Ministers have moved to boost planning for a no-deal Brexit across government by allocating extra cash and announcing that all non-urgent business will be halted to free up civil servants for EU exit preparations.

Cabinet has today assessed the level of preparedness across government if the UK were to leave the European Union without a deal on March 29.

The UK could leave the bloc without a deal if the House of Commons does not approve the draft agreement prime minister Theresa May has reached with the EU on the terms of the UK’s exit. May yesterday confirmed that the postponed vote that had been expected to take place last would not take place until mid-January.

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At today's cabinet meeting, Brexit secretary Stephen Barclay was expected to say all non-essential government business is to be suspended so that civil servants can concentrate on no-deal planning.

This comes after a cross-party group of select committee chairs warned the government that Brexit was having a “detrimental effect” on wider domestic policy. This point was reiterated by an unnamed cabinet minister, who told the Guardian: “Do you take civil servants off the social care green paper, for example? That’s the choices in front of us."

Chancellor Philip Hammond has also announced he would make £2bn announced in the Budget available to pay for no-deal preparations.

Speaking yesterday in the House of Commons, May said that funding allocations for 2018-19 were already being spent, while allocations of the £2bn pot were nearly agreed.

“Negotiations on those are well advanced, several departments have settled and we expect to be in a position to confirm all those shortly.

May acknowledged that her deal was “not everyone’s perfect deal – it is a compromise – but if we let the perfect be the enemy of the good, we risk leaving the EU with no deal”.

She told MPs: “Of course, we have prepared for no deal, and tomorrow the cabinet will be discussing the next phase in ensuring we ​are ready for that scenario. But let us not risk the jobs, services and security of the people we serve by turning our backs on an agreement with our neighbours that honours the referendum, and provides for a smooth and orderly exit. Avoiding no deal is only possible if we can reach an agreement or if we abandon Brexit entirely.”

She said that such no-deal planning was “responsible government” and would “ensure that contingency arrangements are in place until we have the outcome and know with certainty whether we are leaving with a deal or no deal”.

The updates comes after civil service chief executive John Manzoni told MPs he expected to hire between 2,000 and 3,000 more civil servants to work on Brexit if the UK and EU sign off on a final withdrawal agreement, rising to 5,000 if no deal is reached. “A lot of those are operational border guards and customs people, but many of them are the kinds of people that we need for implementation,” he said.

However, Manzoni also told the Public Administration and Constitutional Affairs Select Committee that the civil service would “still be short of technical people, commercial people and project management implementation people”.

He said the civil service was having to accelerate recruitment to prepare for the increasing likelihood of no deal.

“We can’t hire those people fast enough, so we have to start really redistributing even more resources. We have redistributed a lot of resources already, but even more resources are necessary,” he said.

Responding to the reports, Garry Graham, the deputy general secretary at the civil service trade union Prospect, said the government knew that a no deal Brexit would be catastrophic.

“The spending which has been announced is only a fraction of the total amount effectively being spent. More and more resources, both people and money, from across the civil service are getting sucked either into DExEU, or into Brexit-related functions within other departments,” he said.

“The government must stop pretending that no deal is an acceptable option. What we need is for the government to give workers and the country some clarity, and if it can’t get its deal through parliament then it has to give the public another vote, with the option to remain on the ballot.”

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