Foreign and Commonwealth Office Annual Report 2007-08 - Foreign Affairs Committee Contents

Note from the Foreign and Commonwealth Office and Foreign and Commonwealth Office Services prior to the Committee visit to Hanslope Park



  Hanslape House (later Hanslope Park) was built in 1692 by Basil Brent. Hanslope Park Estate was requisitioned by the Ministry of Defence in 1941 and in May 1942 the radio intercept station became fully operational. In September 1945 it was proposed to close Hanslope Park down. However, the Foreign Office Diplomatic Wireless Station at Whaddon Hall had outgrown its facilities and therefore the decision was made to transfer to Hanslope Park. Technical facilities at Hanslope Park underwent continual modernisation and in 1985 a new central receiver site building was constructed and equipped with the latest radio and mainframe computer equipment The Foreign Office purchased the 60 acre site from the Hesketh Estate in 1988 for £2.5 million.

  Changing technology led to a decision to abandon radio communication In favour of satellite and landline methods and in 1993 Hanslope Park ceased to be a radio communications centre. It continued to provide technical support and became a computing and administrative centre. Park House was refurbished between 1994 and 1995.

  The Edward Watts building was opened in 1991. It was designed especially to store and review the Foreign Office records prior to being sent to the Public Records Office.


  The 60 acre site is split between the FCO, which occupies approx 40 acres, and HMGCC, which occupies approx 20 acres. A total of nearly 800 FCO staff and FCO Services staff and 590 contract staff (Cap Gemini, Hewlett Packard and others) share the site which is self sufficient with an on site Nursery which opened in 2006, a gym, a restaurant, tennis courts and sewerage farm.

  There is significant pressure on accommodation at Hanslope Park with a number of the buildings requiring significant refurbishment and modernisation. Whilst the new ICT building will bring some additional space a significant proportion of that gain will be lost when the portakabins are removed next year. This was a condition of planning approval by Milton Keynes Planners for the ICT Building. The FCO have drawn up a Masterplan for the development of the site which has been approved by Milton Keynes Planners.

  The FCO is seeking to improve the sustainability of its operations at Hanslope Park through the implementation of an Environmental Management System, which is accredited under the International Standards Organisation (ISO 14001). Actions include improving the biodiversity of the site through construction of a pond in 2007, drawing up a travel plan, and investigating the feasibility of constructing a biomass boiler and wind turbine on the site.


  The ICT Building designed by GMW Architects and built by Sir Robert McAlpine was officially handed over to the Foreign Office on 18 June. The building can accommodate 425 staff in modem open plan working space and houses four data halls.

  The building has aspects of sustainable design which include re-cycling heat from the data centres, rain water re-cycling, solar hot water, atrium allowing air flow stack effect, thermal mass (coffered ceilings). The construction cost is £33.7 million.

  Security has already been upgraded at the rear entrance and work is now underway to provide the same level of security to the front entrance of the site.


  Hanslope Park is the FCO's agreed designated relocation centre. Since 2004 224 staff positions have been relocated from London to Hanslope Park, the majority being In IT with others drawn from Vetting Services and HR. Legalisation Department which requires facilities for direct public access, is being relocated to a newly leased building In Central Milton Keynes in JuIy. Additional non-secure type jobs will follow and also be located in Central Milton Keynes.



    —  FCO Services has existed since 1999, firstly as a Directorate of the FCO and then as an Executive Agency from 1 April 2006. Following 2 years successful trading as an Agency, FCO Services became a Trading Fund on 1 April 2008. As a Trading Fund, we remain part of the FCO and our relationship is one of long-term strategic partnership.

    —  FCO Services is based in 2 locations in the UK (London and Hanslope Park) with the majority of our staff based primarily in the latter. In addition, we have an overseas network of technical specialists who maintain embassy buildings and ensure their physical and technical security.

    —  FCO Services employs around 1000 staff and contractors. As of 1 April 2008, our staff included 23.9% woman, 6.1% from minority ethnic backgrounds and 3.3% with a disability.

    —  In 2007, FCO Services developed a new business strategy, focusing on our core strengths: the provision of secure ICT, secure logistics and the provision of a secure environment This strategy forms the basis of our five year Corporate Plan, approved by Ministers.

    —  A key part of our strategy is to grow the volume of our business with non-FCO customers. The FCO will, however, remain our priority customer and we are committed to maintaining a guaranteed supply of "mission-critical" secure services to the FCO.


  The services we provide fall into the following categories:

    —  Biometrics and border control

    We provide a range of services, including technical design, system development, testing and implementation. One of our key projects this year has been our work with Ukvisas on the implementation of their biometrics programme, helping them to complete the global roll-out of biometric data collection technology to 135 countries.

    —  Secure network solutions

    We deliver and maintain secure global IT solutions. A joint service delivery team from the FCO, FCO Services and Hewlett Packard maintains the FCO's global secure communications network and also provides secure hosting faclitles for lOT systems. We are currently working with Hewlett Packard to deliver the FCO's next generation global IT infrastructure and the joint team has met its first roll-out milestone, with the delivery of over 2000 desktops to the FCO's main building in London by May 08.

    —  Establishment security

    We provide project management services to build secure environments and deliver the physical and technical security solutions needed to protect them. As the UK National Authority for Counter-Eavesdropping (UKNACE), FCO Services is the UK governments centre of excellence on technical and protective security. To support the development of new products and services we have set up a specialist R&D function to manage our pipeline of innovations.

    —  Global management services

    Our technical management officers overseas provide secure services to protect staff, posts and communications channels, while our technical works officers provide professional advice on all aspects of maintaining an estate, property management services and health and safety management services.

