House of Commons - Foreign Affairs

Select Committee on Foreign Affairs Ninth Report

NINTH REPORT

The Foreign Affairs Committee has agreed to the following Report:—

FOREIGN AND COMMONWEALTH OFFICE ANNUAL REPORT 2001

Introduction

1. Each Spring, the Foreign and Commonwealth Office (FCO) produces a Departmental Report on its performance over the previous 12 months. These Annual Reports also contain financial and budgetary information, including projections of spending over the conventional 5-year planning period.

2. Each year, this Committee conducts a short inquiry into the latest FCO Annual Report[1] and produces a Report of its own.[2] This year's inquiry, carried out in the expectation that Parliament will soon be dissolved, has been conducted within a somewhat shorter timescale than we would have wished. Nonetheless, we have been able not only to receive written evidence from the FCO in response to specific questions we posed, and from others, but also to hear oral evidence from Mr Mark Leonard,[3] Viscount Weir[4] and Professor Simon Reich,[5] as well as from Sir John Kerr KCMG and senior officials from the Foreign and Commonwealth Office.[6]

3. Last year, the scope of our evidence and Report[7] included the Annual Report of British Trade International (BTI). That part of our inquiry was conducted together with our colleagues on the Trade and Industry Committee. In the short time available, it has not been possible to hold a joint hearing this year and we have therefore thought it best not to include BTI's Annual Report[8] in this inquiry. We leave any possible scrutiny of that Report to our successors in the next Parliament.

Form and content of the Annual Report

4. Overall, we are pleased to note that there have been improvements in the presentation of information in the Annual Report and believe that our own Reports may have made some contribution to those improvements. Of course, the usefulness of an Annual Report may be enhanced or compromised by the quality of its contents pages, cross-referencing and indexing. For example, the FCO Annual Report 2001 does not list its 12 appendices on the contents page, which means the reader must consult all of them in order to discover what is the subject of each. And while we recognise that select committee Reports have no index, where a document such as the FCO Annual Report has an index it should at least be a useful index.

5. The index to the Annual Report 2001 is not particularly useful. It contains only two references to the United States, neither of which includes the references on pages 40, 41 and 42 to inward investment in the United Kingdom by companies from the United States. In the perhaps unlikely event that a reader is seeking references to Greg Dyke or to The Gap, they can readily be found. But the reader who is looking for those parts of the Report which deal with entry clearance, peacekeeping or conflict diamonds will search the index in vain. We recommend that greater thought be given when preparing the FCO Departmental Report 2002 to making the index more comprehensive and more relevant to the types of queries which readers are likely to have, and that the title of each appendix is reproduced on the contents page.

6. The Annual Report contains an appendix listing the 60 Measures for Change, which represent a series of commitments entered into by the Foreign Secretary in 1998, presumably not lightly.[9] The list is included, as Sir John Kerr made clear, only because this Committee requested that it should be. Our disappointment that the Measures should have been consigned to an anonymous appendix at the very end of the Annual Report was compounded by Sir John's declaration that he would have preferred not to include them at all, on the grounds that they are "an historical event now".[10] Many of the Measures have indeed been achieved or superseded; but about a third have not. We recommend that a list of those 19 of the 60 Measures for Change which, on the FCO's own reckoning, have yet to be completed be retained in next year's Annual Report.

7. A chart on page 10 of the Annual Report presents the organisational structure of the FCO in diagrammatic form. The various FCO geographical, functional and administrative commands are depicted as the sectors of a circle, at the centre of which are shown the members of the Board of Management, each with their respective titles listed. What is not clear from the chart, although Sir John explained some of it in oral evidence,[11] is the relationship between the members of the board and the commands. We believe that this omission makes it difficult for the reader to form an opinion on the extent to which the FCO's structure assists or hampers it in meeting its objectives. We recommend that in future editions of its Annual Report the FCO include a description of how its organisational structure functions, how the various components relate to each other, and of the responsibilities of each member of the Board of Management.

