“RIFT in action” : The Brexit project: a risk analysis
The Brexit Project: a risk analysis
Peter Spencer
Le Boulou,
France,
January 2017
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Introduction
This document has been written in response to a call for help from Kalba Meadows of the RIFT (Remain in France Together - in Action)
Facebook group https://www.facebook.com/groups/RiftInAction/
It is based on a larger document already filed on the RIFT site.
This is a summary, of what I see, as the risks should article 50 be triggered.
I have a used a technique from my project management days based on “traffic lights” reporting.
Thus each risk uses Red, Amber and Green (RAG) flags with a “score” of 10, 5 or 0. I have not weighted the “priority” of each line at this point.
It is structured as follows
1. The current “Exit” Timeline
2. The Tangible Impacts
3. The Intangible Impacts
I have heavily “cribbed” from an amazing source. The Conservative government’s own, extremely comprehensive, document published in
February 2016 but unfortunately little read or publicized during the campaigning. See URL below.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/504216/The_process_for_withdrawing_from_the_EU_print_
ready.pdf
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Timeline
When
What
Notes
2017
January
Supreme
court ruling
A yes / no on whether parliament gets to debate the triggering of article 50
2017 Jan –
Mar
A debate in
parliament
(assuming
the
Supreme
courts
follows the
high court
reasoning)
MPs will debate what they would like to see happen as part of the exit agreement and what the shape
and size of the exit plan is.
PM triggers
article 50
This has never happened before so we have no baseline to guide us into the unknown.
2017 end
March
Risk level at
“score”
0
It will not be a debate on a yes/no to Brexit purely what form Brexit will take.
The debate has the potential/likelihood of generating legislation that will need to pass through
Parliament. This could have an effect on the end March date
n.b. One possible fallout from the debate is that it throws up so many unanswered questions and
stumbling blocks that the PM has to “go to the country”
One obvious question: “is the request revocable?”
It could be that within the first 6 months it becomes obvious that the whole idea is unworkable and
the PM calls the whole thing off (and then goes to the country).
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Or what happens if no agreement can be reached at the end of 2 years?
We then have to rely on the goodwill of 27 member states for an extension.
Article 50 does not include an exit from the EEC.
2017 April
1st
Negotiation
s begins
When the referendum vote was in I would have expected the Government to establish a core team of
planners, headed up a senior Civil Servant (or MP or business leader), to start to build the Brexit
strategy and an outline plan of work I have seen no obvious signs of this happening even now
(January 2017).
With negotiations due to start in April the Government will need to reassign hundreds of suitably
skilled civil servants (and probably external consultants) to form the negotiating teams plus the
appointment of a ”programme Manager” and project office team to pull it all together. This individual
would need to report to the PM and the Cabinet.
An extensive budget will be required plus clear goals and objectives, a management system, an
evaluation of risks and issues, a project office and associated infrastructure (network, hardware,
software, applications, telephony, storage, security etc.). Again there are no obvious signs that this is
happening
Assuming the government is targeting the two year period then the component parts of the
negotiation would need to start at the same time. Bearing in mind the interconnectivity of these
elements the workload and coordination will be considerable.
Independent, and knowledgeable sources believe this “project” could take 10 years but for the sake
of argument let’s assume the government can hack it and can provide the experienced staff for each
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topic area then up to a thousand specialist staff will need to be in place by end February along with a
clear project plan of what needs to be done.
My background is in project management and my experience of why projects fail identifies a number
of reasons
 Lack of an “on board” Project Executive from start to finish (i.e. someone who really wants this
to happen and will move heaven and earth to make it happen by removing every obstacle
along the way). Bear in mind the PM was on the remain team.
 Lack of clear goals and objectives
 Lack of clear deliverables
 Lack of clearly stated risks and issues
From what I’ve seen, and has been reported by independent sources, the Brexit project falls down on
all of these points.
When a project of this size and costs (and its related implications) is identified (in this case by the PM)
you would typically expect the programme and project managers to be assigned immediately to run a
project definition workshop that would “scope” the project.
