Foreign & Commonwealth Office Winter
Supplementary Estimate 2007-08 Memorandum for the Foreign Affairs
Committee
INTRODUCTION
1. The Foreign and Commonwealth Office Estimate
has two Requests for Resources (RfRs):
RfR 1: Promoting internationally
the interests of the UK and contributing to a strong world community,
that covers:
Section A: Expenditure by the Foreign
and Commonwealth Office (FCO), including UK Trade and Investment,
on its administration, Wilton Park Executive Agency, hospitality
and facilities; international organisations; grants in aid to
bodies supporting FCO objectives; scholarships, information services
and sponsored visits; special payments and assistance programmes
to support foreign policy objectives including human rights, good
governance, international security and the fight against the illicit
drug trade; and international organisations; and on associated
non-cash items;
Sections B and C: Resource grant
in aid to the BBC World Service for broadcasting and to the British
Council, respectively;
Sections D and E: Capital grant in
aid to the BBC World Service for broadcasting and to the British
Council, respectively;
Section F: AME Provision for impairments;
and
Section G: The refund of certain
taxes and duties paid by certain Foreign and Commonwealth governments.
RfR 2: Conflict prevention, that
covers:
Section A: Expenditure by the Foreign
and Commonwealth Office on conflict prevention, early warning,
crisis management, conflict resolution/peacemaking in Sub-Saharan
Africa;
Section B: Expenditure by the Foreign
and Commonwealth Office on conflict prevention, early warning,
crisis management, conflict resolution/peacemaking globally;
Section C: Peacekeeping and peace
building activity and on associated strengthening of international
and regional systems and capacity in Sub-Saharan Africa; and
Section D: Peacekeeping and peace
building activity and on associated strengthening of international
and regional systems and capacity globally.
RFR1 WINTER
SUPPLEMENTARY ESTIMATE
CHANGES
Take up of End Year Flexibility
2. The take-up of £22 million Resource
DEL EYF is for departmental restructuring, in particular, exit
costs associated with the FCO's efficiency programme. Take-up
of EYF for this purpose may rise further during the year and,
if so, will be reflected in the Spring Supplementary Estimate.
We have taken up £35 million of Capital DEL EYF as part of
our ongoing programme to increase the security and safety of our
Estate and the people using it.
Claim on the DEL Reserve
3. Take-up £3.4 million from the Resource
DEL Reserve, in particular from the Emergency Disaster Relief
Fund, is for costs arising from the Lebanon evacuation.
Admin DUP
4. The budget neutral take-up of our £17
million Admin DUP reflects the need to commit our entire Administration
Budget for 2007-08, in particular to finance pressures such as
the need to finance a shortfall in admin income following an overestimate
in Spending Review 2004, start-up costs associated with the FCO's
efficiency programme and the move to Trading Fund status of FCO
services.
Transfers of Budgetary Cover
5. The FCO is transferring £7 million
to the Border and Immigration Agency of the Home Office for work
on the identification and deportation of illegal immigrants. We
are also transferring amounts of £5 million and £0.3
million to the Security and Intelligence Agencies to expand their
capabilities.
Neutral and Other Changes
6. We are increasing other current (not
admin) expenditure and receipts by £60 million to cover increased
consular and visa business. We are also reclassifying a total
of £16.677 million from capital expenditure to capital grants.
This budget neutral change is, in the main, to cover expenditure
on NATO and UN buildings, levied as part of our subscriptions
to these organisations, and the cost of the Government Secure
Zone.
RFR2 MAIN
ESTIMATES CHANGES
7. The FCO is taking on £3 million
from DfID to cover Global Conflict Prevention Work in Afghanistan
but also transferring £3 million to the Security and Intelligence
Agencies to expand their capacity and capabilities, giving a token
£1 thousand change to this RfR in line with convention that
we only report positive changes to expenditure in Supply Estimates.
