CONCLUSIONS AND RECOMMENDATIONS
FCO Annual Report 2003-4
1. We
conclude that the FCO Departmental Report 1 April 2003-31 March
2004 is a generally well-presented and comprehensive document,
reflecting the breadth of the Foreign Office's work and the challenging
global situation in which it operates. We particularly welcome
the new 'lessons learned' sections and recommend that they be
developed and made more specific in future reports in order to
present a more realistic picture of the FCO's activities to the
lay reader. (Paragraph 12)
Financial Management
2. We
recommend that the FCO, in its response to this Report, state
how many bids it has received from its Senior Management Staff
for early retirement, whether compulsory early retirements will
be made if the figure of 60-80 voluntary early retirements is
not achieved, and the operational implications for the Department—including
possible losses of embassies and high commissions overseas—of
reducing its Senior Management Staff by 60-80 (Paragraph 20)
3. We
conclude that HM Treasury's recognition of the importance of the
Foreign Office's work and the commitment of resources to specific
areas, such as security, is welcome. We further conclude, however,
that overall the latest spending review settlement will only add
to the increasing financial pressure under which the Office now
operates and which is putting so much of its valuable work in
jeopardy. (Paragraph 21)
4. We
conclude that, while it is right and proper for all government
departments to strive at all times to make the very best use of
taxpayers' money, the efficiency savings agreed as part of the
2004 Spending Review will place a considerable strain upon the
Foreign Office's operations in the coming years. Given the FCO's
significant fixed costs, people-intensive nature and the increasing
demands and expectations being placed upon it, we fear that 'efficiency
savings' will effectively mean cuts in programme budgets. We recommend
that, in its response to this Report, the FCO provide specific,
detailed evidence that it will achieve genuine efficiency savings
in order to meet HM Treasury's targets and not simply cut its
activities. (Paragraph 28)
5. We
conclude that the additional work being carried out by the FCO
in support of the Government's policies in Iraq will remain critical
for some time to come. We recommend that the additional costs
incurred by the FCO in carrying out this work should be met in
full by the Government from the contingency reserve. (Paragraph
31)
6. We
conclude that the United Kingdom's Presidencies of the G8 and
the EU in 2005 represent an historic opportunity for this country
to help set the world's political agenda in a number of key areas.
It would be unthinkable that such an opportunity should be wasted
owing to insufficient funds. We recommend that the Government
ensure that it allocate adequate resources to meet the running
costs of the G8 and EU Presidencies. We further recommend that
the FCO's other activities must not be allowed to suffer as a
result of these additional responsibilities. (Paragraph 34)
UK International Priorities
7. We
conclude that the UK International Priorities White Paper provides
a welcome insight into how the Foreign Office operates and what
its aims and priorities are for the coming years. (Paragraph
38)
8. We
conclude that the FCO is right to seek to make the most efficient
use of its valuable personnel resources and to reap the greatest
efficiencies from advances in modern information and communications
technology. We recommend, however, that the Foreign Office ensure
that, as a result of the changes made following the adoption of
the new Strategy White Paper, there is no diminution in the level
of service provided by the FCO to Parliament and the public. (Paragraph
42)
9. We
conclude that the potential closure of significant numbers of
overseas posts implicit in the UK International Priorities document
is a source of grave concern. We recommend that wherever possible
the FCO seek to maintain as effective and as wide-reaching a network
of posts as possible, in order to protect and promote British
interests around the globe. (Paragraph 50)
Security
10. We
conclude that the attack on the Istanbul Consulate General was
a barbaric act of terrorism, which we condemn utterly and unreservedly.
