Letter to the Second Clerk of the Foreign
Affairs Committee from the Head, Parliamentary Relations Team,
Foreign and Commonwealth Office
AUTUMN PERFORMANCE
REPORT AND
CSR07 VALUE FOR
MONEY DELIVERY
AGREEMENT
Thank you for your letter of 19 February in
which the Committee asked a number of questions on the FCO's Autumn
Performance Report and CSR07 Value for Money Delivery Agreement.
I will reply to these questions in the order in which they appear
in your letter.
PERFORMANCE AGAINST
PSA TARGETS
1. What events have occurred in the past six
months to cause the FCO to change its assessment of progress against
the following indicator from the 2007 Departmental Report to the
2007 Autumn Performance Report
(i) PSA 7 Islam target B3—government
accountability indicator (shifted from "slippage" in
the Departmental Report to "on course" in the Autumn
Performance Report)
The change in assessment of the indicator in
question is due in part to the establishment of the Office for
Security and Counter Terrorism (OSCT), its increased staffing,
and in part to the refreshed Prevent Strategy. These two factors
have resulted in a much clearer Prevent target against which the
FCO is working, and an organisation in the centre to hold the
FCO accountable for delivery. With the introduction of a new,
cross government PSA on Counter Terrorism, this accountability
will only improve.
2. Why has the FCO assessed its performance
against the targets, PSA 9 B5—birth registrations and PS9
B6—death registrations as being "on course", when
data for 2006-07 indicate that the FCO's performance was below
its targets in these areas?
The SR04 period is from April 2005 to March
2008. When assessing whether the target is `on course', we looked
at the previous years figures to determine the trend. Based on
the figures, there is an upward trend towards the target, and
it is on that basis that we have said that by the end of the SR04
period, we aim to be on course to have achieved our target for
both birth and death registrations. The breakdown for the previous
two years is as follows:
|
| Financial Year | Birth Registrations
| Death Registrations
|
|
| 2005-06 | 89.81%
| 86.57% |
| 2006-07 | 95.14%
| 95.64% |
|
The target for birth and death registrations is 98%. The
trend from the previous two years leads us to believe we are on
course to achieving the target.
3. The Autumn Performance Report states that the FCO is
slipping against its target for the issuing of overseas passports
(PSA 9 B1) because of the introduction of the Biometric Passport
(p 34). The Report notes that Department's overall performance
in this area has improved recently as working practices have adapted.
Is the FCO expecting to meet the target for 2007-08?
Initial figures suggest that although we may not meet the
target, there is an improvement on last year's figures. Further
details and an analysis of our results will be available with
our figures for 2007-08.
4. What are the visa and consular service's new targets
under the 2007 Comprehensive Spending Review (CSR)?
Due to UKvisas operations no longer falling under our remit
from 1 April 2008, the FCO will no longer be measuring performance
against a set of targets for visa operations. For the CSR07 period,
UKvisas will not have any specific visa targets as such, but will
contribute to the new Home Office-led PSA on Migration.
Consular Directorate has made significant changes to its
data collection methods to allow for more frequent and detailed
reporting for CSR07. The introduction of a Balanced Scorecard
completed by all posts on a monthly basis, as opposed to the previous
yearly exercise, will allow for more targets. Our outcomes for
the CSR period have been set out in the FCO DSO framework.[12]
5. How is progress against the objective underpinning the
SR 2004 target, PSA 7 "Islam target—to increase understanding
of and engagement with Islamic countries and communities"
to be measured in the period covered by the 2007 CSR?
The rationale for the SR04 PSA 7 target was the FCO's contribution
to the Prevent workstream of HMG's Counter Terrorism (CT) effort
under CONTEST. The CSR07 period is covered by a new, cross government
CT PSA, which also includes metrics for the FCO's continued work
on PREVENT. Underpinning those metrics are the FCO's Capability
Assessments, approved across Whitehall, which provide a methodology
to measure work on Prevent in priority countries. These Assessments
have been specifically designed to establish baselines and show
progress against this objective.
6. Some departments such as the Treasury and the Department
for Work and Pensions have published indicators for their Departmental
Strategic Objectives (DSOs). When will the FCO publish indicators
for its DSOs? To what extent will there be an overlap between
indicators for the PSAs and indicators for the DSOs?
The new DSO framework was published on 1 April 2008. For
the CSR period, the FCO will be the lead department on the Conflict
PSA, whilst also being a key delivery partner in the PSAs for
Counter Terrorism, Poverty Reduction, Migration, and Climate Change.
