House of Commons - Foreign Affairs

Select Committee on Foreign Affairs Written Evidence

Letter to the Second Clerk of the Committee from the Parliamentary Relations and Devolution Department, Foreign and Commonwealth Office, 14 June 2004

Thank you for your letter of 13 May. The following are the answers to the Committee's questions.

1. Could the Office provide further details of the review of security at its posts? Who is carrying out the reviews; what outside expertise is being utilised (from both outside the Office and outside Government); when will the initial review of all posts be completed; how have security needs be balanced against other factors, such as accessibility and location; from where will the additional resources required for any upgrading of security alterations come? (p 9)

The review of FCO security is now complete and is being considered by Ministers and senior officials. Our intention is to send the full, classified version to the Committee shortly. The issues raised in this question are addressed in the report. Security measures form an important element of the FCO's SR2004 bid.

2. How has the impact of the "Think UK" campaign in China been assessed; what feedback was received? How will future campaigns learn from the experience of this one? (p 23)

ASSESSMENT OF THE IMPACT OF THE CAMPAIGN

We are forwarding to the Committee the final report on the Think UK campaign. The report evaluates the campaign against core objectives and draws lessons for future public diplomacy campaigns. It does this using performance indicators, analysing the outcomes of impact, partnerships and leverage, and process and management via media monitoring, audience and stakeholder feedback surveys, general public opinion polls and participant feedback from members of the target audience directly exposed to campaign activities.

WHAT FEEDBACK WAS RECEIVED?

The Think UK campaign achieved an exceptionally high level of media coverage despite the difficult media environment at the time, partly caused by SARS. 43% of the coverage conveyed its core messages. Key media statistics include:

— 2,251 print articles;

— 262 TV and radio reports June-December 2003;

— 270 online features;

— 18 hours TV broadcasts of short features;

— 398 million print media circulation;

— 1.6 billion potential TV audience;

— £3.2 million equivalent advertising in print media;

— £1.6 million equivalent advertising from 11 media visits.

Page 34 of our Departmental Report—'Benefits' section—shows the results of Gallup audience feedback surveys at ten Think UK events: high levels of customer satisfaction amongst the target audience, and events contributing to improved perceptions of the UK.

Audience participation figures show that Think UK events engaged a large proportion of the target audience. Key statistics include:

— grand total c 4.5 million, which includes all visitors, competition entrants, Think UK website and gamezone and supporting events;

— four million visits to the Interactive Gamezone;

— two million visits to the Sina.com Think UK page;

— 296,000 exhibition visitors;

— 180,000 visits to the Think UK website;

— 167,521 Internet projects;

— 36,582 participants in wrap-around events;

— 12,000 competition entrants.

The Campaign commissioned two opinion polls among 18-35 year olds before and just after the campaign. Its results included a 7% increase in people who feel the UK values its cultural ties with China but a similar decrease in overall favourability towards the UK. The polls provide limited evidence for measuring the impact of Think UK activities as it is relatively unlikely that the sample will have directly experienced campaign activities.

HOW WILL FUTURE CAMPAIGNS LEARN FROM THE EXPERIENCE OF THIS ONE?

The final report on the Think UK campaign has been widely circulated among stakeholder organisations. Lessons drawn from the report, which will inform future practice, include:

— Stakeholders must commit and plan early as campaigns have long lead times.

— Stakeholders must clarify their expectations and resource commitment early on.

— The Campaign Director should be appointed and target audiences, themes and objectives also be defined at the planning stage.

— Campaigns should agree with stakeholders a few focused messages to promote.

— Budgetary procedures must be established early on to ensure firm resource management.

— Sophisticated media evaluation and extensive polling of those exposed to campaign activities is more useful for evaluating campaigns than general public polling.

— Future campaign organisers should create and maintain a database of contacts so that relationships can continue to be built after the campaign ends.

3. What "research into international opinion" has the Public Diplomacy Strategy Board drawn upon in the last year? (p 24)

In addition to the International Tracking Study in October 2003, which benchmarked perceptions of the UK in 15 countries against key competitors, research (primarily relatively low-cost focus groups of key "cosmopolitan" target audiences, rather than polling) has played a key role in helping to target our public diplomacy activities. The Committee will wish to note that copies of the International Tracking Study are being placed in the Libraries of the House today.

This includes public diplomacy campaigns such as: Think UK Campaign (China 2003); UK Science and Technology Campaign (North America, 2004); Crossroads For Ideas Campaign (Central Europe Accession States, 2004); Entente Cordiale (France 2004); plus possible future initiatives in the Middle East and Japan (linked to Expo 2005).

4. To what does the BBC World Service attribute the "dip" in its audience size for 2002-03 in Asia/Pacific, Eurasia and Europe? On what basis does it predict that the figures will rise again in the latter two areas in 2003-04? (table 2, p 31)

The overall picture is that the BBC World Service faces a continuing challenge in maturing markets with increasing competition from domestic radio and from other media, but it continues to perform well relative to its major international competitors. A particular issue is that most of the radio audience falls registered have come as audiences have turned away from Short Wave to FM, which in some markets has been difficult or impossible for the BBC World Service to access.

