Select Committee on Foreign Affairs Minutes of Evidence

Examination of witnesses (Questions 95-119)




  95. Sir John, may I welcome you and your colleagues to what is likely to be the last formal session of the Foreign Affairs Committee in this Parliament. We welcome too your colleagues. We have Mr Collecott, the Director of Resources, we have Mr David Reddaway, the Director of Public Services, we have Denise Holt, the Director of Personnel Command and Mr Matthew Kirk, the Head of the IT Strategy Unit. We welcome you not only, as it were, as Chief Executive of the Foreign Office to examine with us the Departmental Report but also as the principal policy adviser. It is the managerial role that we would like to question you on in particular today, Sir John. We notice with gratitude that the Foreign Affairs Committee is actually mentioned in the Report on this occasion on page 71 but not, alas, in the index and we notice a number of omissions in the index. It is a detail but I hope that you and your colleagues will perhaps look again at the quality of the index to what is an improved report on the past examples. Sir John, I would like to begin by looking at some of the personnel matters, the staffing matters. I recall, what, 30 years ago, critics referred to the Foreign Office as the apotheosis of the dilettante and claimed that other foreign services, notably the French, had far more training and were far more flexible in movement from the public to the private sector. Can you help us on this: what in your judgment are the obstacles to the greater use of appointments from and secondments to the private sector which happily has developed over your period very substantially? So what are the major constraints which you see?
  (Sir John Kerr) I think we are a much more professional service than we were 20 years ago, 30 years ago, that is correct. I do not think we were dilettantes then but I think we have improved our professionalism. That means that for some jobs we now do look outside. It also means that those who come to us from outside have to bring something to the party because those inside are more professional than they were. One of the main uses, for example, that we have made of the additional resources we have secured in the last three or four years is on improved training. We are determined to go on being the only major diplomatic service which always has Japanese speakers at the top of the embassy in Tokyo, Chinese speakers at the top of the embassy in Beijing, Russian speakers in Moscow. Linguistic skills are really very important.

  96. That has always been the case?
  (Sir John Kerr) That has always been the case, but with slightly more resources to devote to training, and to devote to staffing us up to our approved establishment, we are now able to release people to do more training in languages and in other professional skills. I think that BTI is a very good invention. I think BTI will improve professionalism in commercial work and inward investment promotion. I think it is highly desirable, and I think it is bedding down well. There are jobs, not just commercial jobs, for which we should be testing the market. We should be attracting people from outside. In the memorandum that I sent you before this hearing I gave quite a long list of jobs that have gone to people from outside.

  97. Mostly on the commercial side.
  (Sir John Kerr) Mainly on the commercial side, though also inside the Foreign Office on the IT side, and also from NGOs, a very desirable recent development. I have been struck how when it comes to an open competition for a job like the head of the trade office in America, which is in New York, or the trade office in Canada which is Toronto or the one in Brazil which is in Sao Paulo or India which is in Mumbai, the private sector does not always produce quite as strong a field as I had hoped. Of these four competitions I mentioned only one was won by someone from the private sector.

  98. Viscount Weir, who we met this morning, perhaps gave us a part explanation for that in that industry/commerce is unlikely to release their first eleven.
  (Sir John Kerr) I think that is the case. I think there is a danger in getting rejects and retreads and those who are for some reason not making it to the top of their company. Another reason is that we do not pay as well as the private sector. On the other hand, I have to admit that we do not have a great retention problem now. Morale is rather high in the Service and the retention problem that we had in the 1970s and 1980s, when we lost, including linguistically very well qualified people, large numbers in mid career to go off to the City or merchant banks, that has almost stopped. We do not have retention problems. I would like people to be better paid obviously. I do not have any difficulty in retaining extremely good people at the salaries we do pay. I think that when bringing in people from outside one needs to strike a balance, is there a particular quality that we need at the price we would pay for an insider? I do not think we should have a two tier salary where in order to attract somebody from outside we pay twice as much to an outsider as we would to somebody from inside. I think the Diplomatic Service has accepted that we need to test the market against outsiders. I think it would be less happy about it if we had differential pricing, if people from inside were automatically paid—

  99. Not even in specific areas like IT?
  (Sir John Kerr) We may have to. IT experts are an extremely expensive commodity and we may have to think about extra allowances or additions or some sort of recognition of the qualifications that they have or gain while with us. In principle, I think the grade of the job should be set by the weight of the job.