Where possible we have sought to define DSO outcomes and indicators
that are consistent with, and which support, our commitments under
the PSAs.
DATA SYSTEMS
TO ASSESS
PSA TARGETS
7. The National Audit Office (NAO) has assessed that the
data systems which are used to assess three of your PSA targets
are "not fit for purpose" (Fourth Validation Compendium
Report: Volume 2, Report by the Comptroller and Auditor General,
19 December 2007, p 23-26). What checks are you carrying out to
ensure that the data systems which will be used to measure the
targets under the 2007 CSR will be fit for purpose?
We have modified our systems in line with the recommendations
made by the NAO in their Validation Compendium reports. We will
work closely with the NAO during the CSR period to ensure that
the data systems used to measure the Conflict PSA (for which the
FCO leads), reach the required standard.
8. The NAO reports that the data system underlying the
reporting of progress against the target for effective and efficient
clearance services (PSA 9a) is currently not fit for purpose because
it excludes the speed of processing at UKVisas' commercial partners
(used in their outsourced operations), which deal with more than
half all Visa applications (p 25). What is the FCO doing to measure
and monitor the speed of processing visas at UKvisas' commercial
partners?
The current PSA targets expire at the end of March 2008 but
UKvisas will continue to measure and monitor the speed of visa
processing as an integral part of the UKvisas Balanced Scorecard.
UKvisas are planning to replace these targets from 1 April 2008
with new customer service standards that will specifically include
the measurement of visa handling time at UKvisas' commercial partners.
In addition, UKvisas now receives monthly management information
reports from its commercial partners that include processing times.
9. The NAO reports that "the data system underlying
the reporting [for the satisfaction with consular services] is
not fit for purpose because conducting a survey relating to only
one randomly selected week in the year does not give an accurate
picture of satisfaction across the whole year" (p 26). What
is the FCO doing to improve the validity of the survey which it
uses to measure customer satisfaction with the consular services?
The introduction of a monthly Consular Balanced Scorecard
has allowed for more frequent reporting against a set of key measures
that link into our Consular Strategy. One of these measures, based
on our theme of "quality of service", is that "90%
of customers are satisfied with our service". We have advised
posts to have a customer satisfaction survey available to be filled
in by all customers who visit a post. Posts will then collate
and return these figures to us at the end of each month. We will
be able to therefore determine our progress against that measure.
EFFICIENCY TARGETS—2004
COMPREHENSIVE SPENDING
REVIEW
10. The Autumn Performance Report states that efficiency
gains were estimated at £122.4 million by the end of September
2007. Of that amount, how much was cashable?
The figure of £122.4 million can be broken down as £80
million cashable and £42.4 million non-cashable. This information
was provided in the Autumn Performance Report on Page 42.
EFFICIENCY TARGETS—2007
COMPREHENSIVE SPENDING
REVIEW
11. The FCO has now published its Value for Money Delivery
Agreement which gives an outline of how the FCO will generate
its efficiency savings. Please could we have a schedule which
gives a more detailed breakdown of the individual projects along
with projected efficiency savings. The Committee would treat this
in confidence and is aware that it would be provisional and subject
to change
As part of CSR07, the FCO has agreed a target to achieve
3% annual cashable efficiency savings against our 2007-08 near-cash
DEL baseline by 2010-11. The FCO expects VfM saving of £144
million by 2010-11 (£130 million resource and £14 million
capital). VfM savings estimates are calculated from a counterfactual
baseline, using the HMT deflator.
SUMMARY TABLE
OF FCO VFM
PROJECT EFFICIENCY
TARGET
|
| Projects | Efficiency Target
|
|
| Europe ZBR | £9,000,000
|
| Roll out of Europe ZBR to other regions |
£2,900,000 |
| IT ZBR | £9,500,000
|
| Finance Function Review | £1,700,000
|
| Improved procurement | £11,000,000
|
| Increased FCOS efficiency | £6,000,000
|
| Reducing the overhead costs of overseas Representation
| £3,000,000 |
| Increased UKTI Efficiency | £4,400,000
|
| Rolling back grade-creep in London | £3,200,000
|
| Future Funding of VIP Suites | £2,000,000
|
| Gratis Visa | £2,000,000
|
| Reduction on time spent by Defence Attaches on non-defence activities
| £10,500,000 |
| Language Training | £1,500,000
|
| BBC World Service efficiencies | £23,270,000
|
| British council efficiencies | £18,240,000
|
| Allocative Efficiencies* | £41,500,000
|
| Capital Efficiencies | £9,000,000
|
| Total | £158,710,000
|
| Restructuring Cost | £8,400,000
|
| Net Total | £150,310,000
|
|
The table above lists all the current FCO VfM projects with
the exception of the Shared Services Programme. The predicted
benefits from Shared Services summarised in the FCO's VfM Delivery
Agreement are currently being reviewed. Once the review concludes
we will write to update the Committee.