This definition would contain the following line items
0. Introduction (by the project sponsor (the PM) explaining why we need this to happen) – this may
have happened yesterday 17th January)
1. Pre-requisites – what needs to be in place before starting the work
2. Goals – the end game picture
3. Objectives – What is to be achieved and by when
4. Work Scope – what’s in and what’s out
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5. Work Plan – the tasks to get you from A (April 2017) to B (April 2019)
6. Milestones – the checkpoints along the way
7. Resource Plan – the people and assets required
8. The Costs
9. Deliverables – what tangible products will you have in your hand on April 1 st 2019
10. Benefits statement – A description of the project benefits (including the Financial benefits)
11. Organization – the structure of the project team
12. Roles and Responsibilities – the roles, their tasks and their skills sets
13. Management System – Meetings, reports, tracking, escalation etc.
14. Risks – identify the risks and categorise them – High, medium, low and then manage them
15. Issues - identify the issues and categorise them – High, medium, low and then manage them
16. Assumptions
17. Dependencies – what relies on the success of this project
I’m sorry to over play the project management card but in this instance I think it is appropriate not
least as this is not one project but multiple projects running in parallel so a “Programme of work”
making it even more complicated. One final point on the project front. Normally projects have 3
elements to play with – time, money and resource. With Brexit you only have money and resource
which provides an immediate restriction on the people managing the work.
It should also be borne in mind that the skills required are very specific. Contract management skills,
Treaty negotiation, Legal skills (of every flavor), diplomacy, project skills, arbitration skills, etc. etc.
Will the government be able to staff these positions in time? The above does not include a further 13
areas to be addressed (see below) for which even more staff and resources will be needed and
integrated into the above project and management system.
Please bear in mind the UK is attempting to unravel 40 years of work between itself and the EU in
relation to laws and treaties. Can this really be achieved in 24 months?
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I will throw in a curved ball to round off this section. Leakage. In any contract negotiations, or when
playing poker, you would want to hold the cards close to your chest. In a situation where you have
hundreds of staff (48% of whom don’t want this to happen) I would envisage leak after leak to the
extent that the best plumber in the world would struggle to keep this ship afloat.
2017 April
through
2019 April
Key
negotiation
s to be
resolved
during this
period
1.
2.
3.
4.
5.
6.
7.
Plus
1.
2.
3.
4.
UK and EU citizens rights
Human rights
Access to the single market
Protection of UK farming
Security (physical and logical) agreements e.g. Europol, Arrest Warrants
Gibraltar
Northern Ireland
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The Treaty on the EU
The Treaty on how the EU functions
The 37 protocols plus annexes and declarations
Euratom
The Government document from which a lot of this is taken makes no mention of Scotland yet, I
would suggest, it needs to be factored in. Sturgeon has recently stated she would be happy with a
“soft” Brexit but all indications are it’s going be “hard” with the four freedoms (immovable objects)
being the main stumbling blocks
1. Free Movement of Goods
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2. Free movement of workers
3. Right of establishment and freedom to provide services
4. Free movement of Capital
It should also be noted the David Cameron’s “reform agreement” of February 2016 is null and void.
It should also be noted that during this period of “limbo” we are still in the EU and must abide by
the existing laws and treaties until the final day.
I can only assume this would hamper planning on ALL fronts up to April 1st 2019 when, in theory,
the UK will know what it has and where it is going. Not, I would suggest conducive to properly
running a business of any sort and who knows what affect this limbo period will have the markets
as I’m told they don’t thrive on doubt.
2017 April
through
2019 April
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Subsidiary
negotiation
s to be
resolved in
this period
Examples of other issues that negotiations would also need to cover in the context of managing the
transition, fixing the terms of exit and, fixing any future arrangement, include:
1. unspent EU funds due to UK regions and farmers;
2. cross-border security arrangements including access to EU databases;
3. co-operation on foreign policy, including sanctions;
4. transfer of regulatory responsibilities;
5. arrangements for contracts drawn up in accordance with EU law;
6. access to EU agencies that play a role in UK domestic law, such as the European Medicines Agency;
7. transition arrangements for UK exit from EU Free Trade Agreements with third countries;
8. arrangements for the closure of EU agencies headquartered in the UK;
9. departure from the Single European Sky arrangement;
10. access for UK citizens to the European Health Insurance Card;
11. the rights of UK fishermen to fish in traditional non-UK waters, including those in the North Sea;
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19 See article http://www.politico.eu/article/brexit-would-destroy-gilbraltar/ 20 The process for
withdrawing from the European Union
12. continued access to the EU’s single energy and aviation markets; and
13. the status of the UK’s environmental commitments made as party to various UN environmental
conventions and currently implemented through EU legislation
2019 April
or a date to
be
confirmed
UK exits the
EU
EEC (European Economic Community) the exit from this is unclear.