In Asia/Pacific the BBC World Service's audience is under growing threat from increased media competition—liberalisation and the consequent spread of local competitors, and the significant increase in satellite/cable TV access. A critical factor has been the decline in Short Wave usage and the corresponding difficulty for the BBC World Service—for political and regulatory reasons—of accessing FM frequencies (though this is gradually changing in markets like Pakistan and Bangladesh).

In EurAsia the BBC World Service now finds itself broadcasting to a market which is increasingly sophisticated and where consumers are more likely to turn to domestic broadcasters for news. Foreign broadcast news is a niche market. Again, Short Wave usage is falling rapidly and local FM distribution has been beset by obstacles.

In Europe, the BBC World Service is the market leader in a market where there are virtually no direct competitors. But the decline reflects increasing maturity of the media market, together with the loss of one key re-broadcasting network in Romania.

ON WHAT BASIS DOES IT PREDICT THAT THE FIGURES WILL RISE AGAIN IN THE LATTER TWO AREAS IN 2003-04?

2003-04 is the first year of the new SR period. The predicted rise in audiences in EurAsia and Europe are PSA targets which have been agreed a long way in advance and which, under existing target-setting practice, linked to three-year SR periods, cannot be adjusted once agreed. All PSA targets for the three years of SR 2002 (2003-04, 2004-05, 2005-06), including those for the BBC World Service's global audience, had to be in place by March 2003. The BBC World Service's global audience targets were agreed in January 2003. They were based on 2001-02 data, which was the most recent data available at that time from which to extrapolate new targets. It was on the basis of that data that the Foreign and Commonwealth Office agreed with the BBC World Service what were judged then to be realistic but challenging targets for 2003-04 and beyond. We understand that the BBC World Service will publish audience data for 2003-04 soon.

5. What are the "agreed milestones for 2003-04" relating to the Office's PSA target to contribute to the reduction of opium production and poppy cultivation in Afghanistan? When is it anticipated that cultivation and production will actually begin to fall? (p 61)

General milestones for 2003-04 were agreed by the Department at the start of 2003 as follows:

1. The establishment of baseline data for the five and 10 year targets:

versus

2. Introduction of anti-drugs legislation:

— The Afghan Government approved anti-drugs legislation in October 2003.

3. Training of Afghan law enforcement officers:

— The UK has been instrumental in setting up the Counter Narcotics Police of Afghanistan within the Ministry of Interior and providing its officers with specialist training. Some 170 officers have now been trained by HMCE including a specialist stop and search unit. Further training and additional stop and search units will become operational this year. The UK has also provided some support and advice to the Afghan Special Narcotics Force which has begun operations to interdict trafficked drugs and remove drugs stockpiles and laboratories.

4. Anti-drugs awareness strategy established;

— In 2003 the Afghan Counter Narcotics Directorate, with UK assistance, implemented a public awareness campaign. This included broadcasting Islamic-based counter-narcotics messages on a variety of Kabul and provincial radio stations and drugs story line programmes through the BBC.

5. Customs facilities established at Kabul airport:

— There are basic customs facilities at Kabul airport and DfID have been working on customs capacity building with Germany, who lead on police and border police reform within Afghanistan. Relatively little opium is likely to be smuggled through the airport and therefore FCO and HMCE are working closely with Germany to make further progress on Customs controls at land borders. This was one of the topics discussed at a conference on policing reform held by Germany in May 2004 in Doha.

More detail on what the Afghan Government, UK and international community have achieved this year can be found in the Action Plans for the key strands of counter narcotics activity that were agreed at the ATA/UK/UN International Counter Narcotics Conference on Afghanistan held in February 2004 in Kabul. These Action Plans identify priority areas to increase the perception of risk amongst traffickers and farmers and to accelerate provision of alternative livelihoods.

It is difficult to predict with any certainty when cultivation and production of opium will begin to fall. We know that our target remains a challenging one. Experience in other countries such as Thailand and Pakistan, which had much lower production levels and were much more secure countries, shows that cultivation tends to increase before it decreases.

6. How is progress towards PSA 4 measured and what data is used? When will the information be available, and how is it possible for FCO management and readers of the report to assess whether the Office is "on track" to meet this target during the year if all data is retrospective? How is work towards this target divided up and co-ordinated between the three departments involved? (p 62)

The basis for assessing progress towards SR02 PSA 4 is set out in the attached Technical Note. It is not yet possible to give a formal assessment of performance against this PSA target since the beginning of the SR 2002 period (ie from April 2003) because the appropriate statistics on deaths, refugees and internally displaced persons (IDPs) are only available annually on a retrospective basis. The first analysis of these statistics will be available in summer 2004.

The Africa and Global Conflict Prevention Pools have however delivered a range of interventions during this period to support the prevention, management and resolution of conflict under regional and thematic strategies. Examples include:

GLOBAL CONFLICT PREVENTION POOL

Afghanistan

Balkans

Small Arms Light Weapons

AFRICA CONFLICT PREVENTION POOL

Sierra Leone

Great Lakes

Sudan

Angola

Nigeria

Other Countries

Conflict Prevention is a difficult area in which to measure outcomes. A peace settlement can take many years to be consolidated. Even when it is clear that a settlement has been achieved, it is hard to attribute the specific contribution made by UK funded programmes and associated diplomatic, development or defence activity. There is concern that the statistical basis for measuring the SR02 Conflict PSA does not capture all the beneficial impacts of the three Departments' work in tackling conflict. Discussions are currently taking place to refine the PSA target under SR04 including the use of more qualitative indicators to measure performance.