We again offer our sincerest condolences to all those affected
by the terrible tragedy and especially to the families of those
who were murdered. We offer our highest praise to those who have
worked so hard to cope with the aftermath of the attack and worked
in such difficult conditions. We trust that the sacrifice and
hard work of those involved will be properly recognised by the
Foreign Office. (Paragraph 56)
11. We
commend the Foreign Office for conducting an immediate review
of security at posts following the Istanbul bombing and we broadly
welcome its findings. We conclude, in particular, that the review
was right to warn the FCO against turning its posts into "fortresses"
and "bunkers". The FCO's image and operational capability
would not benefit if contact with the public were decreased, although
the balance it strikes between operational effectiveness and security
must be a very careful one. (Paragraph 62)
12. We
welcome wholeheartedly the extra money provided in the Spending
Review 2004 for security measures. It would have been wholly unacceptable
if extra security measures had had to be funded from the existing
FCO budget, to the detriment of other activities. We recommend
that, in view of the exceptional exposure of FCO staff overseas
to terrorist attack, the FCO should make further requests to HM
Treasury for additional funding for security measures as are necessary
to safeguard its staff during the current three year period, before
the next spending review takes place. (Paragraph 63)
13. We
welcome the recognition by HM Treasury of the need to fund security
improvements for the BBC World Service and British Council in
full. We recommend that the Foreign Office ensure that adequate
resources are available for both bodies to maintain the quality
of their services while ensuring the maximum safety of their overseas
personnel. (Paragraph 67)
14. We
welcome the Foreign Office's thorough review of the travel advice
it issues to the public. We recommend that the Foreign Office
continue making its web pages as clear and accessible to the general
public as possible. (Paragraph 71)
Management of the overseas estate
15. We
welcome the Foreign Office's recognition, in accordance with our
previous findings, that the "asset recycling programme"
should be dramatically scaled down. We commend it for 'biting
the bullet' and missing the artificial target set for asset sales
by HM Treasury, rather than selling off even more valuable properties
for short-term gain. We conclude that it is most regrettable that
this decision was not taken earlier. (Paragraph 78)
16. We
conclude that the Foreign Office's unwillingness to submit its
"asset recycling programme" to effective parliamentary
scrutiny was utterly indefensible and evidence of a lingering
defensive attitude to public scrutiny. We welcome the Foreign
Office's ultimate recognition of the importance of this Committee's
oversight. We recommend, however, that the Foreign Office review
its procedures for withholding information under the Code of Practice
on Access to Government Information, to ensure that they are in
accordance with Government-wide best practice. (Paragraph 83)
17. We
conclude that the "asset recycling scheme" has had a
very serious impact on the Foreign Office's property portfolio,
with valuable buildings that were appreciating in value being
sacrificed on the altar of short-term Treasury-inspired targets.
We further conclude that these sales have left the Foreign Office
more at risk from fluctuations in the international property market
and exchange rates, and may have significantly damaged the long-term
financial strength of its estate. (Paragraph 86)
18. We
conclude that the FCO's claimed "net gain" of £13
million from its Dublin property transactions should more accurately
have been described as a net gain of at least £17 million
being reduced by £4 million (minimum) as a result of the
Department's mistaken decision to sell, only to reacquire, the
Glencairn Residence and to purchase, only to sell, Marlay Grange.
We recommend that, in its response to this Report, the FCO provide
precise figures on how much Marlay Grange is eventually sold for
and the cost of reacquiring Glencairn (net of acquisition costs).
(Paragraph 89)
19. We
conclude that the net loss of £380,000 on the sale of the
New York Consul General's Residence and the purchase of a replacement
residence, noted by Sir Michael Jay, contrasts starkly with the
profit of $8.55 million (approximately £6 million in 2001)
originally envisaged by the FCO when it started this transaction.
Even in the light of the fluctuations in the sterling-dollar exchange
rate noted by the Office, such a loss seems utterly bizarre. This
transaction was undertaken for the purpose of realising a gain
of approximately £6 million and has instead resulted in the
loss of £380,000 and the replacement of a highly prestigious
property by an inferior one. We further conclude that while the
tragic events of 11 September 2001 in the USA could not have been
foreseen, the exchange of contracts on both properties took place
after that date and it seems reprehensible to us that the FCO
proceeded as it did in New York (Paragraph 91)
20. We
conclude that serious mistakes were made during the sale and purchase
of the residences in Dublin and New York and should not have occurred.
Such incidents serve to underline the importance of effective
scrutiny of the Foreign Office's property transactions by Parliament.
We recommend that the FCO set out, in its response to this Report,
how it will ensure that such losses of taxpayers' money are not
repeated in the future. (Paragraph 92)
21. We
conclude that the FCO's judgment to retain the valuable embassy
building in Prague is a very welcome one. We recommend that the
same decision be made with regard to the highly valuable and useful
residence in Cape Town. (Paragraph 95)
Entry clearance
22. We
conclude that the steady rise in visa applications at FCO posts
across the world presents a continuing and significant challenge.
The importance of this work should not be underestimated, not
only owing to the increased security concerns arising from global
terrorism but also because the visa operation is often the first
impression that many people will have of the United Kingdom. We
commend the staff who work so hard in this vital field, often
in difficult circumstances and with little visible reward for
their efforts. (Paragraph 100)
23. We
also commend the Foreign Office for its development of new and
innovative means of coping with the increase in demand, especially
the use of outsourcing in India for the processing of documents.
