Select Committee on Foreign Affairs Minutes of Evidence

Memorandum submitted by the Foreign and Commonwealth Office

  Question 1:  In 1998-99, The Committee recommended the inclusion of a cost-benefit analysis in each year's FCO Annual Report. Is it the FCO's view that the analytical tables in the appendices provide such an analysis? How can the Committee discover, for example, the return in terms of export earnings on investment in commercial staff at Posts abroad?

  The 2001 Departmental Report sets out costs, and the benefits they buy. The tables in the annexes mainly cover costs. Inevitably, some outputs (eg deterrence, conflict prevention, information gathering, policy formulation) are not numerically quantifiable: their costs are shared across the FCO's network. But the Report for the first time includes, at the start of each chapter, a table showing expenditure by Objective (the Objectives are listed on page 20); and the links between costs and benefits are brought out as clearly as possible. For example, the costs of Invest UK (Table 9 on page 43), can be compared with the results listed on page 40 and the specific successes noted at Figures 1 and 2 on pages 41 and 42. The work of commercial staff abroad is part of BTI's integrated trade and investment support, delivered increasingly through the Internet. Following the 1999 Review of Export Promotion, more attention is being devoted to the development of the UK's exporting base and the exporting skills of UK companies (for further background see BTI's recently published Expenditure Plans Report: Cm 5123). BTI's new performance monitoring arrangements will, over time, enable it to assess more precisely the impact of its programmes, and hence the targeting of its resources to maximise benefit to business.

  Question 2:  What are the internal FCO procedures for the creation of a) new positions in existing Posts overseas and b) new Posts? Who originates these proposals and how; who considers them and by what process; and who decides and how? Is there Treasury involvement at any of these stages?

  Proposals for new positions in existing posts come from the posts themselves (and from business): proposals for new posts come from a wide range of sources: Ministers, business, foreign governments, existing posts and, of course, the Committee. The procedure entails sponsorship by the relevant Command, support by the Board of Management, and the approval of Ministers. HM Treasury are not directly involved. Each case is different; but all involve judgements about priorities for resource allocation, taking account of the need for dialogue with the foreign government concerned or changes in its political relationship with the UK; economic changes, increasing or decreasing business opportunities for UK firms; changes in demand for entry clearance services; the relative effectiveness of coverage on the spot or from a nearby country; costs; and security.

  Question 3:  The Committee wishes to receive a classified paper updating it on measures taken to improve security of those serving at overseas posts, and on the progress of inquiries into the death of Brigadier Saunders. The Committee may wish to pursue any matters arising from this paper in a private session at the end of proceedings on 24 April


  Question 4:  In a letter to my predecessor dated 21 December 2000, Sherard Cowper-Coles informed the Committee that the text of the BTI/DTI/FCO Memorandum of Understanding was being considered by the Treasury and by the NAO. May the Committee have copies of any reports produced by HM Treasury or the NAO as part of their consideration of the Memorandum?

  HM Treasury have confirmed that they are content with the Memorandum of Understanding. The National Audit Office are still considering it. BTI, DTI and the FCO are now operating, on an interim basis, in accordance with it.

  Question 5:  The Committee welcomes the inclusion in the FCO Annual Report of a table summarising progress on the 60 Measures for Change. In the comments on Measure No 30 it is stated that the current plan is for contract signature for a new management information system to take place in "Autumn 2000". Should this read "Autumn 2001"? What is the proposed timetable for full implementation of this system?

  The Committee are correct: the text on measure 30 in Appendix J should have read "autumn 2001".

  The new integrated global Management Information System will deliver real time management information using the new IT infrastructure: the benefits will come on stream over the 2 years following contract signature.

  Question 6:  What progress has been made on recruitment into senior positions of people from the commercial sector? The Committee particularly wishes to know:

    —  in which FCO posts abroad such people are now serving?

    —  at what level and in what capacity they are serving?

    —  what assessment has been made of the success of the policy of such recruitment?

  Staff recruited (or seconded) from the commercial sector are now serving as Consul General and Director of Trade Promotion for Canada in Toronto; as Economic Consul in Frankfurt; as Head of Commercial Section in Ankara; as First Secretary Commercial in Osaka and in Hong Kong, and as First Secretary External Affairs in Washington. The next Director of Trade Promotion in South Africa and Consul General in Johannesburg comes from Shell via the DTI. In London, the Chief Executive of FCO Services; the Chief Economic Adviser; and the Deputy Head of the IT Strategy Unit were also recruited by open competition; as was the Barbados-based Regional Financial Services Adviser, the Head of the Policy Planning Staff came from Oxfam; the Africa Conflict Adviser from the BBC; and secondees from the private sector are working in Management Consultancy Services (PWC), IT Strategy Unit (KPMG), Environment Policy Department (British Airways) and South Asia Department (Standard Chartered Bank). British Trade International, through the DTI, has also undertaken two open recruitment competitions in the last year for posts in the UK: the new Chief Executive of Invest UK was recruited from the private sector, as were six new International Trade Directors for the Trade Partners UK English regional operation.