The Committee will note that, notwithstanding this, total
forecast efficiency savings still exceed our CSR07 VfM target.
This is to ensure that the FCO has a contingency in place to achieve
the target in case of under-delivery by individual projects. All
of these figures are provisional and are subject to change.
We will continue to develop all of the VfM projects, particularly
those aimed at producing savings in the medium to long term eg
Shared Services Programme. As a result, savings delivered by individual
projects may change. Any shortfall in meeting the overall efficiency
target will be made up through additional savings or through new
efficiency projects that will be developed during the CSR period.
Note *Allocative efficiencies are efficiencies obtained by
prioritising work in order to achieve maximum impact of our resources.
12. The 2007 Pre-Budget Report & CSR states that FCO
will identify value for money reforms that will make annual efficiency
savings of £144 million by 2010-11. The FCO's Value for Money
Delivery Agreement gives an account of how the FCO will generate
£86.5 million saving (shared services programme—£16
million, IT zero-based review—£9.5 million, improved
procurement project—£11 million, Europe zero-based
review—£9 million, BBC World Service—£23
million, British Council—£18 million). How does the
FCO plan to generate the additional £57.5 million efficiency
gains, that the Value for Money Delivery Agreement does not account
for?
The above table lists all the current VfM projects that will
contribute toward the overall FCO target of £144 million.
SHARED SERVICES
13. The creation of Shared Service Centres is set to deliver
£16 million efficiency gains and the FCO aims to share processes
across the FCO's global network of over 240 overseas posts. (i)
What is your estimate of headcount reductions that will occur
as a result of Shared Service Centres being set up? (ii) How have
staff been prepared for their introduction? (iii) Where will the
Centres be located?
(i) We are currently working on the design for our first
Shared Service Centre. The detailed design will determine which
roles will in future be carried out in the Shared Service Centre.
That work will help determine the potential for headcount reductions.
(ii) Communications is a key element of the Shared Services
Programme. We have been communicating with staff in a variety
of ways to prepare them for the introduction of Shared Service
Centres, including workshops, visits to posts, presentations to
heads of mission, user-groups for heads of mission and management
officers, and through the FCO's internal magazine, bulletins and
intranet. Change Management Training will provide support to both
managers and staff.
(iii) The first Shared Service Centre will be in the UK
covering the UK and Europe. We will consider the locations for
further Shared Service Centres as our plans to cover other areas
develop.
14. The FCO's VFM delivery agreement states that the Shared
Service Centres Project will initially focus on finance and procurement
processes and will in a later phase expand to cover HR processes.
What steps are you taking to ensure that the quality of services,
particularly with regard to HR processes does not fall as a result
of them being provided from a distance?
Three principles underpin our design work for Shared Service
Centres: standardise, simplify and streamline and our staff, customers
and suppliers will benefit from simplified, standardised and streamlined
services. We shall ensure that standards of service are managed,
maintained and where possible enhanced, drawing on best practice
in shared services in the public and private sectors, through
monitoring, measuring and continuous process improvement on which
we will seek the views of staff and customers. We have not yet
started the development of HR Shared Services.
15.You have previously told us that the separate "FCO-DFID
Shared Service Delivery plan seeks to increase the proportion
of co-located offices by over 10% and the proportion of DFID staff
in co-located offices by over 25% by the end of the CSR07 period."
Which offices are intended to become co-located with DFID?
On current planning assumptions, the following offices are
intended to become co-located by the end of the CSR07 period:
Abuja, Bridgetown, Dhaka, Harare, Jerusalem, Kampala, New Delhi,
and Pretoria. We are also looking at proposals for co-locating
in Beijing.
INFORMATION TECHNOLOGY
ZERO BASED
REVIEW PROJECT
16. The FCO's VFM delivery agreement states that the re-procurement
exercise of the Telecommunications Network is due to commence
with a view to re-tendering and letting a new telecommunications
contract by May 2010 and that "significant savings have been
negotiated with our existing telecommunications supplier, Global
Crossing". How does the FCO seek to reduce costs through
re-tendering its telecommunications contract, for instance will
it request different or reduced services?