Further information on the operation of the Global Pool is available from a joint FCO/DFID/MOD booklet ("The Global Conflict Prevention Pool") available on the FCO website (http://www.fco.gov.uk/Files/kfile/43896—Conflict%20Broc,0.pdf).

7. (a) Given the footnote to the two tables illustrating the work of UKTI on page 70 of the Report ("These figures include projects with and without UK Trade and Investment involvement"), how is it possible to assess accurately the impact of UKTI on inward investment activity? (p 90)

UK Trade and Investment's Inward Investment Group (IIG), markets the UK abroad as an investment location, working with its partner agencies in Wales, Scotland, Northern Ireland and the RDAs in England. IIG's key role, with its regional partners, is to pull together the efforts of both the public and private sectors to ensure that the best case is made for the UK as an investment location and to also ensure that potential investors have access to all the available help and advice they need to make the best commercial decisions. The UK's inward investment promotional effort combines both national and regional agencies in one co-ordinated network.

IIG therefore helps specific investments but also markets the UK to investors more generally. That is why the report gives a figure of 709 for all investments where these are known.

IIG also monitors figures for investments specifically aided by the UK network. The network comprises UKTI, the RDAs and inward investment agencies of the Devolved Administrations. IIG UKTI leads and guides the network and provides some £13 million per annum to the RDA "Single Pot". The figure for network-assisted projects in 2002-03 is 382.

IIG UKTI also monitors the number of jobs provided—34,875 in 2002-03 of which 20,716 are new jobs.

What are the reasons for the apparent fall in UKTI's income noted in Table 5 in the period 2002-03?

Part of UKTI's income is derived from recoveries of grants payable under the Overseas Project Fund [OPF]. These are recovered when a company is notified that its bid has been successful. In 2002-03 the value of successful bids was considerably lower than the previous year. OPF was closed to new applications early in 2003-04 in line with a shift in UKTI's objectives.

In addition, demand under the Export Marketing Research Scheme was lower in 2002-03 than 2001-02, resulting in reduced receipts.

The income from chargeable services did not contribute significantly to the fall in receipts from 2001-02 to 2002-03: in 2001-02, income from chargeables amounted to £811,000, in 2002-03, it amounted to £809,000.

8. (a) What is being done to bring performance back on target, in relation to the PSA 5 delivery standard of "At least 50% of new-to-export firms assisted improving their business performance within two years"? Will remedial action incur any additional expense? (p 74)

The wording quoted in this question taken from our Departmental Report should actually have read "At least 50% of established exporters" rather than "new-to-export firms". We regret this error. We are currently exceeding our target of 30% of new-to-export firms assisted improving their business performance within two years.

Regarding the established exporter target, it should be noted that assessment is made over a two-year period and that the survey looks at firms which have received our services 6-24 months earlier. Improvements have been made to UK Trade and Investment trade services over the past year focusing support on higher value interventions, it is anticipated that these will bring beneficial results. There will be further improvements in 2004-05. Additionally, we are currently arranging for an analysis of past data to establish a profile of those firms which have failed to report sustainable improvements in competitiveness (productivity/innovation etc) to allow us to address any issues.

Remedial Action will not Incur Any Additional Expense

Could you supply the data currently missing from the table on page 74, relating to the third delivery standard?

Actual performance reported in the 2003 survey for this measure was 61%. Whilst this falls short of the target figure, the result does represent a 3% increase on the 2002 results. UK Trade and Investment is working to engender further improvements to attain this challenging target.

9. Why has the allocation of resources to the Drugs and Crime Fund (DCF), as part of the Global Opportunities Fund (GOF), apparently been reduced for years two and three of the current spending review period? (p 82) How will this impact on the planned expansion of the work to combat drug trafficking highlighted on page 60 of the Report?

The £3 million allocation to the Drugs and Crime Fund indicated in the GOF Programme Budget bar chart on page 82 is a contribution from GOF to the Drugs and Crime Fund's (DCF) £70 million Afghanistan Drug Strategy. Dave Thomas, Head of the GOF Central Management Unit, met with the Second Clerk recently and talked him through the detail of GOF deductions and contributions.

10. Could you provide the scorecards used to measure progress towards the targets relating to PSA 7, in confidence if necessary? (p 92)

The scorecards used to measure progress against PSA 7 are attached. Scorecard (a) (increased democracy and the rule of law) is unclassified and has already been published. The others are classified but included here on an "in confidence" basis.

11. How is the Office seeking to tackle its failure to make progress towards the last element of its PSA 8 target—"greater support for Europe in the UK"? (p 106)

The FCO has focused on activities which are high-profile, have a high multiplier effect, and are economical in resources (ie cheap in themselves or capable of attracting significant sponsorship), given the scale of resources available (in 2003-04, £200,000 for domestic EU Communications work). Over FY 2003-04 the FCO organised or was involved in over 130 such events. Activities include:

— business seminars, cultural events, college/university talks, radio phone-ins and public debates;

— a series of publications has been produced, focussing on the recent expansion of the EU—including regional booklets that set out the regional benefits of EU enlargement;

— a dedicated website is also regularly updated with information;

— the Minister for Europe has led a series of UK regional events, involving other Ministers, to ensure people across the country have a chance to get involved in discussing EU issues.

