Conclusions and recommendations
Form of the Annual Departmental Report and related
papers
1. We
conclude that the presentation of the FCO's performance against
its Public Service Agreement targets in the Autumn Performance
Report is an improvement over the presentation of similar information
in the annual Departmental Report. (Paragraph 5)
2. We
conclude that the delay of over two months in signing off and
publishing the FCO's Resource Accounts for 2004-05 was excessive
and that it had the unacceptable consequence of depriving Parliament
and the public of an important tool for exercising scrutiny. We
recommend that the FCO explain in its response to this Report
what caused this delay and why it missed even the revised target
for signing off its accounts. (Paragraph 6)
Assessing performance
3. We
conclude that performance targets defined in terms of inputs and
outputs may often be more appropriate for the FCO than targets
based on outcomes, particularly where a target is based on outcomes
which it is beyond the capacity of the FCO to deliver. We recommend
that the FCO discuss with the Treasury the potential for redefining
some of its targets and performance indicators accordingly. (Paragraph
12)
4. We
recommend that in its response to this Report the FCO publish
a summary of the results of the NAO's review of the data systems
underlying its PSA targets, together with its commentary on how
it proposes to implement any conclusions reached by the review.
(Paragraph 13)
A year of two presidencies
5. We
recommend that in its response to this Report the FCO provide
a full breakdown of the costs of the G8 and EU presidencies, how
they were met, and whether the diversion of resources to service
the presidencies led to any adverse consequences for its other
work. (Paragraph 15)
Transparency and openness
6. We
conclude that the failure of the FCO to share with Parliament
the reports prepared for its Board by Collinson Grant Ltd and
by Norman Ling is evidence of a disturbing aversion on the part
of FCO management to proper scrutiny of its activities. Accountability
of the executive to Parliament is a fundamental feature of the
United Kingdom's constitution. We therefore welcome recent undertakings
by the FCO to be more open with this Committee in future; we will
evaluate this new policy in the light of experience. (Paragraph
23)
7. We
congratulate the Foreign Office on being one of the better departments
at dealing with freedom of information requests in a timely manner,
but we are concerned that the FCO is also one of the departments
most likely to withhold information from enquirers. We recommend
that in its response to this Report the FCO publish a statistical
analysis of its handling of FoI requests, showing the grounds
on which requests were not met or were only partially met. (Paragraph
26)
8. We
accept that where there are good reasons for PSA scorecards to
be classified according to the usual criteria, they should not
be published, but we recommend that the classification of such
scorecards be reviewed regularly, with a view to timely publication
where possible. In cases where classification of scorecards remains
essential, we recommend that consideration be given to publishing
a declassified summary. (Paragraph 29)
Efficiency and effectiveness
9. We
are disappointed and concerned that the FCO apparently takes the
view that, because a study costing hundreds of thousands of pounds
and with potentially huge implications for the FCO's management
of its resources was intended for internal consumption only, there
was no need to ensure that it was error-free. (Paragraph 35)
10. We
recommend that in its response to this Report the FCO list the
additional frontline activities which are being funded by efficiency
savings and asset sales, giving the amount of funding in respect
of each such activity. (Paragraph 36)
11. We
recommend that in its response to this Report the FCO provide
further details of the restructuring of its Human Resources Directorate,
including full information on the reduction in its size and of
any consequences for performance of the HR function in the FCO.
(Paragraph 40)
12. We
welcome the FCO's commitment to changing aspects of its culture
and to giving leadership and management skills their appropriate
place in the organisation. We recommend that in its response to
this Report the FCO set out how it intends to advance this agenda.
(Paragraph 42)
13. We
conclude that the FCO failed seriously in its duty to the Committee
in not informing the Committee about what the National Audit Office
has described as "the largest identified loss by fraud in
the Department's history" and about other frauds. We are
extremely concerned that the Tel Aviv fraud continued undetected
for at least four years as a result of weaknesses in financial
control and involved clear breaches of long standing accounting
procedures. We recommend that the FCO in its response to this
Report set out the other significant frauds which have taken place
in the last five years, and the specific steps it has taken to
prevent any recurrence. (Paragraph 48)
14. We
welcome the FCO's new focus on reform of its finance function.