The FCO is seeking to reduce the cost of its global telecommunications
service requirements by taking advantage of:
— The reduction in IT and communications unit costs
that has occurred over the period of the current contract, and
this trend is expected to continue for the foreseeable future.
Whilst the FCO has managed to negotiate significant reductions
in its unit costs in the current contract, the expectation is
that the competitive pressure provided by the procurement will
further lower unit costs.
— The increasing convergence in the IT, communications
and media market places. This means that suppliers will be able
to offer lower cost and higher functionality solutions, for example
IP Telephony. As well as these direct cost savings, the new solutions
will also enable the opportunity for further cost savings elsewhere
in the FCO, for example through enabling the centralisation of
some infrastructure that is currently located in each post.
— The improved terrestrial public communications
networks that have been put in place in many countries over the
period of the current contract, and this trend is expected to
continue for the foreseeable future. A major cost driver is the
use of satellite communications, and whilst the FCO has managed
to negotiate significant reductions in the use of satellite communications
in the current contract, the expectation is that the FCO will
be able to continue to reduce costs in this area over the life
of the new contract.
— Learning lessons and using best practice in this
procurement, which is being taken from other FCO ICT programmes
and from similar services across the public sector. One key lesson
is to ensure that future contracts have innate flexibility so
that further, future, cost reductions can be realised.
— The new Transformational Government Public Sector
Network strategy, which aims to commoditise basic network services
so that they can be procured more effectively.
— Opportunities to align network procurement activity
across government to achieve economies of scale—notably
through increasing the scope of the Programme to cover the successors
to the Government Secure Intranet (GSi) and Managed Telephony
Service (Mts) services. The business case for change, and related
financial modelling, is currently under development.
With regard to the scope of the services being procured,
the requirement is primarily being expressed in business and output
terms, which is different from the current contract which is primarily
an input based requirement. The overall service effect as experienced
by the user will be at least as good, and increasingly better
over the life of the new contract, than that delivered by the
current contract.
EUROPE ZERO
BASED REVIEW
17. The FCO Delivery Agreement states that the Europe Zero-Based
Review will generate £9 million efficiencies through identifying
changes to the management of FCO estates, transport and other
support services, focusing the work of individual missions more
tightly on key priorities and finding ways of deploying staff
more flexibly to meet changing demand. Can you provide specific
examples of how the FCO intends to do this?
As part of the Europe Zero Based Review savings as a result
of the changes to the number of UK based staff in our offices
in Europe amount to over £2 million. Of this, £646,528
relates to the localisation of Deputy Management Officer positions
in posts such as Copenhagen, Oslo, Istanbul and Kiev, in addition
to savings of £127,999 realised from the localisation of
PA slots in posts such as Sarajevo, Nicosia, Berlin and Budapest.
Over the CSR period the Europe wide transport fleet will be reduced
by at least 50 vehicles, saving running costs of £236,141
and reducing our capital requirement by £610,621. Changes
to the numbers and grades of local staff in our missions in Europe
will produce savings of £855,256 over the three year period.
BBC WORLD SERVICE
18. The FCO's Delivery Agreement states that the BBC World
Service is committed to achieve £23 million of value for
money savings over the CSR period through a number of individual
efficiency initiatives and possibly "reductions in some higher
cost output which do not have significant audience impact".
What are these potential areas of reductions in higher cost output?
Savings have been identified through efficiencies as well
as reprioritisation from within existing services. All changes
are driven by strategic priorities and value for money considerations
underpinned by the strategic review "World Service 2010"
undertaken after the last SR in 2004.
At the beginning of 2008, there were cuts to short wave transmissions
in the Caribbean (where there is a large emerging FM market),
in Europe (where there is increased FM, online and BBC World TV
penetration) and in South East Asia (a maturing market again with
increased FM and online penetration). These cuts will bring annual
savings of at least £580,000.
In a number of markets radio audiences have been in decline,
and as a result, some language services are very expensive in
terms of cost per listener. A greater emphasis on new media is
clearly the future for these markets. Therefore, in such services
any restructuring proposals will aim to increase the focus on
the new media offer by reducing the radio output to core news
and current affairs programming. For example, it has become clear
that the future of the Spanish Service lies in the internet and
in television as radio ceases to be the most effective means of
reaching our audience. Therefore, there will be greater focus
and investment into bbcmundo.com, making it the core activity
of the Spanish Service, attracting and retaining sophisticated
news-aware audiences. A move away from Spanish radio programming
keeping all core news bulletins will yield net annual saving of
£500,000.
3 April 2008
12
http://www.fco.gov.uk/en/fco-in-action/strategy Back
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