Finance and asset management

RESOURCE-BASED ACCOUNTING AND BUDGETING

8. This year's Annual Report follows closely the format of last year. As we have previously commented, it is particularly helpful to have financial information in real terms, and we welcome the inclusion in parts of the Report of such data alongside the cash and resource-terms information. However, we do not find the majority of the financial information easy to use or sufficiently detailed. We would prefer to be able to see at a glance past and projected expenditure for each of the commands, and for each major post abroad. Such information would provide readers with an indication of shifting and relative priorities. We recommend that the FCO review how it presents financial information in its Annual Report, with a view to making that information more accessible, more detailed and more relevant to the concerns of those who are likely to use the Report.

9. What is clear from the financial information in the Annual Report is that whether measured in cash, real or resource terms, core FCO expenditure[12] has risen over the past year, for example in real terms from £866 million in 1999-2000 to £952 million in 2000-01.[13] Much of this rise is due to increases in provision for peacekeeping operations, which are up from £93 million to £133 million. The FCO's projected expenditure (or "resource plans") after 2001-2002 is expected to fall,[14] although it is of course difficult to predict future spending requirements on peacekeeping.

10. The shift to resource-based accounting and budgeting produces effects more fundamental than those on the presentation of information. As Mr Peter Collecott, Director of Resources, said: "the incentives to look very carefully at what our capital stock is and the degree to which not only the current expenditure that we make but also the capital we are employing are being employed effectively in pursuit of our objectives—that has got to be what it is about—and therefore the degree to which we have to look at selling some assets and buying other assets. It also has positive incentives in terms of decisions not so much for residences but more for offices and should we rent or should we buy."[15]

THE FCO ESTATE

11. The process described by Mr Collecott was reflected in the press release accompanying publication of the Annual Report 2001, in which the FCO placed some emphasis on the phrase "from bricks to bytes".[16] These words symbolise the claimed shift from the old diplomacy, with grand properties in foreign capitals, to a newer, 'public' diplomacy in which information technology and modern communications systems play an increasingly important role.[17] The implication is that as inappropriate embassy buildings are sold off, funds are released for investment in new technology.

12. This Committee has enthusiastically supported the FCO in its successful campaign to be granted independence from Treasury rules on the payment of receipts from property sales into the Consolidated Fund. We have welcomed the Treasury's decision to allow the FCO to reinvest a significant proportion of these receipts—an average of about £30 million per year is being reinvested under this derogation.

13. However, it would not be correct to imply that most of the funds thus liberated from Treasury control have been spent on new technology. Most of the funds have in fact, as one would expect, been spent on new buildings to replace old: not so much bricks into bytes as bricks into concrete and glass. We do not quibble with this; posts abroad need to operate from suitable premises and it is self-evident that, where a building is disposed of, it will in most cases be necessary to acquire another in its place. As we have previously noted, when the Pound is strong, there is an incentive to buy rather than to rent.[18] Some of the new buildings show what can be done. The intelligently refurbished embassy in Tallinn represents the welcoming, open-door style of diplomacy; and the new embassy in Berlin is a stunning example of contemporary architecture which projects an image of a modern and exciting Britain.

14. The new building in Berlin was the first embassy to be built under the Private Finance Initiative. It is managed according to a unitary contract, subject to an innovative 'performance payment system'.[19] We suggest that the experience of both the construction and occupancy phases of this building should be fully appraised to see whether they offer useful models for other projects of this kind. Such an appraisal should be made public.

15. Other buildings are less modern. Sir John Kerr described the Residence of the Consul General in San Francisco as "slightly old-fashioned"[20] and wondered aloud whether "its sort of home counties 1920s atmosphere is exactly right for Silicon Valley."[21] Those of us who have had the privilege of visiting the Residence in San Francisco have received a very direct impression of the excellent value for money which it represents. Significantly, the Chief Executive of British Trade International, Sir David Wright, described the Residence as "an integral part of our operation."[22]

16. It is of course possible that another property might offer better value for money, but any decision on whether to relocate the Residence should be taken only after a full assessment of the costs and benefits, and should not be determined by a judgment that the present building is "slightly old-fashioned". The striking and modern edifice in Berlin, which we have already praised, might impress somewhat less if removed to Silicon Valley, where the "Great Missenden image"[23] stands for the traditional quality and dependability of British business and diplomacy alike. Whilst we strongly endorse continuing and close scrutiny by the FCO of the cost-effectiveness of its real estate, we recommend that the Department remain very mindful that buildings of distinction in key locations can contribute materially to the effectiveness of British diplomacy in the contemporary world.