DETAILED LIST
OF CHANGES
Table 1
DETAILED EXPLANATION OF CHANGES
|
£m
|
|
End Year Flexibility |
22.000 | RfR1 Section A2 Programme EYF for departmental restructuring.
|
35.000 | RfR1 Section A7 Capital EYF in respect of the departmental estate.
|
22.000 | Resource Total Change to DEL
|
35.000 | Capital Total Change to DEL
|
| |
Transfers from non-voted Departmental Unallocated Provision
|
17.000 | RfR1 Section A1 take up Administration DUP.
|
1.000 | RfR1 Section A7 take up of capital DUP.
|
| |
Transfers between section within the Estimate
|
15.200 | RfR1 Section A3 increase in capital grants for International Subscriptions offset by decrease in A7.
|
0.250 | RfR1 Section A3 increase in capital grants for Gibraltar Pensions offset by decrease in A7.
|
1.227 | RfR1 Section A3 increase in capital grants for Government Secure Zone offset by decrease in A7.
|
| |
Transfers from Other Government Departments
|
3.001 | RfR2 Section B3 Budgetary Transfer from DfID for Global Conflict Prevention work in Afghanistan.
|
0.014 | RfR1 Section A1 Budgetary Transfer from Cabinet Office for the Privy Council Office.
|
3.015 | Resource Total Change to DEL
|
| |
Transfers to Other Government departments
|
-7.000 | RfR1 Section A2 budgetary transfer to HO for work on illegal immigration
|
-5.000 | RfR1 Section A2 budgetary transfer to SIA to cover expansion and capability.
|
-3.000 | RfR2 Section B3 budgetary transfer to SIA to cover expansion and capability.
|
-0.300 | RfR1 Section A2 budgetary transfer to SIA to cover expansion and capability.
|
-15.300 | Resource Total Change to DEL
|
| |
Transfers from Central Funds |
3.407 | RfR1 Section A2 Resource Reserve claim for EDR monies relating to work in the Lebanon.
|
3.407 | Resource Total Change to DEL
|
| |
Increases in gross spending offset by Appropriations in Aid
|
60.000 | RfR1 Sections A2 and A5 for Consular and Visa work.
|
2.830 | RfR1 Sections A2 and A5 for Anti-narcotics work.
|
13.122 | Net total change to Resource DEL
|
35.000 | Net total change to Capital DEL
|
|
DEPARTMENTAL EXPENDITURE
LIMIT (DEL) AND
ADMINISTRATION BUDGETS
8. The tables below show a comparison of the 2007-08
DEL (Table 2 and 2a) and Administration (Table 3) budgets with
the 2002-03, 2003-04, 2004-05, 2005-06 and 2006-07 outturn, and
plans for 2007-08.
9. Table 2a shows outturn on the definition of DEL used
in the year concerned in order to be consistent with published
Departmental Expenditure Limits. They do not therefore correspond
to the outturns in Table 2 that are on a consistent basis year
on year, including reclassification by Treasury of expenditure
across all years of the Public Expenditure cycle.
Table 2
DEL COMPARISON
|
| 2002-03 |
2003-04 | 2004-05
| 2005-06 | 2006-07
| 2007-08 |
|
| Actual |
Actual | Actual
| Actual | Actual
| Budget |
Resource DEL 1,2 | 1,475,575
| 1,508.860 | 1,707.753
| 1,874.336 | 1,825.291
| 1,822.326 |
Capital DEL | 101.971
| 86.621 | 116.626
| 131.792 | 160.275
| 182.753 |
Less Depreciation 1,3 | 67.072
| 64.010 | 67.106
| 108.675 | 81.505
| 116.624 |
Total | 1,510.474
| 1,531.471 | 1,757.273
| 1,897.453 | 1,904.061
| 1,888.455 |
|
1 Figures for all years reflect the reclassification of impairment expenditure from DEL into AME.
|
2 Resource DEL figures for 2007-08 are understated because they do not include all of the conflict prevention expenditure, which will be transferred at the time of the 2007-08 Spring Supplementary Estimates. In addition 2005-06 included expenditure on a number of one off items (Tsunami expenditure, Efficiency Challenge Fund & G8 & EU presidencies).
|
3 Depreciation, which forms part of Resource DEL, is excluded from the total DEL, since Capital DEL includes the purchase cost of capital assets. To add on the depreciation of those assets would double count their cost.