All these activities are monitored, and feedback is sought upon them, in the form of questionnaires and public correspondence.

12. What has been the impact of the cancellation of the inter-active voice recognition (IVR) system on the rest of the relevant budget, and the Consular Division's efficiency savings? Has anything been recovered from the project's capital investment? What lessons have been learned from the project's cancellation? (p 112)

The impact is a write-off in 2003-04 of £168,000 as compared to a depreciation figure that would have been in the region of £54,000.

We cannot demonstrate financial efficiency savings. However, our decision not to use the IVR system and to go with the MM call centre resulted in us delivering a more effective service to the public.

We have been actively seeking to recycle the hardware (servers) and continue to do so.

One lesson learnt was that very close involvement by the business side is needed with the project team to ensure that the specification to which the project is delivering has not changed.

13. When will the GenIE-Worldwide system be fully rolled out? What will be the total cost of the new system, once fully delivered, and how is it being funded? (p 118)

The GenIE Worldwide system rollout was completed on 6 December 2003, with the exception of four posts that were awaiting connection to the FTN. The last of three of these was completed in May. The fourth, West Jerusalem, is pending confirmation of its FTN/Firecrest status following a move to new offices.

The capital cost of GenIE Worldwide is £1.7 million, from the FCO Vote. Running costs are recovered through overseas passport fees.

14. Have all posts now supplied the data relevant to the PSA 10 targets, listed on page 122 of the Report? If so, do they affect the overall performance figures printed in the Report? (p122)

We received 232 out of 247 post Returns for 2002-03 data and have not chased the last few. We would not expect their data to alter the performance figures as given in the Departmental Report. The remainder consist of four Honorary Consuls and one Liaison Officer; the Cameroons, Libya, Uzbekistan, Bulgaria, Hamburg, Geneva, Abuja; and one Overseas Territory-the Falklands Islands. We are now concentrating on the 2003-04 Consular Annual Return data that has started to come in.

15. The Report sets out the average performance by posts against PSA targets relating to visa services. For the first three targets listed on page 124 of the Report, could you provide details of the three best and worst-performing posts, in order to give the Committee a picture of the range of service delivery performance provided by the Office? (p 124)

Target 1: straight forward non-residence visa applications to be decided within 24 hours. Target: 90%, achieved: 92.14%

Mumbai, (69,509) Chennai (37,509) and Dhaka (16,007) decided 100% of their straight forward applications within 24 hours. Nine other posts also reported a 100% success rate but dealt with fewer applications.

Rangoon only decided 35% of its straightforward applications within 24 hours. Maseru decided 42%. The Visa Section has now closed and applications are submitted via Pretoria. Rio de Janiero decided 47% of applications within 24 hours. The Post had a 65% increase in applications in the last nine months of the year.

Target 2: Posts to make a decision within 10 working days on non-settlement applications requiring an interview. Target: 90%, achieved: 88.79%

Kolkata, Canberra, Kampala, Chennai, Los Angeles, Baku, Belmopan, La Paz, Nuku, Alofa and Victoria decided 100% of these applications within ten days.

Kinshasa failed to meet this target throughout 2003 and the queue was between 21 and 90 working days. Freetown also failed to meet this target and averaged a queue of 14 days over the year. Abidjan and Tashkent failed to meet the target for 10 months of the year. Following temporary closure of the Visa Section last year, Kinshasa had to work through a backlog and had a temporary member of staff until a permanent replacement could arrive. Freetown had a 16% increase in applications. Backlogs accumulated until an additional member of staff arrived. Abidjan have now moved into a new building from previously poor accommodation. They and Tashkent had high refusal rates and low-quality applications. Tashkent had a 20% increase in applications.

Target 3: Posts to meet target times for settlement interviews. Target: 90%, achieved: 98.31%

The majority of Posts have few, if any, settlement applications and have no difficulty in meeting the PSA target timings.

Addis Ababa failed to meet this target throughout the year, with queues ranging from 28 to 54 weeks. This queue is mainly made up of Somali applicants, applying to join their families in the UK and they often lack proper identification.

Dhaka failed to meet this target for four months of the year with queues between 15 and 29 weeks. This was largely due to an increase in WHM (Working Holiday Makers) and SBS (Sector Based Scheme) applications during this period.

Lagos failed to meet this target for three months of the year with queues of between 15 and 16 weeks over this period.

16. Could you provide details of the take-up of online visa applications in the countries where it is now available? What percentage of applications are now made online in each country? Where is it envisaged that the facility will be expanded to next? When is it anticipated that the pilot for online payment will be completed? (p 124)

e-Applications is the system whereby applicants in some locations are able to complete and submit their visa application form over the Internet. The key benefit for the applicant is the simplicity of the process: only questions relevant to the application type are asked (eg, only students are asked questions relating to studying in the UK) and the applicant receives guidance and advice as they move through the process. The key benefit for UKvisas is a saving of around three minutes for every application received this way, primarily because data can be captured automatically into the local visa issuing database.

The system is currently available in the following locations:


Location	Take up rate

Ottawa	28%
New York	70%
Wellington	56%
Canberra	26%
Paris	15%
Pretoria	10%

Other locations operating e-applications for which the take up rate is unavailable at time of writing, include: Chicago, Los Angeles, Hong Kong, Kingston, Helsinki, Dusseldorf and Madrid. Tokyo is just about to begin receiving e-applications and Dublin is scheduled to follow in June.

