Letter to the Second Clerk of the Committee
from Head of the Parliamentary Relations Team, Foreign and Commonwealth
Office
FCO SPRING SUPPLEMENTARY ESTIMATES—FAC
QUESTIONS
Thank you for letter of 22 April 2008 regarding
issues arising from the Spring 2007-08 Supplementary Estimates
round. This reply addresses the issues raised in your letter and
follows its format, with replies to the questions asked immediately
following the restated questions.
FCO ESTATE
Why is the Department unable to link the £31.3
million EYF in respect of the FCO estate to individual programmes
and/or projects? How has the Department assessed the overall level
of capital expenditure across all FCO capital budget holders to
arrive at the £31.3 million figure?
(A) The Investment Committee allocated a
capital ceiling of £104.9 million to Estate projects for
2007/8 and the programme was planned on this basis. The capital
baseline at the start of the financial year was lower than the
total capital allocated to budget holders. Over allocation above
the baseline was on the presumption that the FCO would be able
to supplement the capital baseline with EYF. All capital budget
holders, including Estates, provided their forecast estimated
full year outturn in December 2007 and this was the basis of the
EYF £31.3 million bid.
PEACE-KEEPING
FUNDS
The Spring Supplementary Estimate requests a £95.845
million Reserve claim for peacekeeping within Africa and a £61.603
million Reserve claim for peacekeeping within the rest of the
world. What will these funds be used for? Are these sums in line
with the Department's expectations of what would have to be drawn-down
at the beginning of the year?
The sums requested for peacekeeping represent
the draw down of the outstanding balance of the UK's Peacekeeping
Budget of £374 million. The 2007-08 budget allocation was
agreed by MoD, DFID and FCO Secretaries of State and the Chief
Secretary, HMT in June 2007. The sums drawn down are in line with
the Department's expectations at the beginning of the year.
Around 50% of the funds drawn down at Spring
Supps were used to pay the UK's assessed (obligatory) contributions
to UN, EU and OSCE peacekeeping missions (including the AU/UN
mission in Darfur, the UN mission in Lebanon, the UN mission in
the DRC, the EU Rule of Law Mission in Afghanistan and the EU
and UN missions in Chad). The remainder was used to pay the following:—the
salaries and related costs attached to the secondment of UK military,
police and civilian personnel to peacekeeping operations worldwide;
UK bilateral support for the training and equipping of battalions
from African troop contributing countries deploying to the UN/AU
hybrid mission in Darfur (UNAMID); financial support to the AU
peacekeeping mission in Somalia (AMISOM); financial contributions
to criminal courts and tribunals (the Special Court for Sierra
Leone and the Khmer Rouge Tribunal) and a contribution to a new
project fund designed to increase the number of helicopters available
to multilateral (peacekeeping) missions through offering financial
support to poorer allies for equipment upgrades and pilot training.
CONSULAR PREMIUMS/FCO
AND HMT INTERNATIONAL
ORGANISATIONS COST
SHARING AGREEMENTS
Why do Reserve claims have to be made in the Spring
Supplementary for consular premiums collected in the UK and the
FCO/HMT International Organisations cost sharing agreements? Are
such Reserve claims likely to increase in the future?
(A) Supply Estimates to Parliament need
to be taut and realistic. This means that the amount of provision
sought in the Main Estimates must reflect the department's best
view—at that time—as to the amount of expenditure
likely to occur in the upcoming financial year. As the year progresses
and more information becomes available the department's view may
alter, leading to a request for more resources in a supplementary
Estimate. It is not possible to say with certainty what the future
claims relating to consular premiums and International Organisations
might be; but the Foreign and Commonwealth Office will continue
to manage down costs and drive out efficiencies wherever possible.
RESERVE CLAIMS
Is the Treasury expecting the Department to use
any future underspends to pay back its Reserve claims? If so what
impact will this have on other projects or programmes in the Department,
which could potentially underspend, given that they cannot roll
forward underspends in the normal way through EYF?
The Treasury's budgeting guidance states that
if access to the Reserve is agreed and a Department's DEL is increased
in a particular year, the additional provision will normally be
recouped from any underspending that emerges in that year or future
years, and effected by a reduction in EYF entitlements.
A number of Reserve claims have been exempt
from recoup. Consular income raised by the Home Office through
the passport fee and repaid to the Treasury is claimed back by
the Foreign and Commonwealth Office in the Spring Supplementary
Supply Estimate. Similarly, some consular income paid on to the
Treasury for the Emergency Disaster Relief Fund is reclaimed by
the FCO from the Reserve but has not been recouped. Spending on
RfR2 (Conflict Prevention) is entirely funded from the Reserve
but we have in the past been able to claim EYF for underspends
generated by RfR2 programmes except Peacekeeping. Peacekeeping
underspends are recouped from the Peacekeeping Budget but Treasury
has not reduced RfR1 (Promoting internationally the interests
of the UK and contributing to a strong world community) EYF due
to RfR2 Reserve Claims.
Reserve claims arising from the normal operation
the Overseas Pricing Mechanism (OPM) and the International Subscriptions
Cost Sharing Agreement (both in RFR1) were also exempt from recoup
until the 2007 Comprehensive Spending Review that abolished the
OPM and removed the recoup exemption from the cost sharing agreement.
The Foreign and Commonwealth Office is committed
to developing its financial management systems in order for the
department to live within its allocated resources and deliver
on its key priorities.
16 May 2008
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