As white elephants go, few come larger than £25m. That is the cost of the hi-tech border control post, built to government specifications to handle post-Brexit checks on goods entering the UK, that sits near the waterfront at Portsmouth international port.
The building has sat empty and unused for almost a year since its completion, after the UK government announced in April last year that the introduction of post-Brexit import checks would be delayed for a fourth time.
Since then, ministers have altered their plans for how goods will be inspected when they enter the country, with a full border strategy expected to be unveiled next month. Meanwhile, the local council faces an estimated £10m bill to cover its debts, maintenance and the cost of catering to the new changed requirements.
“It is frustrating,” says Mike Sellers, director of Portsmouth international port, surveying the echoing, empty rooms inside the enormous, state of the art structure. “Because we’ve built to a design that was specified by the government … So we’ve done what they’ve asked, and we built it in time.”
Physical checks on fresh produce entering the UK from the EU and the rest of the world, including meat, plants and forestry products, had been expected to begin on 1 July last year, after a string of postponed deadlines.
But they were delayed again in April 2022 amid industry reports that neither the required infrastructure nor technology would have been ready. The then Brexit opportunities minister, Jacob Rees-Mogg, said at the time it was wrong to impose new checks during a cost of living crisis, and risk further driving up food prices.
Ever since, ports, traders and businesses have waited for the government’s new post-Brexit border strategy, known as the target operating model (TOM), originally expected last autumn.
The proposals were eventually published in April and the industry consultation window closed earlier this month. Under the plans, the UK’s import regime will be lighter-touch and require fewer physical checks on certain types of imports than previously envisaged.
Goods arriving from overseas which are subject to sanitary and phytosanitary controls – including imports of live animals, animal products, plants and plant products – will be ranked as low-, medium- or high-risk according to type and origin.
The TOM proposes phasing in import checks in three stages over a year, starting this autumn. From 31 October 2023, importers will be required to have health certificates for medium-risk animal products, high-risk food, and high-risk feed not of EU animal origin, as well as phytosanitary certificates for medium-risk plant products from the bloc.
Physical checks at the UK border begin on 31 January next year – when the border control posts at places such as Portsmouth will finally spring into action, albeit conducting fewer checks than originally anticipated – while safety and security declarations will also be needed from 31 October 2024.
Given the lighter-touch checks proposed, Portsmouth’s border post now looks overengineered, with much of what it offers potentially surplus to requirement. It boasts 14 lorry bays and was designed to receive low- and high-risk goods entering the UK including meat, plants and forestry products, and allow their inspection in air-lock quarantine zones to prevent cross-contamination.
Construction of the facility at the UK’s second-busiest cross-Channel port cost £25m, for which it received £17.1m of taxpayer funding through the government’s oversubscribed port infrastructure fund, about half of its £32m application.
Despite modifications to cut costs, the port’s owners, Portsmouth city council, had to take out a loan to cover the shortfall, which Sellers says cost the city’s taxpayers £5.4m, and still needs to be paid back. Running the lights and freezers last summer when electricity prices were sky-high – which it was obliged to do, as it was liable for any defects in the building’s first year – is estimated to have cost a further £500,000.
If the government had outlined its latest border strategy straight after Brexit, Sellers says the port would have been able to build a considerably smaller facility, costing about a fifth of what it actually spent. Worse still, it faces spending more to adapt the facility to the new requirements – or even build a second one.
“There is still the £5.4m of council debt, if you like, plus whatever it’s going to cost to either make this facility suitable for the target operating model, or build the alternative, which could be another £4m or £5m,” he says.
“I think by the time we’ve finished this, my best guess is we will have spent the best part of £10m for very few inspections that are going to come through the port, and we still have to recover that cost.”
Ports will be able to earn money from charging importers for the goods checks. However, Sellers says they are unclear what the benchmark price will be, as charged at the government-run inland border facilities, built in places like Dover and Holyhead where there was not space for a checkpoint at the terminal. Government proposals have not yet determined the cost, but have forecast it will be between £20 and £43 for each consignment.
Richard Ballantyne, chief executive of the British Ports Association, says: “Unfortunately, the TOM does not contain everything we in the ports sector need. This, at the very least, continues to fuel the uncertainty and frustration, and, most seriously, threatens preparation timelines.”
The reaction to the new border plan in the food sector has also been mixed. While the National Farmers’ Union (NFU) and some traders have welcomed the proposals, others have warned the imposition of checks could lead to gaps on shelves if exporters decide to skip the paperwork and stop sending produce to Britain.
The NFU argues the lack of controls on goods entering Britain since Brexit has been a “significant area of concern” for UK farmers and risks creating an uneven playing field. The EU brought in border inspections on UK goods at the start of 2021, while EU exporters had almost frictionless trade to Britain.
Shane Brennan, chief executive of the Cold Chain Federation, the trade body that represents the refrigerated supply chain, believes that small EU food producers “will not be bothered with the paperwork” required in future, and that many will stop supplying Britain altogether, leading to temporary gaps on shelves like those seen earlier this year for fresh produce.
“EU businesses in northern Italy or rural Germany probably haven’t thought about Brexit that much in the past few years,” he says. “Now we have to tell those producers to do a load of compliance they don’t currently do. They are not exporters, and up to now have only serviced the single market.”
Brennan believes the impact of post-Brexit checks has not yet been felt in the UK, as the country is, for the most part, a food importer rather than exporter. He also cautions that the added cost and complexity of the proposed border checks could keep annual food price inflation – already at the elevated level of 19%, according to official figures out last week – higher for longer.
A spokesperson for the Cabinet Office says its new border strategy will “provide protection from security and biosecurity threats, while preventing delays at the border through a reduction in the need for physical checks and by ensuring that checks take place away from ports where this is needed to allow traffic to flow freely”.
They added that the decision to remove the requirement for certificates or physical checks for many low-risk goods will help to “save UK importers around £400m each year compared to the previously proposed model”.