Memorandum submitted by the Foreign &
Commonwealth Office
FOREIGN AND COMMONWEALTH OFFICE SPRING SUPPLEMENTARY
ESTIMATE 2007-08
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 SPRING
SUPPLEMENTARY MAIN
ESTIMATE CHANGES
Take up of End Year Flexibility
2. The take-up of £7,350,000 Resource
DEL EYF is for transfer to capital to pay to MoD to provide additional
helicopter hours for movement of civilian staff in Afghanistan.
We have taken up £31,300,000 of Capital
DEL EYF as part of our ongoing programme to increase the security
and safety of our Estate and the people using it. The drawdown
of Capital EYF is not linked to individual programmes and/or projects.
Rather we have assessed the expected overall level of capital
expenditure across all FCO capital budget holders, and anticipate
that the total demand for funds will necessitate use of our capital
EYF.
Programme DUP
We have also taken-up our remaining £5,000,000
programme DUP to help to fund the programme transfers listed below.
Claims on the DEL Reserve
3. Claims on the DEL reserve include:
— £16,500,000 programme expenditure
for Consular premiums collected in the UK by the Home Office that
are transferred to the FCO via the Reserve.
— £18,453,000 programme expenditure
and £7,400,000 capital arising from the FCO/HMT 50/50 International
Organisations subscription cost sharing agreement.
— £1,359,000 to increase grant
to the British Council as a result of the operation of the Overseas
Pricing Mechanism that compensates for exchange rate movements.
— £151,000 for the Emergency Disaster
Relief Fund for consular activity arising from the Phuket air
crash.
— A payment to the Reserve of £5,568,000
programme and £9,424,000 administration costs and £282,000
capital as a result of the operation of the Overseas Pricing Mechanism
in relation to the FCO. Unlike the British Council, this is a
dis-benefit to the FCO because the exchange rate has moved in
relation to a different baseline exchange rate.
Transfers of Budgetary Cover
4. Transfers of budgetary cover include:
— A transfer of £22,396,000 capital
expenditure from the Home Office's Border and Immigration Agency
for biometric passport equipment.
— £7,350,000 programme EYF expenditure
to capital to be transferred on to MoD as mentioned above.
— £5,363,000 programme expenditure
to Home Office for the Border and Immigration Agency work to cover
in-country costs incurred through the consideration of both Work
Permit and Highly Skilled Migrant Programme visa applications
and compliance costs associated with in-country activity to ensure
that visa holders are adhering to their conditions.
— £5,000,000 programme expenditure
to the Security and Intelligence Agencies.
— £1,750,000 programme expenditure
to Home Office for the Border and Immigration Agency to fund assisted
Voluntary returns.
— £100,000 programme expenditure
to the Security and Intelligence Agencies.
5. The sums transferred to the Security
and Intelligence Agencies, along with transfers to them from RfR2,
will be spent on sensitive conflict prevention, counter-narcotics
and good governance programmes.
6. No FCO activities are expected to be
reduced as a result of the above transfers. Transfers between
government departments such as these are a routine occurrence
and are therefore incorporated in the normal budgeting process.
Neutral and Other Changes
7. We have increased other current expenditure
of £20,000,000, fully offset by income, for Consular and
Visa Work. Expenditure and receipts have been adjusted upward
to reflect current levels of income and this does not imply a
need to increase fees.
8. We have also increased capital expenditure
of £5,300,000 fully offset by non-operating income from asset
sales.
9. We have transferred £15,000,000
from non-cash resource to near-cash resource expenditure in respect
of release of restructuring provisions. Within non-cash resource
expenditure, we have also reduced depreciation and increased the
cost of capital to better reflect forecast outturn.
10. Transfers within RfR1 of £7,000,000
other current and £2,000,000 capital to grants for the BBC
World Service in respect of Farsi TV.
11. A transfer from RfR2 of £8,500,000
in respect of the Afghan Delivery Plan for combating illegal drugs.
RFR2 MAIN
ESTIMATES CHANGES
Take up of End Year Flexibility
12. We have taken-up £6,850,000 programme
expenditure for Global Conflict Prevention.
Claims on the DEL Reserve
13. Claims on the DEL reserve include:
— £95,845,000 programme expenditure
from the Africa Peacekeeping pool.
— £61,603,000 programme expenditure
from the rest of the World Peacekeeping pool.
Transfers of Budgetary Cover
14. Transfers of budgetary cover include:
— £3,413,000 programme expenditure
from DfID for conflict prevention in Africa.