NEW TECHNOLOGY

17. Notwithstanding the expenditure on real estate, there is also a significant investment under way in new technology. Sir John told us that the FCO Telecommunications Network (FTN) project is "the biggest single contract the Foreign Office have ever signed."[24] When completed in April 2003, the Network should allow 99 per cent of FCO staff to communicate directly with each other and to share information, wherever they are. Sir John described the introduction of modern information and communications systems as "the most important thing for us to do, because it improves the efficiency of everything else we do."[25]

18. The scale of investment in the FTN—£165 million over ten years[26]—and the poor track record of information systems procurement in much of the public sector are such that Parliamentary scrutiny of the project will be of particular importance. The FCO is already committed to providing this Committee with six-monthly updates on its IT and communications strategy.[27] We recommend that in its regular update reports to our successor Committee on IT and communications the FCO include a full cost-benefit analysis of the FTN, the new management information system, and any other major information technology or communications project.

19. We questioned FCO officials about procurement of and support for desktop information systems. Mr Matthew Kirk, Head of the FCO IT Strategy Unit, described the system whereby stocks of spares are held at most overseas posts and technically qualified people are available to fix faults which cannot be fixed remotely or by users.[28] Mr Kirk told us that "for the sort of faults that you expect to have fairly commonly on these systems, we ought to be able to fix them certainly within half a working day."[29] We recommend that in its Autumn 2001 report on IT and communications to our successor Committee the FCO include full information on the steps it is taking to minimise downtime due to faults on desktop information systems awaiting repair and on the extent to which it is meeting the half-day target for repairing such faults.

COST-BENEFIT ANALYSES

20. In our 1998-99 Report on FCO Resources, we recommended the inclusion in each year's FCO Annual Report of a cost-benefit analysis.[30] We found nothing in the Annual Report 2001 which purports to provide such an analysis, so we asked the FCO in writing how we could discover the information. In reply, the FCO told us that the Report "sets out costs, and the benefits they buy."[31] At the start of each chapter of the Report there is a table in which "the links between costs and benefits are brought out as clearly as possible." We do not accept that these links are in fact "brought out as clearly as possible" in the tables. More to the point, the tables and accompanying text contain no analysis of costs and benefits, and in tacit recognition of this the written reply makes no reference to the term 'analysis'.

21. The FCO has previously undertaken to "include an analysis of costs and benefits in its Departmental Report",[32] so we suppose there is no opposition on the part of the FCO to such an analysis in principle. Sir John suggested that he had "some conceptual difficulties with putting numerical values on quite a lot of foreign policy. ... You have to make qualitative judgments. You have to bring in judgments which cannot be reduced to a simple cost benefit calculation."[33] We agree, but we have not asked for a simple, numerical exercise which does not include qualitative judgments. We accept, as we have previously accepted,[34] and as is the case in a range of analyses where environmental or other unquantifiable benefits have to be assessed, that a cost-benefit analysis of British foreign policy will contain qualitative and even subjective judgments. We recommend that the FCO implement its previous undertaking to include an analysis of costs and benefits in its Departmental Report. This analysis should include within its scope the British Council and the BBC World Service.

FCO staff

22. The Diplomatic Service's greatest asset is its people. At £201,263,000 in 1999-2000 and £195,476,000 in 2000-2001, staff costs account for less than one sixth of the FCO's total net operating costs.[35] It is the Diplomatic Service staff who, literally, represent the United Kingdom abroad. We have previously stated, and the FCO has accepted, that greater efforts should be made to increase representation of women and ethnic minorities, especially in the more senior positions. Women are now better represented in policy and senior management positions than they were: in 1997 they formed 5.8 per cent and in 2001 they form 8.5 per cent of the total.[36] In 2000, 57 per cent of those recruited into the fast stream were women.[37] Over time, and provided retention rates remain good, promotions should ensure that approximately half of those in senior positions are women.