Approximately 22 additional countries are being considered as possible next locations for e-applications, including: South Korea, China, Iceland, Brazil, Chile, Saudi Arabia, UAE, Kuwait, Iceland and other EU countries.

The next stage is introducing an e-payment facility. Following a contract awarded to "World-pay", a pilot for e-payments was recently completed in Ottawa. E-payment is now available in Ottawa, New York, Chicago and Los Angeles It is hoped to introduce e-payments at other locations where applications can be received over the Internet.

17. When does the Office expect to introduce outsourcing in Kenya, Nigeria and Malaysia? Will the arrangements in those countries differ in any significant way from those seen by Members of the Committee in India? (p 125)

We expect to introduce outsourcing in Malaysia and Kenya this summer. The operation in India provides a model for our rollout of outsourcing but there will be some differences according to local requirements. For example, in Nairobi we intend to introduce the capture of biometric data and the outsource partner will assist in collecting this data.

In Nigeria, and as a first step to full outsourcing, we intend to introduce a courier assisted visa application system for accepting, checking and submitting applications and returning passports. The experience gained by Post and the companies involved will allow us to develop a fully outsourced service, which we plan to introduce by the end of the financial year.

18. Could you provide the Committee with the figures for the number of UK visa applications 1998-2007, given in Chart E on page 125 of the Report? (p 125)


Year	Forecast	Outturn

2007	2,726,537
2006	2,548,165
2005	2,381,463
2004	2,225,666
2003	2,080,062	2,115,000
2002		1,946,651
2001		1,758,829
2000		1,674,110
1999		1,514,764
1998		1,462,599

The graph and figures were calculated in November 2003 and at the time we expected an increase of 7%, which had been the average over recent years. Thus we multiplied the preceding figure by 1.07 to reach the next estimated total. The actual increase in applications for 2003 (April-December) was 11%.

19. What is the planned roll-out for the collection of biometric data by visa-issuing posts? Which posts will be next to be upgraded and when? How will this impact upon the Office's outsourcing programme? (p 127)

Biometric data is currently collected in Colombo, Addis Ababa, Asmara, Dar-es-Salaam, Djibouti and Kampala.

We expect to start fingerprinting visa applicants, subject to legislation having cleared Parliament, in Kigali in late July or early August 2004 and in Nairobi in September 2004. This will complete the implementation of the East Africa Biometrics Project.

We currently have no firm plans to commence fingerprinting visa applicants elsewhere but the UK is committed to implementing an EU regulation, providing for mandatory biometrics in visas by 2008. A study is under way at present to produce a strategy to enable UKvisas to implement this regulation in all visa-issuing Posts.

Biometric data capture should have no direct effect on our outsourcing programme. It has been incorporated successfully into the outsourced visa application process in Kampala in March 2004 and will be integrated into the visa application process in Sri Lanka and Kenya, when they are outsourced in the coming months.

20. Could you explain why the "delay to Prism should ensure a better end-product for HR as we implement it during 2004-05"? (p 159)

The delay to the Prism HR module has allowed time for the design to be more closely aligned with the FCO's operational requirements. The bulk of the HR module is due to come on-line in June, and will allow for more automation of some key tasks, principally the FCO's system of selecting staff for posts, which should produce savings in staff costs and improved service delivery.

21. A significant proportion of FCO's administration costs are asset related charges-depreciation, cost of capital charge, impairment arising from revaluation (Note 3, Resource Accounts 2002-03). Are these costs included in the baseline against which the 2.5% efficiency savings are measured, and, if so, what steps is the Office taking to secure savings in these charges? In addition, what proportion of the total 2.5% efficiency savings does the FCO expect will be non-cash savings? (p 163)

Non-cash costs are part of the FCOs Resource DEL (Departmental Expenditure Limit) and hence are included in calculating our efficiency target. These charges are a reflection of the quantity and quality of our home and overseas estate. The FCO can and does achieve savings in its non-cash budgets through careful management of the estate. We expect our continuing programme of asset recycling, rigorous scrutiny of capital projects by the DISG and competitive tendering to lead to non-cash savings. Although precise savings targets have not been specified in the FCO Efficiency Plan, we will continue to seek to reduce these costs.

The precise breakdown of efficiency savings the FCO will have to find has still to be agreed but cash savings will make up more than 50% of the total and non-cash costs the balance, in line with the targets set by the Efficiency Review team.

22. How much, if any, of the £36.9 million received by the Office from the Treasury Reserve will have to be paid back in due course? (p 163)

If the FCOs FY 2003-04 budget is underspent, the Treasury may recover some or all of the Reserve Claim by abating the FCO's End Year Flexibility claim. However, we do not yet know what our FY 2003-04 outturn is. If the budget is fully spent then there will be no recovery of the Reserve Claim.

23. What has been the impact on the FCOs other activities of the need for the Office to absorb large additional resource demands related to Iraq in 2003-04 and the current year? Which programmes have been cut as a result? (p 163)

Much of the additional activity was funded by the FY 2003-04 Reserve Claim. We intend to submit a further Reserve claim for FY 2004-05 and 2005-06 to cover the cost of establishing representation in Iraq from July 2004 and the ongoing regional security costs. We have also devoted considerable human resource to Iraq-related activity over the past year and we continue to do so. As a result, we are having to cope with some staff vacancies. This means that some lower priority activities have been foregone. The Departmental Unallocated Provision has also been used to ease the financial pressure on the FCO.