Mr Chidgey

  100. Yes. On this question of human resources, Sir John, it has been suggested to us that the glass ceiling that exists on the progression of locally employed staff—I am thinking here particularly of the relevance of linguistic staff—is unnecessarily low in our Diplomatic Service when compared with others. I wondered if you would like to comment on that, the reasons for it, and whether there are opportunities for raising the levels of seniority that locally engaged staff could reach within the Service?
  (Sir John Kerr) Yes, there are Mr Chidgey, I agree with you but the premise of your question is wrong. The proportion of our staff in our Embassies and High Commissions abroad that is locally engaged is far higher than in the French or the German or the American counterpart.

  101. The question was the seniority at which they can reach rather than the principles engaged.
  (Sir John Kerr) It is also true they reach a far higher level in ours than in the French or the German or the American counterpart missions. But I agree with you, I think there is no reason why they should not in some cases go further. When I was lucky enough to be Ambassador in America I had 600 locally engaged staff working for me in 14 posts across America. I did feel that localisation could be taken further. The ratio of locally engaged to UK based staff was already changing. It had been in the mid 1980s two and a half locally engaged to every one UK based, by the mid 1990s it was three and a half to one and by the time I left Washington it was four and a bit to one. We were localising more jobs including obviously more senior ones. I think that you are quite right that is a trend which we can take a little bit further. But we discussed this with the Committee two years ago, or was it three years ago, there is a limit. There are a number of jobs which have to be done by people based in London, people who are Official Secrets Act cleared, people who have a professionalism which includes experience of Whitehall and what Whitehall wants. You cannot go all the way.

  102. I appreciate that. My supplementary question in fact was to try and get a little more detail about the levels at which non UK nationals locally engaged could reach compared with locally employed UK nationals? There would be a distinction, I imagine, I wondered what it was?
  (Sir John Kerr) Not really, to be honest.

  103. No security problems?
  (Sir John Kerr) Not really, certainly not as a global concern, there might be in a particular country.

  104. The nationality of the locally engaged member of staff is not an issue in terms of their promotion prospects?
  (Sir John Kerr) No.