23. The position with regard to ethnic minority staff, while improving, is less satisfactory. We have been disappointed on our visits to posts abroad to encounter very few senior staff from the ethnic minorities. We note with approval that recruitment into the fast stream is currently healthy, at 7 per cent of the total.[38] We hope that percentage will increase further. However, it is not clear from the information in the Annual Report how big is the pool of such candidates, and therefore what is their success rate relative to candidates from other backgrounds. We recommend that in its response to this Report the FCO set out any information available to it on the percentage of applications received in each of the last two years from members of ethnic minority groups, for recruitment into the various grades.

24. We have also previously expressed our desire to see in the Service more suitably qualified people from the private sector.[39] In doing so, we were echoing the comments of the present Foreign Secretary who said when in opposition that "As Foreign Secretary, I will want to find out whether there are people in British industry with experience and success in exports who might make suitable ambassadors to some countries with strategic markets."[40]

25. To date, no such people have been found, or at least none has been appointed at Ambassador level. In written evidence, the FCO provided a list of senior positions below Head of Mission—mainly in the commercial area—which have been filled by people seconded from the private sector, including NGOs.[41] When the Permanent Under-Secretary appeared before us, we asked him why there had been no appointments or secondments at the highest level. Sir John commented that "the private sector does not always produce quite as strong a field as I had hoped"[42] and added that "Testing the market has not revealed many businessmen ... who are prepared to take what are seen in our Service as very good jobs, at salaries which the businessmen see as not very good."[43]

26. Viscount Weir, who as a businessman involved in international trade has more than 30 years experience of FCO posts and services, stressed that the quality of those who work in the posts or provide the services is more important than their numbers.[44] While showing some enthusiasm for the secondment to the private sector of diplomatic staff, he further hinted that greater use of secondments in the contrary direction might not be entirely to the benefit of the United Kingdom's diplomatic efforts.[45] In his view, companies are "very unwilling" to release their key people.[46] The corollary of this is that those who are released may be "rejects and retreads and those who are for some reason not making it to the top of their company",[47] and may in any case take a disproportionate amount of what may be a short secondment to adjust to the Foreign Office culture. The Permanent Under-Secretary quite rightly places great emphasis on the professionalism of the Diplomatic Service.[48]

27. In our view, at the most senior levels it is only the best people who will be good enough and we are certainly not in favour of secondments from which the FCO (as distinct from the secondee) derives little benefit. We therefore agree with the Permanent Under-Secretary that "when bringing in people from outside one needs to strike a balance". We acknowledge with approval that "the Diplomatic Service has accepted [the] need to test the market, involving outsiders"[49] and we recommend that it continue to pursue open recruitment and secondment policies wherever outside experience can add to and not detract from the professionalism of the Service.

28. Although salaries in the Diplomatic Service may lag behind those in parts of the private sector, we were encouraged to learn from the Permanent Under-Secretary that "We do not have retention problems."[50] The Diplomatic Service Families' Association—from whom we would have welcomed somewhat fuller evidence—flagged up the issue of "satisfying employment for spouses" as a matter of concern,[51] but they provided no evidence of the extent to which this may be a problem. Mrs Denise Holt, Director of the FCO's Personnel Command, assured us that "there is no evidence that this is causing us serious retention problems."[52]

29. This surprised us, because in 1999 the FCO undertook to "continue to look for ways to improve the situation of spouses and will keep the Committee informed of progress."[53] An absence of retention problems is not the same as an improvement. We are therefore a little sceptical of the assurances given in oral evidence. We recommend that in its response to this Report the FCO inform us of progress made in improving the employment situation of spouses.

LOCALLY-ENGAGED STAFF

30. Not all those who serve this country abroad are sent from the United Kingdom. In fact, in some posts locally-engaged staff outnumber home-based staff by more than four to one.[54] Mark Leonard supported the increasing use of such staff: "One of the positive things about recent years has been the growth in the use of locally-engaged staff who ... know the ground very well. They speak the languages. They have a very good sense of what the priorities are."[55] Some of these staff will be United Kingdom nationals, but the majority are likely to be nationals of the country in which the post is located and they are all likely to be cheaper to employ than home-based staff.