24. What has been the impact of the increased concern about security at overseas posts on the asset recycling programme? (p 165 ff.)

Security has, for some time, been a major factor in decisions on our overseas estate. Since the Istanbul bombing, our Departmental Investment Strategy Group has reprioritised much of our overseas estate expenditure to focus on security concerns. This has had only a limited effect on our asset recycling programme: but we would clearly only replace an existing building with a new one if the latter were equally or more secure.

25. What are the underlying reasons for the differences in the proportion of rented/owned assets across the different regions shown in Chart F? Is the asset recycling programme being implemented differently at a regional level? (p 166)

The asset recycling programme is being applied equally across the world. The regional differences in Chart F largely reflect the historical composition of the estate and varying local circumstances (eg it was easier to lease suitable properties in Europe than in Africa).

26. Are there plans to move any more staff out of London, further to those referred to in the Report? (p 166)

The figures for relocation remain as set out in the Lyons Report (456). We have no proposals at this stage to extend that number.

27. In the light of the difficulties experienced by the Office in relation to the asset recycling programme, outlined in the Report on page 167, does the Office still "remain optimistic that our SR2000 target of £100 million is achievable" (Departmental Report 2003, p 141)? What was the shortfall in capital receipts in 2002-03 and 2003-04, and what impact did this have on the Office's investment programme in each year?

We achieved £81 million sales in the SR2000 period (Financial years 2001-04), £19 million less than the £100 million target. The shortfall of capital receipts was £17 million in 2002-03 and £19 million in 2003-04. In 2002-03 the Treasury granted reverse end-year flexibility of £10 million in consideration of the slump in world property markets. This considerably mitigated the impact of the shortfall on the Office's investment programme in that year. In 2003-04 the Office had to reprioritise its investment plans to allow for the effect of the shortfall on available funding. The FCO clearly recognises that asset recycling is a declining source of receipts.

28. When will the "further discussions" with HM Treasury mentioned in the Report take place, and when will their outcome be known? (p 168)

Discussions with the Treasury on sales targets for future years have taken place as part of the SR2004 process. The outcome will be known when the SR2004 Settlement is announced.

29. Given the developments outlined in the Report, is it envisaged that any properties will be sold before the outcome of the talks with the Treasury are known, or have all such sales been temporarily placed on hold? (p 168)

Even though the current level of asset recycling may not be sustainable it does not mean that the programme will cease. Asset recycling will continue for the foreseeable future. In view of the fact that it is not yet known what the outcome of the talks with the Treasury will be, it is not feasible to suspend sales. Sales are, therefore, continuing on a case by case basis when the estate requirements and economic assessments justify them.

30. Where will the extra £4.1 million required to fund the Prism Programme come from? (p 168)

The original £81 million budget for Prism covered seven years. The revised cost is £4.1 million greater but covers eight years of service which represents good value for money. This has been factored into the FCO's ICT Administration budget. There is no impact on the capital budget.

31. How does the Office, the British Council and the BBC World Service intend to "demonstrate" that they have achieved efficiency gains, rather than simply work within reduced budgets? (p 174)

In response to the Gershon Review, the FCO recently submitted an Efficiency Plan to the Cabinet Office Efficiency Review Team setting out how the FCO will achieve cashable efficiency gains across the whole range of its activities in the SR2004 period.

The British Council also submitted an Efficiency Plan to the Cabinet Office Efficiency Review Team setting out how they will achieve efficiency gains during the SR2004 period.

Proposed efficiency savings for the BBCWS are explained in their section of the FCO bid which is currently being reviewed by the Treasury.

32. Given the budgetary difficulties being experienced by the Office at this time, is it envisaged that reductions will be made in any of the UK's contributions to international organisations? (pp 181 and 187-8)

The UK has always taken the position, under successive governments, that it pays its assessed contributions to international organisations in full and on time.

33. Could the FCO provide the Committee with a list of all properties in the overseas estate sold or offered for sale in the financial year 2003-04, as the Office did last year (in the same format)?

These figures were provided to the FAC in a letter from Matthew Hamlyn dated 18 May 2004.

34. The Committee found the table in last year's Departmental Report showing the "Changing Establishment of FCO Posts" (Departmental Report 2003, p 13, table 1) most useful. Could you supply an updated version of this table?

Changing establishment of FCO Posts


1998	1999	2000	2001	2002	2003

Opened
(UK based)
	Chongqing Bangalore Nagoya Gothenburg*	Dili Tripoli Monterrey Denver Pristina Asmara	Pyongyang Dushanbe Kabul Bamako Lahore	Conakry Chisinau	Baghdad
(Local staff)

Lome	Calgary Fukuoka	Conakry Port-au-Prince Ahmedabad Bhopal Goa Hyderabad Pune Bamako	Tarawa Sylhet		Atyrau (Kazakhstan)

Closed
(UK based)

Kuching Chiang Mai Naples	Cleveland		Lahore	Bamako San Salvador Tegucigalpa

(Local staff)
		Seville**		Kaduna

* During 2003 Gothenburg became a localised post-that is operated by locally employed staff.