We recommend that in its response to this Report, the FCO provide
a detailed explanation of the nature of these and related reforms
and of the timescale for implementing them. We further recommend
that in future the FCO inform this Committee promptly of any incident
involving major fraud or financial mismanagement. (Paragraph
50)
15. We
recommend that the FCO keep this Committee informed of the progress
of the 'capability to deliver' review being carried out by the
Prime Minister's Delivery Unit and, in due course, of its results.
(Paragraph 52)
Staff
16. We
conclude that the FCO needs to catch up with the rest of Whitehall,
by recruiting professionally qualified, experienced people to
the top roles in finance, human resources and estate management.
We recommend that it do so without delay. (Paragraph 57)
17. We
recommend that in its response to this Report, the FCO list the
senior management jobs which will be cut or downgraded during
the SR04 period, and that it state the net increase or reduction
in staff numbers that it expects to result from this exercise.
(Paragraph 60)
18. We
recommend that in its response to this Report the FCO provide
full information on the work of its PROSPER group. (Paragraph
61)
Prism
19. We
conclude that the Ling report has exposed a woeful lack of professional
skills and a disturbing series of failings in senior FCO management.
We welcome acceptance of the conclusions of the report and we
recommend that the FCO Board remain fully seized of the need to
implement them. We further recommend that the FCO keep this Committee
fully informed of the state of play on progress with putting each
of the Ling report's recommendations into practice; that it provide
us with updates on the continuing implementation of Prism; and
that it supply us with copies of Gateway reviews of further large,
high-risk programmes. (Paragraph 69)
20. We
recommend that in its response to this Report the FCO set out
how it proposes to achieve its targets for prompt payment of invoices.
(Paragraph 72)
Other IT projects
21. We
recommend that in its response to this report the FCO provide
full information on how refusal and fraud rates for on-line visa
applications compare with those for conventional applications.
(Paragraph 73)
Reinvesting efficiency savings
22. We
support the FCO's efforts to reclassify more of its expenditure
on front-line services as programme rather than administrative
expenditure and we recommend that it present a strong case to
the Treasury for making this change. (Paragraph 79)
The FCO's response to Collinson Grant
23. We
recommend that in its response to this Report the FCO identify
all those observations, conclusions and recommendations in the
Collinson Grant report that it does not accept, in each case with
a full explanation. We also recommend that the FCO state in that
reponse what stage it has reached in implementing each recommendation
in the report that it does accept. We further recommend that the
FCO publish in its response the list of activities classified
as red, amber or green, which is referred to in the report. (Paragraph
84)
24. We
congratulate FCO managers on their decision to invite external
consultants to carry out a study of their efficiency, effectiveness
and control of costs, although we have concerns about the lack
of thoroughness with which the review was carried out and about
the lack of seriousness with which the FCO regarded and appears
still to regard the project. We conclude that, having commissioned
the study, the FCO must deal with it seriously: this suggests
that the FCO should change some of its management practices and
its efficiency savings targets or it should defend and justify
them, explaining where and how the consultants are mistaken in
their conclusions. So far, we have seen no evidence that it is
succeeding in doing either. (Paragraph 85)
Consular services
25. We
conclude that the FCO's failure in 2004-05 to achieve four out
of the six Public Service Agreements for its consular services
is disappointing, although we recognise that the targets are demanding
and that activities carried out at Posts overseas will always
be subject to pressures or to events which may be more extreme
than those which apply in the United Kingdom. We recommend that
in its response to this Report, the FCO set out in detail the
goals, work programme and achievements to date of its new Nationality
and Passports Best Practice Unit. We further recommend that the
FCO identify those Posts which have registered failures in respect
of consular services PSAs in financial years 2004-05 and 2005-06
and that it supply this Committee with full details of the Board's
proposal on the future of issuing passports overseas. (Paragraph
92)
26. We
conclude that it would be wrong in principle for the FCO to be
required to fund its response to unpredictable disasters such
as the Indian Ocean tsunami. We recommend that the FCO take a
strong line in its discussions with the Treasury and that Ministers
accept the need for additional funding to be made available in
such circumstances. We further recommend that consideration be
given to increasing the resources available through the Emergency
Disaster Reserve. (Paragraph 102)
27. We
conclude that in recent years excessive and unrealistic expectations
have arisen of what the FCO is able to do for people who get into
difficulties abroad, including in circumstances such as natural
disasters. We recommend that Ministers take a firm line in explaining
to the public, not only through their official publications but
also through the media, that there are practical limits to the
consular support that British citizens who choose to travel abroad
are entitled to receive, not least because of the FCO's duty to
make efficient and effective use of public funds. We nonetheless
recommend that in the case of a further natural disaster on the
scale of the Indian Ocean tsunami, exceptional assistance should
be provided, tailored to the circumstances. (Paragraph 107)
28. We
conclude that in most respects the FCO's response to the immense
challenge posed by the Indian Ocean tsunami was timely and successful.