31. We commented in 1999 on the balance between home-based and locally-engaged staff.[56] We feel the present balance is probably about right, but we are not convinced that the opportunities offered by use of locally-engaged staff are being fully utilised. We recommend that the FCO consider whether there are any more senior roles in which locally-engaged staff might be used to advantage.

SECURITY OF STAFF OVERSEAS

32. We heard oral evidence from the Permanent Under-Secretary the day after the inquest into the death of Brigadier Stephen Saunders in Athens in June 2000 had recorded a verdict of unlawful killing. That terrible event underscored the vital importance of ensuring through a process of constant review and the taking of precautionary measures that the United Kingdom's representatives abroad are adequately protected from terrorist or criminal attack. We asked Sir John whether he now has the resources necessary to fund such protection. Sir John told us that the Treasury had provided him with the funding he had requested and that "On the best professional advice, we are spending adequate money."[57] We entirely accept that such judgments must depend on the best available advice. We recommend that if the FCO receive professional advice that the threat to overseas posts or their staff has increased, the resources necessary to meet that threat should be made available without delay.

Relations with Parliament

33. We note that the Departmental Report this year includes, as we requested, appropriate reference to this Committee and to its Reports.[58] We were also pleased to be told that preparations for induction courses for new Members of Parliament are in hand.[59] On two other aspects of the FCO's relationship with Parliament, however, we wish to offer more detailed comment.

PARLIAMENTARY QUESTIONS

34. The FCO has previously committed itself to the target of replying in substance to all Parliamentary Questions tabled for answer on a named day on the day named, or within one week where the information requested is not readily available.[60] Sir John told us that the latest figures show that 8 out of ten such Questions are answered on the day named, and that 93 per cent are answered within one week of the day named.[61] The figure for answers given on the day named represents a regrettable worsening of performance, down from 85 per cent in 1999-2000.[62] There is nothing to suggest that the week's period of grace, which it is intended should apply only in cases where information is genuinely unavailable in time, is being used as an excuse for not answering on the day named.

CORRESPONDENCE WITH MEMBERS OF PARLIAMENT

35. There has been a more serious problem with replies to Members' correspondence, much of which relates to entry clearance cases. As is stated in the Annual Report, "2000 was a demanding year for JECU's[63] Correspondence Unit ... the average rate of response within the 15-day target for MPs' letters was only 50%, against the target of 90%."[64] The FCO itself knew this was not good enough and it appears that the actions it has taken following criticism by this Committee and others have achieved results.

36. According to Mr David Reddaway, Director of Public Services, "since the turn of the year we have acted on the advice the Committee gave, and we have over 91 per cent response rate on time, and I think that 75 per cent of the letters which we did not deal with within the precise limit were answered within three days of that, so the performance is really significantly better."[65] We congratulate the JECU Correspondence Unit on its success in meeting its target and wish it well in its efforts to sustain its performance.

Some thoughts on the nature of modern diplomacy

37. Part of our purpose in inviting independent witnesses from outside FCO circles to give oral evidence was to discover the extent to which today's diplomacy is able to implement the FCO's mission statement "to promote the interests of the United Kingdom and to contribute to a strong world community."[66]

38. Mark Leonard, Director of the Foreign Policy Centre, has developed a theory of "public diplomacy", by which is meant a more direct interaction between a country's foreign service and other countries' (or regional, global, etc.) populations and non-governmental organisations. Mr Leonard suggests that "Traditional diplomacy is as important as it has ever been [but it] should be supplemented with a whole new tier of diplomacy."[67] As part of this new tier, Mr Leonard advocates greater reliance on new technology, with "regional hubs" servicing "virtual embassies" using the internet to communicate more directly with people and with NGOs.[68]

39. We put some of Mr Leonard's points to Sir John, who responded that they represented "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."[69] We are not altogether convinced by this. New developments in information systems offer opportunities for engaging in a style of diplomacy which has not previously existed. An embassy always had to have its ear to the ground to anticipate changes which might affect United Kingdom interests, but it appears that the FCO is now moving towards exploiting the opportunities for diplomacy opened up by new technology and towards broadening the skills base of its staff, as Mr Leonard acknowledged.[70] This process will need to continue if the effectiveness of the United Kingdom's diplomacy is to be maintained or improved.