** Although the office in Seville closed in 2000, UKTI maintained a trade team of two locally-employed staff who work from home. There was an erratum in the FCO 2003 Departmental Report which stated that Seville closed in 1998.

In addition, the Secretary of State opened the British Embassy Office in Astana in Kazakhstan in February 2004.

35. Further to the Committee's Report on last year's Departmental Report, the Committee would like to gain a better insight into the scale of the problem facing the Department in relation to different Government departments paying LES different rates at the same post (Foreign and Commonwealth Office Annual Report 2003, HC 859, para 83). Could you, therefore, provide information on:

the number of FCO posts where other Government departments have "an autonomous presence", with an indication of how many departments are represented at posts and which ones; and

There are some 150 Overseas Posts where Other Government Departments (OGDs) maintain a presence. The main OGDs are the Department for International Development, Ministry of Defence, HM Customs and Excise, National Criminal Intelligence Service and Home Office. We do not collect information from FCO Posts where OGDs operate an independent, autonomous presence in a country.

the rates of remuneration for comparable LES positions (eg drivers, security guards, etc) at a post with more than one other autonomous Government department present-Jamaica, for instance.

The High Commission in Kingston sets the salary rates for all local staff in Jamaica. No other government department has an autonomous presence in that country or elsewhere in the West Indies. Sample salary comparisons are given for India and Lesotho where DFID have a separate presence. The variables arise from the different methodologies employed in determining appropriate rates eg use of consultants (DFID) compared with FCO "marker" reviews, and the selection of analogous employers and grade comparitors.


	Grade	FCO Rate	DFID Rate (equivalent grade)

Lesotho (Maloti)	LEIII Senior Clerical	M 3,957-6,914	M 6,835-9,618	2003
	LEIV Junior Clerical	M 3,651-5,978	M 4,446-6,256
	LEVA Driver	M 2,922-5,489	M 4,446-6,256
	LEVB Guard	Not given
India (Rupees)	LEVA	R 8,553-15,357	R 15,187-23,955	2003
	LEVB	R 7,129-13,667	R 11,869-23,036

36. Could the FCO provide the Committee with a summary table of the SR2002 PSA targets which states, for each, whether current progress is "on course", "not known", "slippage" etc as this information is not always easy to identify in the main text of the report.

Please see the attached table, which should be read in conjunction with the full data available in the Departmental Report.

37. What was the outcome of the FCO's consideration of "innovative ways of obtaining better value for money from the estate to supplement the existing recycling programme" (Departmental Investment Strategy, p 22)? The Investment Strategy gives examples of the possibility of PPP disposals or the sale of surplus development rights-are any of these projects underway?

The FCO is considering a number of potential deals that would involve private finance. These have included detailed discussions with developers for proposed construction projects in Bucharest, Sarajevo and Madrid as well as initial studies of private finance options for projects in the UK (Hanslope Park) and Beijing. If any of these initiatives are to proceed they must represent a good deal for the FCO in terms of value for money and affordability. In order to pass these tests it will be necessary for the asset created to remain off the FCO's balance sheet.

Recently, the NAO have indicated that the Berlin Embassy (which represents the FCOs only asset procured on a "full" PFI basis) should be moved onto the FCO's balance sheet. This was done for the Financial Year 2002-03. Under current accounting rules it is proving to be extremely difficult for us to construct development deals which produce off-balance sheet assets. We are, however, still pursuing all the possibilities.

The sale of surplus development rights at the residence in Buenos Aires is still being pursued, but elsewhere this avenue has not been successful.

38. Following the trial of devolution of estate budgets to geographical directorates (Investment Strategy, p 29) did the Office find that better decisions were made about the estate? Will this trial be extended further so that more than 50% of all FCO estate expenditure is devolved to directorates (p 165)? Does each directorate have an asset recycling revenue target or are these decisions made centrally?

The aim of the trial was to gauge the effectiveness of devolving to Directorates the responsibility for decisions on which estate assets to acquire, retain or sell to maximise the effectiveness of Posts. It envisaged a form of asset recycling within Directorates, including the possible sale of an asset in return for higher running cost provision.

The trial coincided with a period when funding for estate investment has been particularly limited. Shortage of cash coupled with the increasing need for security-driven investment has forced us to review priorities world-wide. This very much reduced the scope for the pilot Director to retain and recycle estate assets, and the Directorate have therefore found the scheme of limited value to them.

We do not, therefore, intend to run this experiment further or extend it to other Directorates for the time being. Nor shall we give Directors formal recycling targets, although the Estate Modernisation Manager will continue to discuss and agree recycling proposals with each Director.

50% of FCO estate expenditure is devolved to Posts, mostly for rents and rates. Prioritisation of major capital investment is carried out globally, in consultation with Directors. The Departmental Investment Strategy Group has delegated responsibility for decisions on investment priorities. The appropriate Geographical Director becomes the customer and "project owner" for all major new constructions.

39. The Committee found the information given in response to Mr Bob Spink's recent written parliamentary question, concerning the break-down of FCO staff by age, gender and ethnicity, very helpful (HC Deb, 23 April 2004, col. 710W). Could you supply the same data for FCO staff on 1 October 2000, 2001 and 2002? Could you also set out briefly the sort of positions filled by staff at each of the grades listed.