Is it assumed we stay in it?
https://en.wikipedia.org/wiki/European_Economic_Community
The negotiation of new trade agreements as existing EU agreements (the UK shares) would be null
and void
Use of existing WTO membership and the implications of same
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Tangible impacts
The following section (and the words) is taken from a Government document published in February 2016
Tangible elements for negotiation
Risk level
The withdrawal negotiation would need to address a wide range of difficult issues related to withdrawal itself, and also to our
future relationship with the EU. Article 50 does not set out explicitly what issues would need to be resolved and there is no
precedent to draw on.
10
The UK’s relationship with the EU has built up over 40 years of membership and affects many aspects of life in the UK, and of UK
citizens living across the EU; the terms of exit would have to cover the full extent of that relationship.
This would include the status and entitlements of the approximately 2 million UK citizens living, working and travelling in the other
27 Member States of the EU. They all currently enjoy a range of specific rights to live, to work and access to pensions, health care
and public services that are only guaranteed because of EU law.
10
There would be no requirement under EU law for these rights to be maintained if the UK left the EU. Should an agreement be
reached to maintain these rights, the expectation must be that this would have to be reciprocated for EU citizens in the UK.
The negotiations would also have to cover the UK’s access to the EU’s Single Market, which currently rests on our membership of
the EU, and related to that, the free movement of people.
These negotiations would be complicated: the UK would want to disentangle regulatory frameworks and establish transitional
arrangements across a wide number of areas; and secure preferential access to the EU market including in sectors like financial
services and car manufacturing where the UK enjoys a trading surplus.
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The impact of these negotiations would have a wide and profound impact across the UK and its economy. For instance, the UK’s
current access to the Single Market is important for the UK’s manufacturing sector. Last year, the UK exported a record number of
cars (1.23 million), with more than half going to the EU market.
10
The industry directly employs 147,000 people and supports a further 300,000 jobs in the wider supply chain. The North-East of
England has one of the highest shares of EU exports in the UK’s regional economy, and attracts high levels of foreign investment.
Unless preferential access was agreed with the EU as part of the exit negotiations, UK car manufacturers would face a 10 per cent
tariff when exporting to the EU. Moreover, over 40 per cent of components purchased by UK vehicle manufacturers are from the
EU. These parts would become more expensive if the UK were forced to raise tariffs under WTO rules.
The UK’s withdrawal from the EU would have a serious impact on UK farmers. In addition to the impact of withdrawing from the
EU’s Common Agricultural Policy and associated subsidy schemes, they would also lose their preferential access to the European
market if the UK left the EU without a successor arrangement in place.
10
The EU imposes an average tariff of 14 per cent agricultural imports from non-EU countries (including countries that have their
own special trading deals with the EU, like Norway and Switzerland), with higher rates on individual items, such as dairy products
(average of 36 per cent). UK farmers would also no longer be able to benefit from preferential access to non-EU countries secured
by the EU under trade agreements.
If the UK left the EU without an agreement in place, we would lose the security benefits of our participation in a range of EU Justice
and Home Affairs measures that help the fight against crime and terrorism. For example, since 2004 the European Arrest Warrant
has allowed 7000 people to be extradited from the UK to face trial and has resulted in just over 1000 people being returned to the
UK to face justice here. The European Criminal Records Information System enables us to secure information about criminal
records.
The Schengen Information System II operates as a ‘watch list’ through which we have access to operational data on terrorist
suspects and criminals. And from 2017 we will be part of the Prüm Decisions relating to information on fingerprints and DNA.
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If we were outside the EU, this co-operation would be curtailed. Aside from those States that are not in the EU but are in the
Schengen border-free area, there are no precedents for non-Members being able to cooperate within these mechanisms. Even
Switzerland, for example, does not have an equivalent to the European Arrest Warrant. We would also lose our status as a full
member of Europol, an agency that coordinates the fight against serious and organised crime among EU countries.
There would be serious implications for Gibraltar were the UK to withdraw from the EU. Inside the EU, Gibraltarians have the
right to move freely to Spain, and the right to establish a business and provide services there. But, before Spain joined the EU in
1986, the border was closed from 1969–85. If the UK left the EU, there would be no certainty that the border would remain open.