— £1,500,000 programme expenditure
from DfID for conflict prevention in Sri Lanka.
— £31,000,000 programme expenditure
to MoD for Peacekeeping operations in the Balkans.
— £9,660,000 programme expenditure
to DfID for planned Global Conflict Prevention Activity.
— £2,200,000 programme expenditure
to the Security and Intelligence for expansion and capability.
— £1,500,000 programme expenditure
to MoD for planned Global Conflict Prevention Activity.
— £50,000 programme expenditure
to the Security and Intelligence Agencies for expansion and capability.
15. The sums transferred to the Security
and Intelligence Agencies, along with transfers to them from RfR1,
will be spent on sensitive conflict prevention, counter-narcotics
and good governance programmes.
16. No FCO activities are expected to be
reduced as a result of the above transfers. Transfers between
government departments such as these are a routine occurrence
and are therefore incorporated in the normal budgeting process.
Neutral and Other Changes
17. We have increased expenditure of £2,500,000,
fully offset by income from MoD, for Better Basra.
18. We have increased expenditure of £2,500,000,
fully offset by income from DfID, for Better Basra.
DETAILED LIST
OF CHANGES
Table 1
DETAILED EXPLANANTION OF CHANGES £M
| End Year Flexibility
|
| 7.350 | RfR1 Section A2 Take-up of programme End Year Flexibility for capital transfer to MoD
|
| 6.850 | RfR2 Section A3 Take-up of Global Conflict Prevention Pool End Year Flexibility
|
| 31.300 | RfR1 Section A7 Take up of capital EYF in respect of the FCO Estate
|
| 14.200 | Resource Total Change to DEL
|
| 31.300 | Capital Total Change to DEL
|
| Transfers from non-voted Departmental Unallocated Provision
|
| 5.000 | RfR1 Section A3 take up Programme DUP
|
| Transfers from programme to capital
|
| -7.350 | RfR1 Section A2 Take-up of programme End Year Flexibility for capital transfer to MoD
|
| -7.350 | Resource Total Change to DEL
|
| Transfers between section within the Estimate
|
| 8.500 | RfR1 Section A3 increase in grant from RfR2 Section D3 for Afghan Delivery Plan
|
| 7.000 | RfR1 Section B2 increase in grant-in-aid to BBC World Service from Section A2 for Farsi TV
|
| 2.000 | RfR1 Section D3 increase in capital grant to BBC World Service from Section A7 for Farsi TV
|
| Transfers from Other Government Departments
|
| 3.413 | RfR2 Section A3 programme transfer from DfID for conflict prevention
|
| 1.500 | RfR2 Section B3 programme transfer from DfID for Sri Lanka operations
|
| 22.396 | RfR1 Section A7 capital transfer from Home Office for biometric passport equipment
|
| 4.913 | Resource Total Change to DEL
|
| 22.396 | Capital Total Change to DEL
|
| Transfers to Other Government departments
|
| -31.000 | RfR2 Section D3 programme expenditure to MoD for operations in the Balkans
|
| -9.660 | RfR2 Section D3 programme expenditure to DfID for planned Global Conflict Prevention Activity
|
| -9.424 | RfR1 Section A1 administration transfer to HMT reserve for the Overseas Pricing Mechanism
|
| -5.568 | RfR1 Section A2 programme transfer to HMT reserve for the Overseas Pricing Mechanism
|
| -5.363 | RfR1 Section A2 programme transfer to Home Office for the Border and Immigration Agency
|
| -5.000 | RfR1 Section A2 programme transfer to the Security and Intelligence Agencies for expansion and capability
|
| -2.200 | RfR2 Section B3 programme transfer to the Security and Intelligence Agencies for expansion and capability
|
| -1.750 | RfR1 Section A2 programme transfer to Home Office for the Border and Immigration Agency to fund assisted voluntary returns
|
| -1.500 | RfR2 Section B3 programme transfer to MoD for planned Global Conflict Prevention Activity
|
| -0.100 | RfR1 Section A2 programme transfer to the Security and Intelligence Agencies for expansion and capability
|
| -0.050 | RfR2 Section A3 programme transfer to the Security and Intelligence Agencies for expansion and capability
|
| -7.350 | RfR1 Section A7 transfer of capital expenditure to MoD for operations in Afghanistan
|
| -0.282 | RfR1 Section A7 capital transfer to HMT reserve for the Overseas Pricing Mechanism