Sir John Stanley

  105. Sir John, in our 1999 Report we gave your Department a wonderful gift ball to hit back to the Committee to tell the Committee and, therefore, the wider world what outstandingly good value for money was provided by the Foreign Office. We said in our recommendation 17: "We recommend that the FCO take more positive and more specific steps to set out to Parliament, to other Government Departments and to the public at large the benefits achieved by the FCO in relation to its cost. Whilst we agree with the Foreign Secretary that any cost benefit analysis will require some subjective judgments, we consider that this perspective is so important to a proper understanding and assessment of the FCO's performance and value that a cost benefit section should be included in the FCO's Departmental Report each year". To which your Department replied "The FCO agrees with the Committee on the importance of the cost benefit perspective in assessing performance, and will include an analysis of costs and benefits in its Departmental Report." Now having offered you this wonderful opportunity I have to say I remain extremely disappointed with the response coming from your Department. We pursued this in a further supplementary question, to which I hope the answers are available in the Committee room and you gave a detailed illustration, for example. You said that: "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 in figures 1 and 2 on pages 41 and 42." I have to say to you, Sir John, any reader who is going to be able to find their way through this thicket to establish the cost benefit of the FCO is going to be in great difficulty. I must come back to you again, can the Foreign Office not in a single section or in a single chapter really start setting out its stall and indicate, recognising there are subjective judgments, what is the totality of the benefits which the UK is obtaining from the relatively extremely small amount of public expenditure going on your Department? I have to say I take the view that you are not beginning to do yourself justice.
  (Sir John Kerr) Naturally I am very grateful to Sir John and to the Committee for their ceaseless efforts to publicise the competence and effectiveness of the Foreign Office. It pleases us greatly. I am extremely grateful for the series of recommendations in the Committee's reports over the four years of the Parliament on areas where we ought in the view of the Committee to be investing more; they have been valuable in our own resource allocation internally, and valuable in obtaining more resources for the Foreign Office. On numerical cost benefit analysis, Peter Collecott is a great believer, Sir John, he believes entirely with you that we could do an awful lot more to put a numerical value on the things that we do. I admit that I have some conceptual difficulties with putting numerical values on quite a lot of foreign policy. How is one to express in numerical terms the extremely important aim of the enlargement of the European Union or the enlargement of NATO? What number shall we set? What is the correct target, a NATO of 23, 24, 25, an EU of 18, 19, 20, 27? You have to make qualitative judgments. You have to bring in judgments which cannot be reduced to a simple cost benefit calculation. I find it very hard to put a pound value on the optimum enlarged EU. We know it is a benefit, to have avoided damage, to have improved these institutions that are important to us and to have improved relations with the countries that are joining, and we hope with minimum damage to relations with the countries that are not joining; but to translate that into a cost in order to do a cost benefit analysis is very difficult. I know that the staffing of our posts in the aspirant countries, the countries that want to join the EU and want to join NATO, are worthwhile, I know that. I am grateful for the help of the Committee in arguing that we should increase the size of these posts. They are not as big as their French and German counterparts but they are bigger than they were four years ago. But I cannot prove to you in a numerical cost benefit analysis that that is the optimum use of the money which you gave us to which we decided to devote to that. I think you have to have a qualitative cum quantitative analysis. On some things you can do it all with numbers and I think in the BTI area David Wright is developing tools which will enable us to do that. I think you are probably right also in your general point, Sir John, that we do not do as much domestic PR as perhaps we should, I think that is probably correct. On the other hand, I think it is a bit of a mug's game if you go out to slap oneself on the back too visibly and audibly, it can do harm. I am very struck that among the young people in final year at university courses we are told that the Foreign Office is, for the first time ever, their number one career choice. 5,500 undergraduates filled us in the forms and made us their number one choice in a survey that is done every year and appears to be a perfectly legitimate exercise. It used to be the BBC that was always first, we are now first. Recruitment is still astonishing. We get 100 applicants for every vacancy at the policy level. Young people clearly do think that it is a worthwhile career and perhaps they think that it gives adequate benefit to the country for the money that is put into it. I agree with you on everything except trying to reduce benefits artificially to numbers.

  106. Without getting into an academic debate about cost benefit analyses can I just put the thought to you that it is commonplace in various forms of cost benefit analysis that not all benefits are subject to quantification. For example, in road schemes you cannot quantify the environmental benefits but there will be environmental benefits, and perhaps the Foreign Office might like to look at that. Could I just ask you one further thing again in the general theme of reader ease and access. The Foreign Secretary, as you know, announced with major publicity the 60 measures for change and the Committee asked for the 60 measures of change to be included in the report. I wonder if I might ask you, for the average reader picking up your report for the first time, how long do you think it might take the average reader to find the location in your report of the results of the 60 measures for change?
  (Sir John Kerr) I have to pay tribute to you, Sir John, because they would not be there at all this time round but for your insistence that they should be.

  107. The question I asked was how many minutes or hours do you think it might take a reader to find them?
  (Sir John Kerr) It would depend whether, like me, he tends to read things from the back or, like you, from the front, Sir John.

  108. It would depend how long it takes to read 151 pages because the 60 measures for change do not feature in any of the contents.
  (Sir John Kerr) It would depend on his diligence and speed.

  109. And your appendices have no headings whatever. I am sure you will bear that in mind for your next edition.
  (Sir John Kerr) I would say that on the 60 measures for change, when you finally reach the text quite a lot of them are in fact overtaken, we have done them, we have moved on. The IT programme, which is the most exciting thing we are doing and which I hope we may talk about in a moment, that is there but it is only the germ of an idea there in that 1998 text; by the time we get on to 2001 we are doing some quite exciting things. We have also developed inside the Foreign Office, with the Committee's encouragement, our Foresight consultation mechanism, which is son of the 1998 exercise. Foresight is very good, with 1,500 young people across the service all contributing their ideas on how we can increase efficiency, and job satisfaction where possible, and that links very closely into the IT on which Matthew Kirk is our biggest investor. I would say that the 1998 exercise was a very important exercise, the 60 measures for change, but it is an historical event now. I personally would prefer to drop it from the Departmental Report. It is there as a tribute to Sir John Stanley.