The Chief Minister of Gibraltar has said that this would pose “an existential threat in economic terms” to the territory.19 The
Channel Islands and the Isle of Man, which enjoy special arrangements for access to the EU, would face similar uncertainties.
Northern Ireland would be confronted with difficult issues about the relationship with Ireland. Outside the EU’s Customs Union, it
would be necessary to impose customs checks on the movement of goods across the border.
Questions would also need to be answered about the Common Travel Area which covers the movement of people. This could have
an impact on cross-border co-operation and trade. The withdrawal of structural funds, which have helped address economic
challenges, would also have an impact.
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Case Study: The effect of an EU withdrawal on the financial services sector If the UK were to leave the EU then the UK government
would need to disentangle the regulatory framework from EU law for the financial sector.
Regardless of the exit negotiations outcome this would be a large and complex task. For most types of financial services, EU law
amounts to the substantial majority of the UK’s legislative framework, whether directly applicable or EU Directives transposed into
UK law. EU Directives and Regulations govern the regulation – both prudential and conduct of business of all major sectors,
including banking, insurance, wholesale and retail investments, provision of market infrastructure, payment, clearing and
settlement systems and a host of other activities.
One consideration for the UK Government would be how to avoid regulatory gaps in the UK’s domestic legislative framework once
the EU Treaties ceased to apply. This would involve questions over how existing EU law could or should be adopted into domestic
law. Another consideration would be the status of UK firms whose existing business operations in other EU Member States were
authorised under EU law, and of firms based in other EU Member States with operations in the UK. Inside the EU, thanks to
“passporting”, UK financial firms – including banks, insurers and asset managers – generally have the right to sell financial
services and establish branches anywhere in the EU without other countries being able to impose different or additional
requirements.
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Intangible impacts
This is my list (off the top of my head so I am sure I have missed some line items)
They are topics I have not seen clearly discussed or debated since July 2016 and therefore have no clear idea of how the government proposes
to deal with them as they appear to be outside the scope of the immediate negotiations. I cannot see how there will not be knock on effects in
every area but, as yet, we have no idea of the financial impacts.
Apart from citizenship I don’t think any of them will be directly debated during the 24 month negotiation process with the EU but will still need
addressed and “fixed” in parallel and the workload added to that described above..
Topic
Financial
impact?
Questions
Risk level
Quantified?
Citizenship
YES
How are individuals impacted / safeguarded in the negotiations?
NO How these negotiations might affect UK citizens as they get a range of rights from our
membership of the EU?
If the UK were to leave the EU, all of these rights would have to be covered in a successor
arrangement.
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If we left the EU without agreeing what would happen to these rights, it would at the least bring
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them into serious question, creating difficulty for UK citizens who relied on them.
A selection of these rights includes:
 the right to live, work and own property in all 28 countries of the EU;
 the ability to retire to another EU country;
 the right to receive healthcare that is free at the point of use and paid for by the NHS,
using the European Health Insurance Card;
 the right to vote in local elections in other EU countries;
 mutual recognition of child custody decisions across the EU;
 the use of the European Small Claims Procedure to reclaim up to €2,000 from individuals
in other EU countries;
 The right to use public services in other EU countries.
Plus

Trade
YES
Pensions both state, company and private
How do we expand our trading partnerships?
NO What will be the impacts of being outside of the EU?
What new bureaucracy will be established for British businesses both from within the UK and by
external parties once we exit the EU?
The existing situation can be found here. http://atlas.media.mit.edu/en/profile/country/gbr/
It is also worth noting here that the skills needed to create the “future” trading environment will
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be dealing the exiting the existing trading environment. Maybe the Civil Service is knee deep in
these gurus but I doubt it.
Consumers
YES
At present we are homologated on many fronts within the EU not least product safety and
conformity.
NO
Will the UK maintain the EU consumer protection rights that currently exist?
5
Could we drift apart and what would that mean for buyers and sellers?
Will the UK still be expected to abide by existing (and new) EU laws if wishes to trade in the EU?
Inward
investment
YES
Will the UK still be an attractive location for inward investment when there will be so much
uncertainty, over the contents of the final deal, for the next 2 years (plus)?
NO
Tax
YES
What are the impacts on individual and corporate taxation?
