The Department for Transport (DfT) has cancelled the no-deal ferry contracts it signed in the run-up to 29 March at an estimated cost of about £50m to the taxpayer.

In advance of what was supposed to be Brexit day, the DfT arranged contracts worth tens of millions of pounds to carry essential freight and goods in the event of a no-deal Brexit.

Brexit has been postponed, but these contracts have not. Several ferry companies have confirmed to Sky News that they have been cancelled altogether and they now will now recoup the costs under termination clauses agreed in the contracts.

In February, the National Audit Office estimated that the cost of cancellation would be some £56.6m. Sky sources within the Department for Transport say the total figure "will be around 10% less", or approximately £50m.

Image: The government cancelled its contract with Brittany Ferries and DFDS

Speaking during the Commons liaison committee, Mrs May confirmed that the government had cancelled the contracts, but would not reveal the full cost to the taxpayer, saying: "We've decided to cancel the contracts with Brittany Ferries and DFDS, these contracts were vital contingencies... they both included early termination fees to ensure we would not have to pay the full contract cost in the event capacity was no longer needed."


Ferry companies have gone to considerable lengths to rearrange their schedules and shipping arrangements to accommodate the government.

A source from one ferry company told Sky News: "Since December we have changed our schedules, added 20 weekly sailings, disrupted 30,000 passengers and hired more staff, all to be ready for what is now not needed.

"The consequence for DfT is that they have to accept that the termination clauses now apply.

"Which means - yes - paying a proportion of the original contract costs (which take account of the costs we have incurred to prepare)."

Image: It is the latest blunder for Transport Secretary Chris Grayling

If the government starts to prepare for no deal again - Brexit is currently due to take place on 31 October - then departmental sources say new contracts would have to be taken out at an additional cost.

A Department for Transport spokesperson said: "We are reviewing contingency plans to ensure costs to the taxpayer are minimised and are already selling additional ferry capacity back to the market."

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This is the latest blunder for the DfT and its beleaguered secretary of state Chris Grayling. The department had to settle £33m with Eurotunnel at the beginning of March to settle a lawsuit over extra ferry services in the event of a no-deal Brexit.

Responding to the move by Mr Grayling, Labour's shadow transport secretary Andy McDonald said: "Chris Grayling's approach to procurement has costs taxpayers tens, if not hundreds of millions of pounds. His career has left a trail of scorched earth and billions wasted. This country cannot afford Chris Grayling."

In turn P&O Ferries are suing them over this settlement, under EU law.