We conclude that the same can be said of the response to Hurricanes
Katrina and Rita. It is important, however, that the FCO learns
from the experience of responding to these major incidents and,
in particular, from the mistakes which were undoubtedly made.
We therefore welcome the FCO's very informative and helpful progress
report on how it is implementing the lessons learned from its
handling of these disasters and we recommend that in its response
to this Report the FCO provide an updated version of that table.
(Paragraph 109)
Diplomatic representation overseas
29. We
conclude that although co-location of a British sovereign Post
with or within the post of another country is in general undesirable,
it is almost always likely to be preferable to outright closure.
We recommend that the FCO consider very carefully the case for
co-location when adjusting its international priorities or when
looking to achieve financial savings from its overseas operations.
(Paragraph 118)
30. We
conclude that the forthcoming referendum on Montenegro is likely
to add to the case for the FCO to upgrade its Post in Podgorica
to one headed by its own British Ambassador and appropriately
staffed, and we recommend that this be done without further delay.
(Paragraph 119)
31. We
recommend that the FCO make the opening of an Embassy in Bishkek
a priority. (Paragraph 120)
32. We
conclude that there is no clear basis for the FCO's projected
receipts of £10 million from estate sales over the next three
financial years. We recommend that in its response to this Report
the FCO explain how it arrived at this projection, whether it
regards the figure as a target, and if so how it expects to achieve
it without "further large sales or other deals", particularly
involving properties of special architectural or historical importance.
(Paragraph 128)
33. We
conclude that the provision of information on the FCO's management
of its overseas estate has improved in recent years. We welcome
the quarterly reports which the Committee now receives from FCO,
and we will continue to scrutinise these and the policies which
underlie them closely. (Paragraph 130)
FCO personnel issues
34. We
continue to be concerned for the welfare of staff who serve their
country in the more dangerous parts of the world. We recommend
that the FCO maintain its commitment to ensuring that adequate
safety and security measures are put in place, with an appropriate
level of funding. This funding should be in addition to the FCO's
agreed public expenditure allocation, in recognition of the exceptional
nature of the cost of protecting personnel and property from terrorist
attacks. (Paragraph 132)
35. We
strongly support the decision by Sir Michael Jay to write to Ambassadors
and High Commissioners, reminding them of the importance of maintaining
the trust and confidence of Ministers. We conclude that the breaking
of trust or breaching of confidence on either side is against
the best interests of officials and politicians alike and that
it can be inimical to the conduct of effective foreign policy.
However, we also conclude that where FCO officials comply with
the Radcliffe rules and criteria, they should remain free to publish
if they so choose. (Paragraph 141)
36. We
recommend that the FCO provide the Committee with full details
of any representations made by the Holy See, by the outgoing British
Ambassador to the Holy See, or by the British Ambassador to Italy,
about the propriety or acceptability of locating the Embassy to
the Holy See or the residence of the Ambassador to the Holy See
within the campus of the British Embassy to the Republic of Italy.
(Paragraph 145)
37. We
conclude that the FCO Board is absolutely right to recognise the
need to address urgently such gender and ethnic minority imbalances
as remain. We recommend that in its response to this Report the
FCO provide further information on what it is doing to remedy
this situation. (Paragraph 150)
BBC Monitoring
38. We
recommend that in its response to this Report the FCO explain
how the reduction in its funding of BBC Monitoring has contributed
to its efficiency savings targets; and whether the Treasury has
accepted this. (Paragraph 158)
39. We
conclude that it is reassuring that BBC Monitoring has finally
been given the financial stability it has been seeking and we
believe that this should enable it to plan more strategically
up to 2011. We also conclude that the quid pro quo for this certainty
should be a continuing drive by BBC Monitoring to maximise its
efficiency. We recommend that the FCO and the other sponsoring
departments maintain their close interest in the operations of
BBCM, to ensure that BBCM continues to offer excellent value for
money. (Paragraph 159)
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