40. Widening the issue from diplomacy somewhat, we also explored with Sir John the shift in the British Council's priorities away from a physical presence in some areas where it has traditionally or even recently been particularly active—such as Western Europe and South America—and towards a "hub and spoke"[71] model which makes greater use of new technology to provide its services on-line. Our successor Committee will be in a position to judge whether Sir John's assertion that "the British Council have made some difficult decisions quite correctly"[72] is correct.

41. Our second witness, Viscount Weir, appeared to be generally satisfied with the FCO. He had high praise for the calibre of the Diplomatic Service and for the advice he and his business colleagues had received.[73] Apart from suggesting greater coverage of the former CIS countries and Latin America, where he felt trading opportunities were not being exploited to the extent he would wish to see, Lord Weir had no changes of substance to propose in the way the FCO represents the United Kingdom abroad.

42. On the other hand, Professor Simon Reich, Director of Research at the Royal Institute of International Affairs, challenged some of the underlying assumptions about British foreign policy. Many of his most interesting comments, for example about the 'special relationship' between the United Kingdom and the United States, are beyond the scope of this inquiry. However, Professor Reich also commented on the FCO's organisation and priorities.

43. The Professor's thesis of "globalisation"—to which Mr Leonard also subscribes—is that modern diplomacy should be organised on a functional rather than on a geographic basis.[74] He pointed to themes which can be traced across the world, where similar forces and influences produce comparable outcomes. When invited to describe how the United Kingdom's diplomacy should be changed to deal with these global issues, Professor Reich proposed a shift in emphasis from promoting British values (the British Council) to promoting British trade (British Trade International); and a refocusing of resources from bilateral to multilateral efforts.[75]

44. We discussed globalisation with the Permanent Under-Secretary, who said that "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."[76] It is only in the long-term that the results of this process can be judged, but it is at least encouraging that issues such as globalisation are apparently being addressed. However, we would not support robbing the British Council to pay British Trade International: each should be funded to the appropriate level, on its merits.

45. Having dipped our toes in the waters of the debate about the future direction of diplomacy, we recognise that there are important issues to be discussed and resolved within and outside the Foreign and Commonwealth Office. Parliament will wish to be part of that debate, but this necessarily brief Report is not the place to engage substantively in it. Nonetheless, our initial impression is that the FCO is well aware of the issues and is in many cases already moving in the direction advocated by reformers without diluting its traditional strengths and values.

Conclusion

46. It is fitting that our final Report of this Parliament should look at the work of the Foreign and Commonwealth Office in the round. We are thus presented with an opportunity to place on record our appreciation of the support we as a Committee and as Members of Parliament have received from posts abroad and of the quality of evidence supplied by the FCO in London.

47. As well as having its primary security role, the FCO is charged with the task of promoting trade abroad to boost prosperity at home; protecting the quality of life; and furthering human rights and democracy. In striving to meet all its goals, the FCO's long-term judgments and its short-term decisions alike have to be right. If it is to make the right judgments and take the right decisions, the FCO must be adequately resourced. In particular, it must continue to be served by staff of the highest intellectual calibre, who can bring to their roles breadth of experience and soundness of judgment.

48. The primary objective of the FCO is to "ensure the security of the United Kingdom and the Dependent Territories and peace for our people by promoting international stability, fostering our defence alliances and actively promoting arms control."[77] As Sir John Kerr told us: "If we fail on that priority, it does not really matter about the rest."[78] Diplomacy is a key resource in meeting that objective in a world where threats have been multiplying, are increasingly complex, and are more difficult to predict or to pre-empt. The work of the Foreign and Commonwealth Office is thus becoming more important, and is likely to become more important still. Parliament generally, and the Foreign Affairs Committee in particular, will have a major role in exercising vigilant and critical oversight over the FCO's efforts to achieve its stated objectives in a turbulent and ever-changing world.

SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS

We recommend that greater thought be given when preparing the FCO Departmental Report 2002 to making the index more comprehensive and more relevant to the types of queries which readers are likely to have, and that the title of each appendix is reproduced on the contents page (paragraph 5).

We recommend that a list of those 19 of the 60 Measures for Change which, on the FCO's own reckoning, have yet to be completed be retained in next year's Annual Report (paragraph 6).

We recommend that in future editions of its Annual Report the FCO include a description of how its organisational structure functions, how the various components relate to each other, and of the responsibilities of each member of the Board of Management (paragraph 7).

We recommend that the FCO review how it presents financial information in its Annual Report, with a view to making that information more accessible, more detailed and more relevant to the concerns of those who are likely to use the Report (paragraph 8).

Whilst we strongly endorse continuing and close scrutiny by the FCO of the cost-effectiveness of its real estate, we recommend that the Department remain very mindful that buildings of distinction in key locations can contribute materially to the effectiveness of British diplomacy in the contemporary world (paragraph 16).

We recommend that in its regular update reports to our successor Committee on IT and communications the FCO include a full cost-benefit analysis of the FTN, the new management information system, and any other major information technology or communications project (paragraph 18).

We recommend that in its Autumn 2001 report on IT and communications to our successor Committee the FCO include full information on the steps it is taking to minimise downtime due to faults on desktop information systems awaiting repair and on the extent to which it is meeting the half-day target for repairing such faults (paragraph 19).

We recommend that the FCO implement its previous undertaking to include an analysis of costs and benefits in its Departmental Report. This analysis should include within its scope the British Council and the BBC World Service (paragraph 21).

We recommend that in its response to this Report the FCO set out any information available to it on the percentage of applications received in each of the last two years from members of ethnic minority groups, for recruitment into the various grades (paragraph 23).

We acknowledge with approval that "the Diplomatic Service has accepted [the] need to test the market, involving outsiders" and we recommend that it continue to pursue open recruitment and secondment policies wherever outside experience can add to and not detract from the professionalism of the Service (paragraph 27).

We recommend that in its response to this Report the FCO inform us of progress made in improving the employment situation of spouses (paragraph 29).

We recommend that the FCO consider whether there are any more senior roles in which locally-engaged staff might be used to advantage (paragraph 31).

We recommend that if the FCO receive professional advice that the threat to overseas posts or their staff has increased, the resources necessary to meet that threat should be made available without delay (paragraph 32).

The primary objective of the FCO is to "ensure the security of the United Kingdom and the Dependent Territories and peace for our people by promoting international stability, fostering our defence alliances and actively promoting arms control." As Sir John Kerr told us: "If we fail on that priority, it does not really matter about the rest." Diplomacy is a key resource in meeting that objective in a world where threats have been multiplying, are increasingly complex, and are more difficult to predict or to pre-empt. The work of the Foreign and Commonwealth Office is thus becoming more important, and is likely to become more important still. Parliament generally, and the Foreign Affairs Committee in particular, will have a major role in exercising vigilant and critical oversight over the FCO's efforts to achieve its stated objectives in a turbulent and ever-changing world (paragraph 48).

1 Foreign and Commonwealth Office 2001 Departmental Report, Cm 5110, hereafter "Annual Report". Back

2 Foreign and Commonwealth Office Resources, Fifth Report of the Foreign Affairs Committee, Session 1998-99, HC 271; Annual Reports of Foreign and Commonwealth Office and British Trade International 2000, Fifth Report of the Foreign Affairs Committee, Session 1999-2000, HC 507. Back

3 Director, Foreign Policy Centre. See QQ1-19. Back

4 Chairman, Balfour Beatty plc. See QQ20-47. Back

5 Director of Research, Royal Institute of International Affairs. See QQ48-94. Back

6 See QQ95-193. Back

7 Annual Reports of Foreign and Commonwealth Office and British Trade International 2000, Fifth Report of the Foreign Affairs Committee, Session 1999-2000, HC 507. Back

8 Cm 5123. Back

9 Annual Report, pp. 152-154 (Appendix J). Back

10 Q109. Back

11 Q115. Back

12 i.e., not including the British Council or BBC World Service. Back