  Sir John Stanley: I trust it is not a tribute to me, your Foreign Secretary has the authorship of it, but perhaps it might have been easier for everybody if it had been easily accessible from the front of the report. I am sorry you are going to drop it but if that is your decision the Committee may wish to comment on it when it makes its report.

Sir David Madel

  110. You have laid great emphasis, Sir John, on linguistic skills and then you told us that the Foreign Office now is the number one career choice for so many people. Is this because from all you hear the teaching of languages in schools has greatly improved and that careers staff, recognising this, are tilting young people towards applying to join the Foreign Office?
  (Sir John Kerr) To be honest, I do not know. Maybe Denise knows what motivates the young people. I think it is partly adventure. I think it is partly the fact that we are widening our network and opening posts in very exciting places. I do not know that there is a higher proportion of good linguists joining us. We are perfectly happy to take brilliant people and teach them languages, we do not insist as much as the French or the Germans do, to be honest, that new recruits come with very good languages. Denise, do you want to address this?
  (Mrs Holt) There are a couple of other things I could say on it, if I may. One is that we do not insist on languages but we have increasingly emphasised in our advertisements and our publicity material that we would particularly welcome people with certain languages where we find that there is never enough to maintain supply. For example, Chinese would be one of those languages where there has been a considerable growth in our requirement for Chinese speakers, so we have sought to recruit people with ready made Chinese as well as grow our own. We do test all applicants for their hard language capability and then we train them, so there is not a strict correlation between the quality of language teaching in schools and the number of people applying to the Foreign Office; I am sure there is not. What I would say, having just come from a couple of weeks interviewing final selection board candidates, is that the main driver that I detected, and a number of my colleagues would have found the same, was a real interest in the world beyond our shores, which is extremely heartening, a real interest in the issues of the day, and a real interest in the moral issues underpinning those. So there was considerable interest in the ethical dimension as well as in the foreign policy itself. These are young people and, as you would expect, these are the things that motivate them when they are 21, 22, 25, 26. They are motivated by the things you would expect young people to be motivated by, I think.

  111. Is there a real interest in Britain playing a greater role in Europe?
  (Mrs Holt) All of them had read the website and the mission statement so they realised that the correct answer to the question is to promote British interests in the world, so if you asked them the question, yes. I did detect a real interest and enthusiasm in Europe and in the world. We did have people, for example, of British-Asian origin or Caribbean extraction, so their focus was not in every case on Europe, it was also on other parts of the world.

  112. Can I ask a question about management of your resources and the way that has changed. On the question of United Kingdom election observers, some are now recruited with selected NGOs, so in a sense you have left the day-to-day management of how it is done to NGOs whereas before it was done much more centrally by the Foreign Office. Are you satisfied with the way that is developing and the way that is being carried out? Does the Foreign Office have regular checks on whether the NGOs are doing it in the way that you would expect them to?
  (Sir John Kerr) Yes, I think we are satisfied, Sir David. The usual check is the post in country which has a look. Election observers, of course, come in different categories. Some come from this Parliament, some come through the OSCE, some come from the EU. It is something to which we attach considerable importance. We probably finance more observers than most countries do. Yes, we have found with particular NGOs that a degree of subcontracting has worked very well.