  BTI also benefits from the private sector expertise of inward secondees from business and industry. Over 100 executives have contributed to the trade and investment promotion effort over the last year, most of them as Export Promoters, working alongside Trade Partners UK Headquarters teams. The Invest UK operation has also benefited from 6 inward secondments, mostly to their North American operation, over the past year. In the same period, a further 10 executives have worked at Embassies and High Commissions overseas under our Short Term Business Attachment Scheme on, eg, oil and gas in Angola, Venezuela and Brazil, multimedia opportunities in Hong Kong, and infrastructure and construction opportunities in Bangkok Airport.

  Open competitions to recruit senior staff with commercial sector experience and other specific skills (eg in IT, financial management), bringing in twenty five officers at senior middle management level, are further strengthening the Diplomatic Service cadre.

  In addition, we have sought secondments to, as well as from, the private sector. Many current senior Heads of Mission have benefited from such secondments, eg to British Gas, SmithKlineBeecham, SCB, BP, Accenture, Unilever, BAE Systems and BP Amoco.

  We are convinced that these initiatives have much improved the service we provide to UK companies. All our posts are now aware that the first customer for their political, economic and market expertise is British business.

  Question 7:  What is the latest position with regard to the prospects for peace in Sierra Leone? Are recent reports that rebels groups are preparing to participate in elections accurate? Is the UN as a whole in Sierra Leone operating as effectively as the British contingent?

  The ceasefire signed in Abuja on 10 November, initially for 30 days, appears to be holding. UNAMSIL has begun pushing east from Freetown into rebel-held areas, allowing the Government of Sierra Leone (GOSL) to extend its authority: it intends to hold elections as soon as the security situation permits.

  But much of the country remains under rebel control. The Revolutionary United Front (RUF), which undermined all previous peace agreements, has not yet laid down its arms and allowed UN and GOSL access to all parts of the country, as it is required to do under the terms of the Abuja ceasefire. President Taylor's regime in Liberia continues to support the RUF and to promote conflict in neighbouring Guinea. The United Kingdom co-sponsored UN Security Council Resolution 1343, adopted on 7 March, which will impose sanctions on Liberia from 7 May if Liberia fails to demonstrate that it has ceased, inter alia, to provide support to the RUF.

  The RUF have yet to take the necessary steps to register themselves as a political party. Documents on electoral plans have been passed to RUF representatives, but rebel groups cannot participate in elections unless they first disarm and demobilise.

  The UN and the United Kingdom share common objectives, and undertake complementary actions, in Sierra Leone. Co-ordination between UNAMSIL, UK Forces and other UK personnel is good, and continues to improve. We have provided 8 headquarters staff to UNAMSIL, including the Chief of Staff, and 15 military observers. On 30 March the Security Council passed a resolution increasing the mandated strength of UNAMSIL to 17,500 troops and authorising a new four phase concept of operations. The increase will enhance the mission's capacity and effectiveness. UNAMSIL is bringing itself up to full strength, with the Bangladeshi contingent nearly complete, and the Pakistani contingent expected to deploy soon, and to be fully in place by July.

  Question 8:  What is the latest position with regard to the Cyprus proximity talks?

  The fifth and most recent round of UN settlement talks took place in Geneva from 1-10 November. On 8 November the Secretary General made a statement to the parties setting out the UN's comprehensive approach to a settlement. This statement was made on the basis of "oral remarks" and the parties were asked not to disclose details. Mr Denktash, supported by the Turkish government, subsequently announced publicly that so far as he was concerned the proximity talks were over, but that he would continue to co-operate with the UNSG's Good Offices Mission. We see no justification for Mr Denktash's withdrawal, and strongly support the UN Secretary General's efforts to resume the process. The UK Special Representative in Cyprus, Sir David Hannay, continues to remain in close contact with all the parties, including the US and UN.

  Question 9:  What has been the FCO's involvement in drawing up the EU Stabilisation and Association Agreement with Macedonia? Are there any plans for further such agreements with countries in the Balkans?

  The UK has championed the Stabilisation and Association process to give the countries of the Western Balkans a perspective of eventual membership of the European Union. During the negotiation of the Stabilisation and Association Agreement (SAA) with Macedonia the FCO played an active role, encouraging the Macedonian government and supporting the Commission and Presidency.

  Other countries are following: Croatia is already in negotiations and should sign an SAA later this year. We are encouraging the Commission to support the efforts of other countries in the region (Albania, Bosnia and FRY) to meet the conditions necessary to negotiate an SAA. The Commission's High Level SAA Steering Group for Albania will report by the end of the Swedish Presidency on its work to help Albania ready itself for negotiations.

  Question 10:  What have been the consequences for UK/China relations of the ongoing dispute between the United States and China concerning the so-called spy plane affair?

  We are pleased that the US aircrew have now gone home, and that the US and China are working for a full resolution of the incident. There has been no impact on UK/China relations.

20 April 2001

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