Leaked Brexit Memo Firm Deloitte Stops Bidding For Whitehall Work Amid 'Government By Rage'

Deloitte's report warned Theresa May has no EU exit strategy.
PA/PA Wire

The firm whose leaked report warned Theresa May has no Brexit strategy will temporarily stop bidding for Whitehall contracts, it has been reported.

Deloitte said it had “put forward a plan” for working with the Government that was intended to “put this matter behind us”, and included a six month moratorium on pitching for lucrative Government work, according to The Times.

The newspaper reported some in industry fear a culture inside Downing Street where external criticism is punished, with one source adding: “It is government by rage.”

A document prepared by Deloitte and obtained by the newspaper last month warned that Cabinet splits were delaying the Government’s ability to agree a negotiating strategy, which may not be ready for six months - after the Prime Minister’s deadline of March 2017 for the launch of withdrawal talks with the EU.

It identified ‘’well over 500 projects’’ being undertaken by Whitehall departments to implement Brexit, creating the need for up to 30,000 extra civil servants.

No 10 said at the time the memo, which appeared to be an attempt by Deloitte to pitch for Government work, had ‘’no credence’’ and it did not recognise the claims it made.

Deloitte said it “regrets” the publication of the document and apologised for the problems it had caused the Government.

A spokesman said:

“Deloitte regrets the publication of the two-page note, and has apologised for the unintended disruption it caused Government. The note was for internal audiences and was not a Deloitte point of view. We have put forward a plan for working with central government to put this matter behind us.”

No 10 declined to comment on the reports.

An industry source added to The Times: “My understanding is that the civil servants have not been at all keen on it and have been trying to cool the ministers off. But ministers, meaning No 10, are just determined to punish the firm. It is government by rage.”

It comes as Mrs May indicated Britain could remain in the EU for an “implementation period” after a withdrawal deal is reached, in order to give businesses and civil servants time to adapt to the new arrangements.

The PM signalled that the UK could take advantage of a clause in Article 50 of the EU treaties which allows withdrawal to be delayed beyond the two-year deadline for the conclusion of negotiations.

Senior Tory Andrew Tyrie warned major companies could start relocating staff to continental Europe soon unless they are assured that the UK is not facing an abrupt “cliff-edge” departure from the EU in 2019.

The chairman of the House of Commons Liaison Committee pointed out that Article 50’s much-discussed two-year deadline for departure relates to the situation if no deal is reached.

Otherwise, the clause states that EU treaties will cease to apply to a departing nation “from the date of entry into force of the withdrawal agreement”. And he asked whether this meant that the UK could apply “an implementation date at some point after 2019”.

Mrs May told the committee:

“I would expect to be able to negotiate a deal within the two-year period that is set out. But it may be the case that there are some practical aspects which require a period of implementation thereafter.

“That is what we will need, not just for us but for businesses on the continent and others. But that needs to be part of the negotiation. We will discuss whether we need an implementation phase - the point at which the treaties cease to apply may be a different issue from whether or not we have an implementation phase.”

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