|
Table 2a
PREVIOUS YEARS' EXPENDITURE AGAINST DEPARTMENTAL EXPENDITURE
LIMITS
| | |
| | £m
|
|
Year | Voted
| Non-voted | Total DEL
| Outturn1 | Variance
|
|
Resource | |
| | | |
2004-05
| 1,607.192 | 209.690
| 1,816.882 | 1,736.188
| 80.694 |
2005-06
| 1,999.224 | 6.713
| 2,005.937 | 1,916.190
| 89.747 |
2006-07
| 1,924.913 | 44.213
| 1,969.126 | 1,852.024
| 117.102 |
Capital | |
| | | |
2004-05
| 101.533 | 1.000
| 102.533 | 71.236
| 31.297 |
2005-06
| 135.697 | 1.000
| 136.697 | 92.959
| 43.738 |
2006-07
| 157.779 | 1.000
| 158.779 | 160.747
| -1,968(2) |
|
1 Outturn in is based on the definition of DEL in the relevant year and so is not consistent with the outturn in Table 2 that includes subsequent classification changes effective across all years.
|
2 A small overspend was recorded against capital DEL in 2006-07 largely due to the reclassification of some international subscriptions as capital grants.
|
Table 3
ADMINISTRATION BUDGET COMPARISON
| | |
| | | £m
|
|
| 2002-03 |
2003-04 | 2004-05
| 2005-06 | 2006-07
| 2007-08 |
| Actual |
Actual | Actual
| Actual | Actual
| Plan |
|
Administration budget | 703.482
| 706.187 | 745.541
| 814.689 | 780.025
| 870.060 |
|
1 Figures for all years reflect the reclassification of impairment expenditure from DEL into AME.
|
DEPARTMENTAL UNALLOCATED
PROVISION (DUP) 2007-08
10. At the time of the Winter Supplementary Estimate,
the FCO has £5m of unallocated resource provision only:
Table 4
2007-08 DEPARTMENTAL UNALLOCATED PROVISION
|
| Resource
| Capital |
|
RfR1 DUP to met unforeseen requirements arising in-year
| £0.0m | £0.0m
|
RfR2 Global Conflict Prevention Pool | £5.0m
| |
Total | £5.0m
| £0.0m |
|
END YEAR
FLEXIBILITY (EYF)
11. The Public Expenditure Outturn White Paper published
in July 2007 showed a total figure of £218.208 million for
carry forward of underspending into 2007-08 under the DEL EYF
scheme.
12. Of this total, £112.9 million was a provisional
forecast underspend on Resource DEL in 2006-07 and, in particular,
administration costs (£93.9 million). The underspends resulted
from lower than expected IT and security costs and a prudent approach
to spending, particularly towards the end of the financial year.
However final administration cost outturn was £15.8 million
higher than the provisional forecast after apportionment of visa
and consular overheads to other current was taken into account.
The provisional capital DEL underspend of £13.4 million also
did not materialise in the final account owing to the reclassification
of grants to NATO and the UN from resource DEL to capital. Our
capital EYF stock is therefore entirely composed of underspends
accumulated before 2006-07.
13. Our plans for EYF take up in 2007-08 are discussed
at paragraph 2 above.
Table 5
ACCUMULATION OF EYF
| | |
| | | £m
|
|
| Administration
| Programme | Total
Resource
| Of which
near cash |
Capital | Total
|
|
Total FCO EYF Entitlement in Public Expenditure Provisional Outturn July 2007 (table 6Cm 7156)
| 107.958 | 27.367
| 135.325 | 101.482
| 82.883 | 218.208
|
Adjustment for final 2006-07 outturn | -15.846
| 20.258 | 4.412
| 3.976 | -15.339
| -10.927 |
EYF drawn down in Winter Supplementary (1) |
22.000 | 0.000
| 22.000 | 22.000
| 35.000 | 57.000
|
BALANCE OF ACCUMULATED END YEAR FLEXIBILITY |
70.112 | 47.625
| 117.737 | 83.458
| 32.544 | 150.281
|
|
(1) Admin EYF drawn down in Winter Supplementary will be spent as programme.
|
PUBLIC SERVICE
AGREEMENTS
14. The main purpose of this supplementary Estimate is
take-up of £22 million Resource DEL EYF for departmental
restructuring and £35 million of Capital DEL EYF as part
of our ongoing programme to increase the security and safety of
our Estate and the people using it. This uptake of EYF is designed
therefore to improve delivery against all of the FCO's stategic
priorities and PSA's. The other major item impacting on the FCO's
PSA's, in particular PSA 9 on effective and efficient consular
and entry clearance services, is the budget neutral increase in
other current expenditure and receipts by £60 million to
cover increased consular and visa business.
Keith Luck
Finance Director General
13 November 2007
|