost up to £968,000 to operate the scheme for six weeks, the report said, with £100,000 extra for each further week.
Cllr Rob Humby, HCC’s cabinet member for economy, transport and environment, said further sites were being explored along with “pop-up” HGV documentation checks – although the council would not say where those might be.
Any expense would be sought back from the government, the report added, “as all of this activity is as a direct result of leaving the EU without a deal and should not be a burden on local council taxpayers”.
Further costs of between £160,000 and £240,000 would be caused by having to recruit up to six trading standards officers to deal with disruption to farmers, risks to animal welfare, and tackling the increased threat of unsafe goods entering the country.
Extra expense would come from inflation rising from the likely economic impact, with a 20% hike in food prices pushing the bill for primary school meals up by £550,000 until April, and an additional £1.9m in 2020/21.
A 5% rise would add costs of about £3.8m for contracts for highways, street lighting and waste, the report added.
The impact on exchange rates could drive up by £600,000 a year the cost of IT which is mostly sourced by HCC from the US. A further £300,000 could be added by spikes in drug prices.
Labour costs might also be forced up, the report warned, but added that the proportion of EU staff within HCC was not “as high as might be expected” and it was working to encourage them to apply for permanent residency as well as seeking to recruit locally.
In the absence of further government funding, the report said £555,000 would be ringfenced for contingencies.
Despite the extra spending, however, it concluded there were no “major risks” from a no-deal Brexit to the council’s overall financial sustainability.
It added: “The conditions surrounding Brexit are literally unique, and the number and complexity of the issues in play make any predictions speculative at best.”
Cllr Humby said the main threat was congestion on the roads from the 75% of lorries that may not be ready for new border arrangements, although that would lessen over time.
He said: “While the outcome of the Brexit process remains uncertain, I would like to reassure residents that we are working together to do everything possible to keep traffic flowing and ensure access to supplies and services can continue.”
‘Urgent wake-up call’
As the clock ticks down to 31st October, a Federation of Small Businesses survey showed almost half (49%) in the south-east region expected their performance to worsen, with 72% anticipating no improvement.
Only 25% are planning to increase investment this quarter, with 16% to decrease. Fewer than one in seven (13%) small employers are planning to take on additional staff in the next three months.
The FSB in Hampshire called for a Brexit deal to be followed with financial support for hard-pressed traders, and described the findings as an “urgent wake-up call”.
FSB development manager Nicola Bailey said: “There’s a real sense of exasperation among small firms.
“Big decisions – whether that be taking on new staff, purchasing machinery or embarking on sales in a new country – are being put on hold because we have no idea what our trading environment will look like in less than four weeks’ time.”
Her comments came amid reports this week of the Institute for Fiscal Studies forecasting a no-deal Brexit would raise government debt to its highest for 50 years, and HM Revenue and Customs predicting a £15bn cost to businesses from form-filling.
To help prepare, Hampshire Chamber of Commerce is offering companies free training sessions, supported by the Department of Business, Energy and Industrial Strategy.
These will be at the Four Seasons Hotel, Hook, on Tuesday 15th October, 2pm-4pm; Ageas Bowl, Southampton, on Wednesday 23rd October, 2pm-4.30pm; and Lainston House, Winchester, on Friday 25th October, 2pm-4pm.
A dedicated session for businesses involved in international trade is being held at the Ageas Bowl on Wednesday 23rd October, 10am-12.30pm.
Settled status appeal
EU citizens have been encouraged by Hampshire County Council and Bournemouth, Christchurch and Poole Council to apply for settled status.
In Hampshire there are more than 40,000 estimated EU citizens, of whom 9,000 had made the application by June this year, HCC said.
Cllr Andrew Joy, HCC’s cabinet member for communities, partnerships and external affairs, said: “I think it is essential that we do everything we can to reassure those who have yet to apply that we want to enable them to stay in Hampshire.”
BCP Council said the county of Dorset was in the top 10 areas in the UK with the highest number of EU citizens living there, with many in the health and social care sector and hospitality industry.
Anyone needing assistance with completing their application can get support from the Citizens Advice Bureau. EU citizens have until 31st December 2020 to apply for the right to stay. The application can be done online at www.gov.uk/eu-settled-status.