Letter to the Head, Parliamentary Relations
Team, Foreign and Commonwealth Office from the Second Clerk of
the Committee
The Foreign Affairs Committee has had an opportunity
to consider the Winter Supplementary Estimates, which were laid
on 15 November 2007, and has asked me to write with the following
comments and questions.
As you will be aware, the Scrutiny Unit guidance
along with an example of best practice is available at:
http://www.parliament.uk/parliamentary_committees/scrutinyunit/reports_pubs.cfm.
The form and content of the memorandum should also comply with
HM Treasury guidance in PES (2004) 14. There is some improvement
from the Estimates Memoranda from previous years, noticeably the
inclusion of table 2a, which sets out outturn against budget for
the previous three years. However more explanatory detail of the
significant movements in the Estimates is desirable. The "detailed
changes" section gives a list of changes without sufficient
explanation of the changes. For instance it notes that £35
million of End-year Flexibility has been taken up for increasing
security of the FCO Estate, without explaining where and how the
funds will be spent.
The Committee would like to have additional
clarification on the following matters.
1. END-YEAR
FLEXIBILITY
The Estimates Memorandum notes that the £22
million of End-year Flexibility (EYF) has been taken up for departmental
restructuring, in particular exit costs associated with the FCO's
efficiency programme and that more EYF is to be taken up in the
forthcoming year for the same purpose. It also shows that an additional
£35 million of capital EYF will be drawn-down for spending
on the FCO estate.
(i) What departmental restructuring will the
EYF be spent on? How many staff cuts, if any, will this departmental
restructuring involve? What proportion of the £22 million
EYF will be spent on staff redundancy costs?
(ii) What are the exit costs associated with
the FCO's efficiency programme? Will these exit costs reduce FCO's
reported efficiency gains?
(iii) Can you provide a detailed breakdown that
shows the components of the FCO estate which the £35 million
of capital EYF will be spent on?
(iv) How much EYF is the FCO intending to take
up in the Spring Supplementary Estimates?
2. DEPARTMENTAL-UNALLOCATED
PROVISION
There has been a budget neutral take-up of £17
million administration Departmental Unallocated Provision (DUP)
The Estimates Memorandum reports that it is needed because there
is predicted to be a shortfall in administrative income from that
estimated in the 2004 Spending Review and because more funds need
to be spent on the start-up costs associated with the FCO's efficiency
programme and the move to Trading Fund status of FCO Services.
(i) Please can you provide a detailed breakdown
of what the £17 million will be spent on, specifying what
amounts will be spent on FCO Services, FCO's efficiency programme
etc
(ii) What are the start-up costs associated with
the FCO's efficiency programme?
(iii) Why is there a shortfall in administrative
income from that estimated in the 2004 Spending Review?
3. RESERVE CLAIM
The Department has placed a reserve claim of
£3.4 million from the Emergency Disaster Relief Fund. The
Estimates Memorandum states that this is for costs arising from
the Lebanon evacuation. Given that the conflict between Israel
and Hizbollah occurred in July 2006, within the last financial
year, what will these funds be spent on?
4. INCREASED
CONSULAR AND
VISA BUSINESS
The Estimates Memorandum states that the FCO
is "increasing other current (not administration) expenditure
and receipts by £60 million to cover increased consular and
visa business". However no explanation is given as to why
there is either increased receipts or expenditure. In its written
response to the Committee's questions on the Departmental Report
dated 29 June 2007, the Department stated that "income for
2007-08 [set out in the Departmental Report] assumes no growth
in demand for visa services and is based solely on increased fees"
(Q34). Why is £60 million needed to cover increased consular
and visa business and will fees have to rise as a result?
5. TRANSFERS
TO AND
FROM OTHER
DEPARTMENTS
(i) The Department is transferring £8.3
million to Security and Intelligence agencies "to expand
their capacity and capabilities". How will the £8.3
million be spent?
(ii) Why has £7 million been transferred
to the Home Office from the FCO for the Border and Immigration
Office? Please can you clarify where the transfer is shown in
the Home Office Winter Supplementary Estimate?
(iii) To what extent will the FCO have to reduce
funding for existing activities as a result of it having to transfer
£7 million to the Home Office and £8.3 million to Security
and Intelligence Office?
(iv) Why has £14,000 been transferred from
the Cabinet Office to the FCO in respect of the Privy Council
Office? Please can you clarify where the transfer is showing up
in the Cabinet Office Winter Supplementary Estimate?
(v) Why is DFID not showing the £3 million
transfer in respect of conflict prevention activity in Afghanistan
in a Winter Supplementary Estimate?
I would be most grateful to receive a response
by 31 January 2008.
Gosia McBride
Second Clerk of the Committee
7 December 2007
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