Mr Illsley

  113. Sir John, a question which has often caused us controversy within the House relates to entry clearance posts and the cost of visa applications. As you know, the Committee has gone out of its way to visit entry clearance posts on as many occasions as we can on our visits abroad and it is one issue that is quite often put to us, particularly in poorer countries where the proportion of the cost of the visa application is quite high, for example Pakistan and India. In the Annual Report it states that receipts from visa fees have been subject to real term cuts and that they are now static at £95 million. I just ask whether the Foreign Office can continue the improvements within the entry clearance field whilst maintaining visa fees at that level, or do you anticipate that perhaps there will be increases in the future? As a follow-on to that, is it likely to continue the policy that each post will be self-financing in terms of visa fees or could there be some differentiation between more wealthy countries and perhaps the poorer countries in terms of the level of fees?
  (Sir John Kerr) Thank you, Mr Illsley. Could I also say thank you very much for visiting our new Joint Entry Clearance Unit on the Embankment. Your interest in going to see the new operation was much appreciated. I think it is a very good idea, that new joint unit, which is Home Office/Foreign Office jointly staffed, and now which directs the operation. Mr Illsley is quite right, the operation is meant to be self-financing. We are not trying to make a profit out of entry clearance but we are trying to cover the costs of the operation. It is not meant to be self-financing post by post or officer by officer, it is meant to be self-financing in aggregate. I cannot make a sensible prediction, I do not think, subject to correction from David Reddaway, because I do not know whether the demand will go on rising. If the demand goes on rising it is possible that the costs will rise and the fee will have to rise. Demand is rising rather steeply and the costs have been held down rather well. David, would you like to pick that up?
  (Mr Reddaway) The objective remains not to increase the fees, but the fact is we have faced 7 to 8 per cent growth, and in some of the posts, 20 of the posts, we have had growth of over 20 per cent in demand. So there is tremendous pressure on the operation.

  114. This is at the same time as there is continuing pressure to improve the quality of the service offered in terms of time taken to deal with a particular application.
  (Mr Reddaway) That is right. The story so far, since JECU has been set up, has been a very good one of doing both those things. I think the performance has improved.

Mr Maples

  115. I wonder if I ask you to go into more detail about the structure of the Foreign Office organisation. I suppose traditionally one looked at the Foreign Office in geographical terms but more recently there are thematic issues which cross national and even regional boundaries—terrorism, the environment, water resources, weapons of mass destruction, ethnic conflict is an obvious one—it is not just the Balkans or East Timor or the Great Lakes of Africa, yet I notice of the 13 commands, seven are geographical, four are what one might call internal and actually only two, Global Issues and International Strategy, seem to deal with the thematic issues in the way I am describing it. Am I right in that? Do you think these thematic issues are dealt with in a transregional or non-geographical worldwide way in the way they ought to be within this structure?
  (Sir John Kerr) We have a degree of creative tension quite deliberately between the man responsible for the delivery of one of our central objectives, the objectives which are set out in the central nine chapters of this Report, and he is a Deputy Secretary and can be found in the middle of the chart on page 10, and the Directors who are listed round the perimeter of the chart. So if the issue is Human Rights, there is a man in the middle who is responsible for that and who is in a way the sponsor of the Human Rights policy Department which comes under Ms Brewer and Global Issues at the top of the page. If it comes to a conflict, say with international security policy, which it could do—a clash with those working to Mr Ehrman on the left of the page—or with somebody responsible for good relations with Ruritania, who would be a geographical director, then conflict resolution should take place in the office of the Deputy Secretary. So that is the role of the guys in the middle of the chart. That is a static analysis. Long term, Mr Maples, I think you are absolutely right. I think long-term we are moving away from a Foreign Office which was basically a geographical structure to one which pays more and more attention to thematic issues and cross-cutting issues and which involves itself more and more in the business of other bits of Whitehall as well. As more and more of Whitehall becomes international the Foreign Office ought to be there advising them, targeting them, helping them. So in recent internal resource allocations we have not been increasing the size of the geographical departments, we have been increasing the size of the science and technology staff or the human rights or the environmental policy staff. Global Issues Command, Miss Brewer, at the top of the page, has risen by 26 officers in the last three years and will go up by another eight this year, whereas the geographical departments if anything are contracting slightly. If I bring in the way technology will take us, I think that this contraction will continue because, once we have a global network on line, the geographical expertise more and more will reside in the post and will be instantly tappable by anybody elsewhere in the network. The geographical department, when I joined it ages ago, used to correspond with the post and build up a library in London and a store of knowledge about the country and the region which was tappable when required for a policy decision or advice. I think we have moved away from that. When it will be possible to press a button and get the advice on the country, its politics, its economy, its prospects, who is rising, who is falling, instantly from the post, the role of the geographical department will contract further. So if you take a long-term trend, you are absolutely right, already we are moving in that direction. We will still need to have some regional and geographical expertise at headquarters but we are moving in a more thematic direction.