NO Recent statement by Philip Hammond allude to the possible setting up of the UK as a tax haven
(presumably more than it is now) which will have a direct impact on the middle and lower classes.
I think this is called “trickle up” economics.
The Financial
markets and
the City’s
existing
preeminence
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YES
5
10
Will Frankfurt, Paris and NY steal business from the City?
NO Is the GMT time zone still important as a central hub for trading purposes?
Will it be as easy to get experienced financial people to come to the City? (Immigration, visas,
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The pound
salaries, tax etc.)
What are the positive and negative benefits of a weakening pound?
YES
5
NO
Utilities
YES
How will gas, petrol, and electricity supplies be impacted?
NO Many Utilities are owned by foreign companies. Will they be adversely impacted by the UK’s exit?
10
How will Britain’s nuclear power supplies be protected?
Transport
YES
A high proportion of railway services are owned by foreign companies. How will these be
impacted?
NO
We have agreements with regard to flights across the EU. How will these be impacted and will
visa controls deter flying and tourism?
10
How will the movement of goods and people change?
Trains, Lorries and planes flow to and fro between us, the EU and Ireland. Will that be impacted
by tax or visa changes?
The NHS
YES
Will the NHS cope if key staff can no longer, easily, enter and work for the NHS?
NO In this instance key staff means at ALL levels of NHS hiring from cleaners and porters to surgeons
and nurses.
How will it affect medical research and partnering with EU organisations?
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The Arts
YES
Brexit implications
Will it be more restrictive for artists in any media to perform and work in the UK (and vice versa)
post Brexit?
NO
Will the British Film industry be adversely impacted?
5
Will cross border funding for the cinema be impacted?
Will inter museum loans be impacted?
Tourism
YES
Will immigration and visas hamper tourism?
NO Will the hospitality industry continue to be able to employ cheap foreign labour?
The law
YES
10
What are the impacts on the laws currently shared with the EU?
NO We will need to rework UK laws to replace EU laws (with their associated links and complications
such as timing and interconnectivity). This, I think, is the aim of the “Great Repeal Bill” but that
would appear to be a can of worms with a number of other “features” being flown in under the
radar as part of its implementation
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The new laws will NOT be able to be implemented until the UK is out of the EU so that will have a
major impact on British businesses for forward planning and coping with the deluge of paperwork
when the laws are “switched on”
Science
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YES
How will the scientific community manage for investment and research once out of the EU and
their existing research partnerships?
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NO
Immigration
YES
Will the UK still be a positive destination for immigrants of any sort, refugees, financial
immigrants, families of existing residents, skilled personnel, etc?
NO
5
Will existing EU citizens be deported?
Emigration
YES
Will we see a rise in the number of skilled people and retirees leaving the UK?
NO Will it be more difficult to move to other countries not least the EU?
Employment
YES
5
Will foreign skills (of any sort) still find it easy to come to the UK and vice versa?
NO How will existing UK businesses cope outside of the EU and, with the likely increase in
bureaucracy, hamper and stifle the hiring of staff?
10
What will replace the existing EU funding for deprived areas of the UK?
Education
YES
Will foreign students still find it easy to come to the UK and vice versa?
NO If there are problems what is the financial impact on this sector?
5
How will the Erasmus program be impacted http://www.erasmusprogramme.com/
Defence
YES
What agreements between the UK and EU military services will be impacted?
5
NO
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Sport
YES
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How will sport be affected by visa and tax changes?
NO Will there still be free movement of players in any sport not least Football and Rugby
5
Most seriously of all : will the Ryder Cup be affected?
Summary
If a CEO (Prime Minister) were to present this programme of work to their Board (the Cabinet), with this level of risk, to their company (the UK)
they would be laughed out of the room or possibly hung, drawn and quartered for threatening the safety and security of the shareholders and
stakeholders (the taxpayers) of that company. The question is how well have those involved been briefed on the risks and impacts Involved?
In all the projects I have been involved in I have NEVER seen one signed off (to progress) with this level of risk in existence on day one. I maybe
missing something and a suitably briefed civil servant can put my mind at rest but, somehow, I think not.
If article 50 is triggered we can expect to see the “ship of fools” (TM’s cabinet) sail off towards the horizon never to be seen again leaving the
UK floundering in limbo for 2 to 10 years as “this dog won’t hunt” : one of my favorite expressions from the “Deep South”.
With the above analysis in hand would any of you embark on this course of action?
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