FCO Staff in Post Breakdown: 1 October 2002


Grade	% Female	% Declared Minority Ethnic	% Declared Disabled	Total

SMS	10.99	0.65	1.72	464
D7	24.44	1.67	1.11	180
D6	24.10	1.25	0.63	639
C5	19.96	1.31	2.05	536
C4	32.43	2.48	1.57	1,212
B3	49.77	5.63	2.39	1,296
A2	62.19	11.29	3.14	1,116
A1	44.21	21.66	3.26	337
Totals	38.70	5.59	2.09	5,780

Positions filled at the above grades include:

— SMS: Head of Mission/Post (overseas). Board of Management, Head of Department (UK). Equivalent to Senior Civil Service grades in Home Civil Service.

— D7/D6: Head of small post, head of section in larger posts, First Secretary (overseas). Head of Section, Deputy Head of Department (UK). Equivalent to Home Civil Service grade 6 (D7) and grade 7 (D6).

— C5/C4: First/Second Secretary, head of smaller section (overseas). Desk officer (UK). C4 is the grade at which policy entrants start in the FCO. Equivalent to Home Civil Service SEO (C5) and HEO(C4).

— B3: Third secretary, support work (overseas). Desk officer, support work (UK). B3 is the grade at which operational entrants start in the FCO. Equivalent to Home Civil Service Grade EO.

— A2/A1: Administrative support staff, clerical work, range of support duties both overseas and in the UK including communications, secretarial, registry. Equivalent to grade Home Civil Service AO (A2) and AA (A1). Note: the FCO only recruits from the London area at A2 and A1 level.

FCO Staff in Post Breakdown: 1 November 2001


Grade	% Female	% Declared Minority Ethnic	% Declared Disabled	Total

SMS	9.84	0.00	1.34	447
D7	27.27	2.6	1.30	154
D6	22.93	1.59	1.11	628
C5	16.87	1.22	2.44	492
C4	31.30	2.29	1.87	1,179
B3	49.20	5.18	1.91	1,256
A2	62.44	10.03	3.12	1,057
A1	47.09	22.75	3.17	378
Totals	38.24	5.44	2.11	5,591

FCO Staff in Post Breakdown: 1 October 2000


Grade	% Female	% Declared Minority Ethnic	% Declared Disabled	Total

SMS	8.24	0.00	1.34	449
D7	31.40	3.31	0.83	121
D6	20.32	1.61	1.77	620
C5	14.86	0.85	1.91	471
C4	29.97	2.52	1.91	1,151
B3	47.73	4.62	1.70	1,234
A2	63.41	9.88	2.82	1,063
A1	47.52	23.29	3.73	322
Totals	37.41	5.23	2.06	5,431

Wilton Park


Grade	April 2003	April 2002	April 2001	April 2000

A1	14	11	9	7
A2	20	22	18	15
B3	10	8	8	6
C4	12	11	12	10
C5	2	1	0	0
D6	7	6	5	6
D7	1	1	1	1
SMS	2	2	2	1
Total Employed	68	62	55	46
Full Time Equivalent	59.7	55.4	49.2	41.2
Total Male	22	23	20	17
Total Female	46	39	35	29
Ethnic origin
White	67	61	54	44
Anglo Caribbean	1	1	1	1
Chinese	0	0	0	1
Disabled	0	0	0	0

40. Further to Mr Malcolm Bruce's written question to Mr O'Brien (HC Deb, 29 April 2004, col 1209W), could the Office clarify why details of employment tribunals (or their equivalents) involving locally-engaged members of staff are not kept and monitored centrally? How does the Office ensure that best practice is being observed across all posts, in relation to the employment conditions of such LES, without such data? Is the equivalent information kept on file for UK-based staff?

There is no obligation on posts to report disputed local staff termination cases to FCO. If however court or tribunal proceedings appear likely the post concerned will report the circumstances to the FCO, particularly where immunity or compensation issues may arise. There are about four such cases running annually.

Posts are expected to manage staff responsibly and fairly within locally approved terms and conditions. Guidance on disciplinary and grievance procedures is provided from London and is incorporated in local terms. Where a complaint is made to FCO by a member of the local staff, the FCO will satisfy itself that the post concerned has followed its own procedures correctly. It will not take a view on the merits of the case.

The FCO maintains records of UK Employment Tribunal cases involving UK Based staff. Local staff (two in 1999-2002 and three in 2003) have brought complaints of unfair dismissal in UK Employment Tribunals. In line with recent case law from the Court of Appeal, the Tribunal has already held that it does not have jurisdiction to hear one of these cases, and it is expected that this decision will be followed in the other two cases.

41. Could the Office provide further details of the facts behind the story which appeared in the Daily Telegraph recently concerning the High Commissioner's Residence in New Delhi? (Daily Telegraph, 6 May 2004, p 19)

Since the lease expired in 1989, we have been unable to agree the rent payable to the Government of India who own the property. For many years this issue remained dormant. We have, however, been paying an interim rent. Last year senior FCO officials visited New Delhi in an attempt to resolve the problem. However the Indians are demanding a figure which we consider well above the market value. Our efforts to resolve this issue continue.

Keith Grieve

Parliamentary Relations and Devolution Department

Foreign and Commonwealth Office

14 June 2004