However, we recommend in the strongest possible terms that decision-making
on the issuing of visas should always remain with FCO staff.
(Paragraph 101)
24. We
conclude that the Foreign Office has performed well against its
PSA targets in relation to the processing of visa applications,
especially in light of the increasing demand with which it is
having to cope. We recommend that the FCO ensure, however, that
the quality of decision making is not sacrificed in the drive
to meet delivery targets. (Paragraph 107)
25. We
conclude that the inability to check whether applicants do actually
abide by the terms of their visas is a significant problem for
the smooth running of the FCO's visa entry clearance system. We
recommend that the FCO develop, as a matter of urgency, means
of providing effective feedback to visa-issuing posts on the outcome
of decisions. We further recommend that, in the longer term, HM
Government, taking advantage of developments in information technology,
introduce a system that would allow it to check who had entered
and left the United Kingdom and when, for the purpose, among others,
of running a more effective visa entry clearance regime. (Paragraph
111)
26. We
conclude that the collection of biometric data by visa-issuing
posts overseas will be an important weapon in the fight against
international crime and terrorism, and will help create fairer
and more effective immigration controls. We further conclude that
the Foreign Office appears to be taking a sensible, gradual approach
to the roll out of this new procedure. (Paragraph 113)
27. We
conclude that it is vital for the smooth running of the visa entry
clearance system that the three departments involved—the
Home Office, the Foreign and Commonwealth Office and the Department
for Constitutional Affairs—work as closely together as possible.
We recommend that the FCO continue to encourage greater co-ordination
between the three departments at all levels, from united training
of personnel to policy co-ordination. (Paragraph 116)
28. We
conclude that the problems encountered by the visa-issuing sections
of the posts in Romania and Bulgaria were very unfortunate; action
should undoubtedly have been taken earlier both by senior FCO
and Home Office officials. We regret that it took a crisis of
this nature for the wider problem of Home Office-Foreign Office
co-operation to be brought to light. We recommend that the Foreign
Office act, in collaboration with the Home Office, to ensure that
the findings of the Sutton Review are implemented fully and quickly.
(Paragraph 120)
29. We
recommend that, in its response to this Report, the Foreign Office
set out its general policy in relation to 'whistle-blowers', and
provide the Committee with any written material regarding relevant
procedures. (Paragraph 123)
Personnel
30. We
recommend that, in its response to this Report, the Foreign Office
set out in detail how it intends to achieve the reduction in civil
service posts outlined in the Spending Review 2004, and what measures
it has in place to support those employees who will be losing
their jobs. (Paragraph 126)
31. We
conclude that the Foreign Office's commitment to employing a more
diverse workforce is very welcome. We also agree with its assertion
that such diversity is essential for the FCO to become more effective
and to serve better the British people. We further conclude, though,
that the FCO still has a considerable way to go in order to meet
its challenging diversity targets, especially in its Senior Management
Service. We recommend that the FCO continue to make every effort
to ensure that it recruits and promotes the best possible people
from the widest range of backgrounds. (Paragraph 130)
32. We
conclude that the continuing practice of different Government
departments offering different pay rates to locally-engaged staff
doing the same jobs is undeniably detrimental to the work of HM
Government as a whole. We recommend that the Foreign Office raise
this matter direct with the Treasury in order to seek a Government-wide
solution to this problem. We further recommend that, in its response
to this Report, the FCO set out how it intends to take this matter
forward. (Paragraph 136)
33. We
recommend that, in its response to this Report, the Foreign Office
set out its policy on the recruitment and employment of specialists
to carry out roles requiring more detailed subject knowledge,
such as in the fields of finance, property and information technology.
(Paragraph 139)
BBC World Service
34. We
conclude that the BBC World Service is doing very well to maintain
its current audience and audibility figures in the face of stiff
competition from other international broadcasters and the difficult
domestic situations it encounters around the globe. (Paragraph
146)
35. We
conclude that the Spending Review 2004 was a disappointing result
for the BBC World Service. At a time when competition from other
international broadcasters is increasing and the need for its
services has never been greater, it is very unfortunate that the
Service should be placed in a position where it may be unable
to undertake the improvements and modernisation it requires to
retain its leading position. (Paragraph 150)
36. We
commend the BBC World Service for the impressive efficiency savings
it has already achieved, and for its commitment to ensuring that
the extra money it receives as a result of the Spending Review
2004 goes directly on front-line services. We recommend, though,
that in future it present a realistic picture to the Foreign Office
and HM Treasury on how much it can genuinely achieve by efficiency
savings, rather than simply allowing its programme budgets to
be cut. (Paragraph 153)
37. We
conclude that the BBC World Service's work in the Middle East
and wider Islamic world is more crucial now than ever, in light
of the current international situation. We recommend that, in
its response to this Report, the Service set out how its plans
for improving its radio service in this area have been affected
by the Spending Review settlement. (Paragraph 157)
38. We
conclude that the failure to launch a BBC World Service television
channel in Arabic represents a missed opportunity to further the
United Kingdom's wider diplomatic ambitions and interests in the
Middle East and wider Islamic world. It is almost certain that
other international broadcasters will take advantage of British
inaction, to the detriment of the BBC World Service and the United
Kingdom. We recommend that the Foreign Office explore with HM
Treasury whether this decision can be reversed. (Paragraph 161)
39. We
conclude that the marked growth in the use of the BBC World Service's
online service is a tribute to its quality, vision and relevance.
