Too Little Too Late? No-Deal Brexit Planning Shakes Service Suppliers

February 5, 2019 Updated: February 5, 2019

LONDON—From Britain’s hospitals and schools to its prisons and armed forces, firms supplying essential public services have been asked by the government to outline plans for a no-deal Brexit.

But with exit day set for March 29, British Prime Minister Theresa May has yet to strike a deal to leave the European Union which is acceptable to parliament, leaving the companies worried that the government is doing too little too late.

“The government has written to some of us asking us ‘what are you doing in preparation for a no-deal?’—which is timely, at eight weeks to go,” one industry source told Reuters, speaking on condition of anonymity.

“I have never been in such an unknowing place in all of my corporate life,” the source added.

Private firms including Babcock, Capita, Serco, G4S, Mitie, and Compass play a central role in providing Britain’s public services, which means they have to procure medicines, toiletries, food, spare parts, and labor, much of which come from the EU.

While the government says it is confident it will strike a deal with the EU, companies worry that may not be the case. If Britain exits abruptly, new customs checks could lead to major delays at ports, affecting the supplies needed for them to provide day-to-day services.

“Companies are getting more and more nervous [about a no-deal Brexit],” a second industry source said, echoing fears raised by Serco’s CEO Rupert Soames who in December described the British business climate as “bad and getting worse.”

“I am increasingly worried we are now in a place where people are talking about supply chains and trying to guarantee them. But beyond stockpiling, nobody actually knows what no-deal might mean,” another source in the sector told Reuters.

By Elisabeth O’Leary

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