  116. Some of those things you can do with telephones and e-mails and you can do a lot of this tapping of local knowledge already. What I was interested in, if one looks at the post-Cold War world the potential sources of conflict are about these things, are they not—ethnic conflicts, fights over water resources, environmental issues, national and economic issues. You mentioned human rights and I thought the way you dealt with that was interesting but could we take something like ethnic conflict? When Kosovo blows up or when East Timor blows up, in the Global Issues section or the International Security section is there somebody who looks at ethnic conflict as a discrete discipline or subject or area of knowledge which would be drawn on by people who are trying to frame the Balkan policy or policy in Indonesia where an ethnic conflict looks as though it might blow up?
  (Sir John Kerr) The crises tend to be handled by the Political Director or the geographical Director for the area where the crisis occurs. Static analysis. Dynamic analysis, yes, that is exactly what we want to be able to do, and one of the good things IT will give us more and more is the capability to call on the man who dealt with a particular issue during the Kosovo crisis and apply it in next year's crisis. He may by now be in Chicago but we will be able to tap his expertise on how such an issue was dealt with, getting this right is the knowledge management aspect of new IT. We need to change our working practices to enable us to do that. We have tended in the past to be a bit departmentalised in the way we handle a crisis. We get together a brilliant crisis management team, they do brilliantly, as they did over Kosovo or East Timor, and when the crisis is over with a bit of luck we remember to get one of them to write down approximately what they did and how they did it, and they disperse; and then another crisis arises and we create a new team. We have not had on the whole what you are talking about, ready access to people experienced in ethnic conflict reconciliation techniques. We do not necessarily need to have a lot of them at headquarters all the time, they may be better deployed using their expertise dealing with some conflict on the ground, but we need to be able to draw on that expertise in future crises, which is one of the great virtues of our wonderful new IT investment.

  117. Do you think in five years' time, if we were having a similar meeting, this structure chart would look different?
  (Sir John Kerr) As I say, I think we shall always want to retain some geographical expertise at the centre. Knowledge of countries, the knowledge of their languages, knowledge of how an idea will play there. That is what the Foreign Office brings to the party in Whitehall policy formulation. Although a lot of it can come online, you need to have somebody who visibly knows what he is talking about, to turn up at meetings in Whitehall and present it. I do not think this will change enormously but I think behind it there will be the same sort of continuing adjustment of staffing which I described at the start, the extra 26 people in global issues command.

  118. So International Security and Global Issues will become more important during this process, will they?
  (Sir John Kerr) They will; and so also I think will David Reddaway's Departments, which lie in between the two of them on the chart, Public Services. We have a growing customer base. There is a 9 per cent a year increase in demand for our consular services around the world. We have talked about the 8 per cent increase in demand on our entry clearance procedures. David's job has grown enormously and will go on growing.

Mr Rowlands

  119. As preparation for this session we decided to subject ourselves to a couple of witnesses who are producing alternative views about diplomacy. We started this morning with Mr Mark Leonard, who I suppose you are familiar with, he is on the Task Force. He has a pamphlet on going public in the information society, in which he says the nature of global communications matters as much to foreign policy as talking to governments, and he elaborated on that theme by saying that through the internet and the amazing information technology scene it is reaching beyond governments to publics, and that is going to be more and more the nature of diplomacy. At one moment he said almost there could be a case for virtual embassies. How much have you taken on board or rejected Mr Leonard's view about the nature of your Foreign Office diplomacy in the information society?
  (Sir John Kerr) I think it is a very elegant re-invention of the wheel. Embassies have always had such a role. While they exist to talk privately to governments, they also exist to talk to people and populations at large, and that is probably the modern ambassador's principal function, to be on television, to be on the radio, to accept all the platforms. Our website in posts abroad—about 90 posts abroad now—have an enormous interest and it is very, very important. There is that audience out there. I do not think there is anything terribly new in this and if anything the moral I would draw is that we need to develop in our people, if they do not have it when they join us as a professional skill, not just the ones we have been talking about but platform skills and communications skills. We are not shut away but we never really were. Talking to the world was always part of the job of the diplomat abroad. Of course at home he is self-effacing, quiet and well-behaved.

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