We commend those who are working to strengthen and improve it.
We recommend, however, that the highest editorial standards be
applied when using contributions from listeners, especially in
relation to highly sensitive international topics, to prevent
the Service's abuse by those who would wish to misuse it for their
own ends. (Paragraph 164)
40. We
conclude that it is utterly perverse that the future of BBC Monitoring
should be placed in doubt at the very time when its services are
arguably most important to the country's security and diplomatic
needs, and when it is being almost universally praised by its
users. We recommend that BBC Monitoring be given financial security
by the FCO and its other stakeholders to ensure its future. (Paragraph
167)
41.
We conclude that the BBC World Service, its editors and staff,
have an unenviable task of producing considered and unprejudiced
reports in a variety of very difficult circumstances across the
world. In an increasingly polarised world, access to unbiased
news is more vital than ever before and we commend the World Service
for its wholehearted commitment to impartial and honest reporting.
(Paragraph 173)
British Council
42. We
conclude that the Public Diplomacy Strategy Board appears to have
made a positive start in co-ordinating the activities of the United
Kingdom's key public diplomacy players. We recommend that the
Board take the lessons learned from the evaluation of the Think
UK campaign in China fully on board when planning future events,
and that it recognise the British Council's valuable experience
and skills in this field. (Paragraph 179)
43. We
conclude that the By 2010 document sets out ambitious and challenging
targets for the British Council, and we broadly commend its vision.
(Paragraph 182)
44. We
conclude that the settlement for the British Council in the Spending
Review 2004 was a disappointing one, which may adversely affect
the good work it is doing across the globe. (Paragraph 186)
45. We
conclude that the reductions in the size of the British Council's
overseas estate proposed in the latest Spending Review give rise
to considerable concern. We recommend that, in its response to
this Report, the British Council set out the consequences of these
cuts for the level and range of its operations around the world.
(Paragraph 188)
46. We
conclude that the revitalisation of the Chevening Scholarships
proposed by the Foreign Office is a welcome one, which will give
it greater flexibility and allow it be more responsive to the
United Kingdom's wider diplomatic needs. We recommend, however,
that the review should not be used as an excuse to scale down
the scholarships in any way, nor, if possible, to reduce their
geographical reach to students from across the world. (Paragraph
194)
47. We
conclude that the current attitude of the Russian authorities
towards the British Council, seeking to impose a tax charge on
its operations, is neither conducive to good bilateral relations
nor to encouraging the valuable work the Council is doing in Russia.
We recommend that, in its response to this Report, the Foreign
Office set out what progress has been made to resolve this situation.
(Paragraph 197)
48. We
welcome the recent statement by the Secretary of State for Education
and Skills on the registration of EFL schools in the United Kingdom.
Although the majority of such schools are well-run and managed,
the actions of some such institutions have not only damaged students'
perceptions of this country, but also pose a serious security
threat by aiding illegal entry in the United Kingdom. We conclude
that the British Council plays a crucial role in superintending
the work of EFL schools in the United Kingdom and we praise the
work it has done in raising standards. We recommend that the Council
work together with the other relevant Government bodies to ensure
more effective regulation of such institutions. (Paragraph 203)
49. We
conclude that the British Council's new branding fails to project
its purpose and its identity. We recommend that the British Council
provide us with detailed information on the full cost of its rebranding
and that it reconsider its reluctance to use the Union Flag. (Paragraph
207)
50. We
conclude that the ring-fencing of the BBC World Service and British
Council's budgets is vital for the operational effectiveness of
both bodies. We welcome the continuation of the current arrangements
in the latest Spending Review and strongly recommend their future
retention. (Paragraph 211)
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