Unlikely as it may seem, beyond the politically-charged Brexit headlines, actual administrative work is taking place. Position papers are being crafted and ignored; requests for information are moving up and down the Whitehall communication chain; nearly a hundred UK civil servants were beavering away in Brussels during the initial negotiation round, and two new departments—the Department for Exiting the EU (DExEU) and the Department for International Trade—are seeking to shore themselves up. We know, too, about earmarked expenditures for additional civil service positions (£400m) and that over 1000 Brexit-related positions had been established (but not necessarily filled) by February 2017. All of this raises a seemingly straightforward question: what is the administrative cost of administering Brexit?
If this question sounds simple, in practice, putting a number on the administrative cost of Brexit presents a heroic task. Any proper costing exercise needs to include material factors—such as the need to recruit for particular positions, the need to create or rename ministerial departments, and the need to keep these departments and agencies running. Such tangible costs need to be combined with assessments of the potential opportunity costs. The cost of Brexit therefore needs to include the (opportunity) cost of not being able to embark on other policy priorities, and the need to shuffle administrative talent away from other portfolios to deal with Brexit.
In terms of the material costs of administering Brexit, one could point to DExEU, with its 384 civil servants and its budget of £94 million (for 2017/18). One might also wish to include the activities of the carved-out Department for International Trade, with its £364 million budget (for 16/7) and its 174 staff. Further, one might add the costs of running the permanent representation in Brussels (with its 120-odd staff that used to deal with the day-to-day EU business) and other units across ministerial departments, such as the Department for Environment, Food & rural Affairs, and agencies devoted to EU-related business, as well as the FCO and the Cabinet Office’s European and Global Issues Secretariat. Brexit-related expenditure will involve costs that relate to the hiring of additional specialists, the need to develop new IT systems and such like. Nevertheless, at the aggregate level, much of these Brexit-related costs might be drowned out by the total of government expenditure (including welfare and defense expenditures).
"In terms of the material costs of administering Brexit, one could point to DExEU, with its 384 civil servants and its budget of £94 million"But what are the factors that drive Brexit-related administrative costs? One cost driver is co-ordination. However many ministerial coordination committees may have been created to deal with Brexit, these are unlikely to succeed in papering over the various cracks that run throughout Whitehall and the devolved jurisdictions. Even without the inevitable blame games that will emerge between departments, there is, after all, the coordination need to deal with ongoing EU business. Regarding Brexit, there is the coordination need of bringing together departmental, agency and stakeholder positions in view of different Brexit scenarios in a context in which EU-related legislation cuts across the turf of different ministerial departments.
A second cost driver relates to the need for adding what is called “analytical capacity” (i.e., the capability to evaluate policy options and trends). National regulatory bodies and ministerial departments will have to develop their own expertise; for example, when it comes to risk analysis in the licensing of new food stuff, previously regulated by the EU. Furthermore, increasing the analytical capacity that is required for dealing with Brexit could mean other areas are neglected, leaving the government open to flatfooted responses in the face of inevitable crises elsewhere. Both of these are likely to increase costs.
A final cost driver relates to delivery capacity, i.e., the creation of organisations that will take on additional customs, immigration and inspection tasks. Whatever future regimes for EU citizens might look like, any attempt at establishing robust administrative machineries to deal with EU citizens alone will require legal certainty, administrative implementation plans and inevitable outsourcing, adequate human resources, and competent procurement of functioning IT systems. Some might regard this as ambitious.
Whatever shade of Brexit will finally emerge, any future settlement will require resources for three basic activities: influencing EU decision-making, monitoring and adjudication. In terms of decision-making, future costs might not change that much. If evolving EU standards were to remain the de facto standards applicable across the UK, then the main change would be that civil servants are turned into modern day courtiers in the Brussels antechambers, rather than participants in EU negotiation chambers. This might require a beefing up of the UK representation in Brussels—at the UK’s expense. Considerable cost expansion will emerge in those areas where the UK seeks to separate itself in policy terms from the EU.
"Those with expertise might elect not to work in Brexit-related portfolios"The second key administrative cost relates to continued monitoring: after all, being seen to be non-compliant with EU standards comes at potentially higher cost to EU non-members than members. This, again, might be relatively cost-neutral and could rely on existing domestic structures, as organised by the Cabinet Office already. Finally, there are costs associated with adjudication over conflicts. It is not clear how costs will play out in this area as long as there is no acceptance of a continuing role for the European Court of Justice.
There is one further innumerable administrative cost of Brexit. For climbers inside the bureaucracy, Brexit might offer the once-in-a-lifetime opportunity to quickly stampede up the career ladder. But for many others, Britain’s exit from the European Union represents a loyalty challenge as Brexit represents an undoing of the work of existing and previous generations of civil servants.
Working for a political elite committed to Brexit threatens the underlying Whitehall bargain where enthusiastic working for a government of the day was promised in exchange for the right to be heard by the politicians in government. Brexit politics has challenged this right as certain options are no longer presentable to ministers. Partly, this means that those with expertise might elect not to work in Brexit-related portfolios. Partly, it means that civil servants are now forced to turn their backs on what they regard as "least suboptimal" policy approaches: namely working through EU institutions and benefitting from EU-wide information sharing.
UK politicians are more likely to end up with cake on their faces than in their stomachs. However, it is the Brexit-related challenge to the Whitehall bargain that is likely to represent the real administrative cost of Brexit. The intractable administrative costs of being distracted and frustrated by Brexit represent the true long-term tab that British citizens will inevitably have to pick up.