|
| -71.615 | Resource Total Change to DEL
|
| -7.632 | Capital Total Change to DEL
|
| Transfers from Central Funds
|
| 95.845 | RfR2 Section C3 Resource Reserve claim for drawdown of remaining peacekeeping funds for Africa
|
| 61.603 | RfR2 Section D3 Resource Reserve claim for drawdown of remaining peacekeeping funds for rest of the World
|
| 18.453 | RfR1 Section A3 Resource Reserve claim for FCO/HMT 50/50 International Organisations cost sharing agreement
|
| 16.500 | RfR1 Section A2 Resource Reserve claim for consular premiums collected in the UK
|
| 1.359 | Increased grant to the British Council from the Overseas Pricing Mechanism
|
| 0.151 | RfR1 Section A2 Resource Reserve claim for Emergency Disaster Relief Fund
|
| 7.400 | RfR1 Section A7 Capital Reserve claim FCO/HMT 50/50 International Organisations cost sharing agreement
|
| 193.911 | Resource Total Change to DEL
|
| 7.400 | Capital Total Change to DEL
|
| Increases in gross spending offset by Appropriations in Aid
|
| 20.000 | RfR1 Sections A2 and A5 for Consular and Visa work
|
| 2.500 | RfR2 Sections B3 and B5 for income from MoD for Better Basra
|
| 2.500 | RfR2 Sections B3 and B5 for income from DfID for Better Basra
|
| 5.300 | RfR1 Sections A7 and A8 for sale of surplus assets
|
| 134.059 | Net total change to Resource DEL
|
| 60.814 | Net total change to Capital DEL
|
Departmental Expenditure Limit (DEL) & Administration
Budgets
19. 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.
20. 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 DEL1,2 | 1,475,575
| 1,508.860 | 1,707.753
| 1,874.336 | 1,825.291
| 1,956.385 |
| Capital DEL | 101.971
| 86.621 | 116.626
| 131.792 | 160.275
| 243.567 |
| Less Depreciation1,3 | 67.072
| 64.010 | 67.106
| 108.675 | 81.505
| 76.459 |
| Total | 1,510.474
| 1,531.471 | 1,757.273
| 1,897.453 | 1,904.061
| 2,123,493 |
|
| 1 Figures for all years reflect the reclassification of impairment expenditure from DEL into AME.
|
| 2 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
| -1,9682 |
|
| 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
| 860.636 |
|
| 1 Figures for all years reflect the reclassification of impairment expenditure from DEL into AME.
|
DEPARTMENTAL UNALLOCATED
PROVISION (DUP) 2007-08
21. All FCO provision has been allocated in the Spring Supplementary
Estimate:
Table 4
2007-08 DEPARTMENTAL UNALLOCATED PROVISION
|
| Resource
| Capital |
|
| RfR1 DUP to meet unforeseen requirements arising in-year
| £0.0 million | £0.0 million
|
| RfR2 Global Conflict Prevention Pool | £0.0 million
| — |
| Total | £0.0 million
| £0.0 million |
|
END YEAR
FLEXIBILITY (EYF)
22. 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.
23. 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.
Table 5
ACCUMULATION OF EYF £ MILLION
|
| | Administration
| Programme | Total Resource
| Of which near cash |
Capital | Total
|
|
| Total FCO EYF Entitlement in Public Expenditure Provisional Outturn July 2007 (table 6—Cm 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
|
| EYF drawn down in Spring Supplementary | —
| 14.20 | 14.2
| 14.2 | 31.3
| 45.50 |
| Balance of Accumulated End Year Flexibility |
70.112 | 33.43
| 103.54 | 69.26
| 1.24 | 104.78
|
|
| (1) Admin EYF drawn down in Winter Supplementary will be spent as programme.
|
PUBLIC SERVICE
AGREEMENTS
24. The bulk of the increase in expenditure in this Supplementary
Estimate is take-up monies for the conflict prevention and peacekeeping
pools in RfR2 and international subscriptions in RfR1 to further
our PSA 3 on conflict prevention. We have also taken-up £31.3
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 strategic priorities and PSA's.
Other major changes impact on PSA 9, covering effective and efficient
consular and entry clearance services. These are the budget neutral
increase in other current expenditure and receipts of £20
million to cover increased consular and visa business, the transfer
from the Treasury Reserve of £16.5 million of consular income
and the £22.4 million capital transfer from the Home Office
for Bio-metric passport equipment.
Keith Luck,
Finance Director General
15 February 2008
|