    —  Secure logistics

    We work with strategic partners in the UK and around the world to provide secure logistical services, including the worldwide handling of mail through HM Diplomatic Bag service.

    —  Vetting

    We carry out security vetting for many UK government departments as well as for companies who deliver services to government. We provide security vetting for all levels of clearance, but have particular expertise in DV clearances, where we currently hold 25% of the market share.

    —  Translation and Interpreting

    We have a small In-house team, supported by external specialist translators, which provide a translation service from and into any sovereign state language. We also provide interpreting services for a range of events including summits, conferences and visits.


    —  We have revised our governance structure this year to reflect more accurately our responsibilities as an Agency and then a Trading Fund. Our Chief Executive has ultimate responsibility for the day-to-day management of FCO Services and, as Accounting Officer, is accountable to Parliament for ensuring the effective use of public funds.

  The Chief Executive is supported by:

    —  The FCO Services Board: meeting at least 6 times per year, this Board is chaired by a Non-Executive Director and includes 3 further independent Non-Executive Directors in addition to the Chief Executive and FCO Services Directors. This Board reviews our strategic agenda, sets corporate policy and monitors performance.

    —  The Audit Committee: meeting at least four times per year, this Committee is also chaired by an independent Non-Executive Director and includes the FCO's Finance Director as well as external and internal auditors.

    —  The Executive Committee: meeting weekly, this committee, chaired by the Chief Executive and attended by FCO Services' Directors, focuses on the management of day-to-day operations.


    —  Developing the skills of our staff in the run-up to our transition to Trading Fund status and in preparation for operating in a more competitive environment has been a key priority for FCO Services. As part of a wide-ranging change programme, we have delivered training programmes covering financial skills as well as training to support the embedding of our new commercial process.

    —  We are now focusing on our longer term skills gaps. Our plans to address them include the expansion of our apprenticeship scheme to enable us to grow our in-house specialist skills and build our pipeline of talent and help reduce our use of external contractors.

    —  We have also focused on bringing key skills into the organisation and have recruited approximately 50 new members of staff with expertise in areas such as IT support, counter-measures, vetting and electrical engineering.

    —  We recognise that the organisation has gone through a period of significant change and the buy-in of our staff is crucial to FCO Services' success. We therefore have in place a programme of communications, including opportunities for staff to interact with the Chief Executive and Directors. We monitor feedback through a range of channels including an annual employee opinion survey and the IiP process.


  The Transaction Processing Team is part of the FCO's Finance Directorate and is headed by Iain Morgan.

  Transaction Processing covers the following areas.

Strategic Treasury

  Responsible for the FCO's banking and Cash Management operations. Key activities include (a) the forecasting and securing of funding in up to 33 different currencies, sufficient to cover the FCO's day to day expenditure requirements in the UK and at our Overseas Missions; and (b) ensuring bank accounts and ledgers properly reconcile

Management Accounting Systems

  Responsible for developing and maintaining finance reporting and costing systems used within the FCO. To support financial and wider processes across the FCO and developing management information capability, including activity recording.

Balance Sheet Integrity

  Responsible for ensuring all balance sheet reconciliations are performed and validated to support the production of the monthly Key Performance Report and Annual Accounts.

Systems Accounting

  Responsible for maintaining the General Ledger and the month end close. Provides Prism Super User skills for all financial processes.

Fixed Assets and Projects

  Responsible for maintaining the FCO Fixed Assets Register (value £1.4 billion).

  Responsible for maintaining Prism Projects Ledger, and providing the split of Programme costs (£1.1 billion).

Accounts Receivable

  Responsible for recovering money from our Partners Across Government through the Central Invoicing Unit.

Accounts Payable (UK Processing Centre)

  Developed as part of the FCO's Shared Services Programme, the UK Processing Centre (UKPC) was opened in November 2007 and its establishment has provided the opportunity to bring a more professional approach to the Purchase to Pay process. The UKPC comprises a small team from Transaction Processing Centre (TPC) and Corporate Procurement Group (CPG).

  The UKPC is responsible for the following areas:

Invoice Processing

  Following a roll-out programme that started with key suppliers American Express and FCO Services, UKPC gradually took on responsibility for processing all invoices for UK departments. On average the Invoice team process 4,200 invoices per month.

Payment Processing

  Payments have always been made centrally in the UK for the UK and that work now falls under the remit of the UKPC. Overseas posts enter and pay their own invoices, unless the Suppliers are paid in sterling, in which case it falls to UKPC to facilitate that payment. The average value of payments par month is GBP124 million, excluding any foreign currency payments.

Foreign Exchange

  UKPC have recently taken control of foreign exchange payments, this requires making foreign currency deals with the bank, as and when required.

Supplier Set-up and Maintenance

  The team is responsible for setting up any new suppliers required for the UK and also for maintaining the integrity of the data world-wide.

Corporate Cards

  The team is responsible for issuing corporate credit cards and virtual government procurement cards. This is managed through D.Cal, our web based processing software. All transactions on the card are held on D.Cal for cardholder to validate anywhere in the world. The data is then lifted into Prism to record the transactions in the GL and Projects. Payments can then be made to the card processing bank by the due date. Average monthly spend on the cards is GBP 1.5 milllon.

Purchase Order Processing

  Purchase order processing is still in the early phases of roll-out for UK departments. Currently UKPC process all purchase orders raised on supplier FCO Services and all requisitions for one UK department, this accounts for approximately one third of all purchase orders raised in the UK. Continuation of the roll-out programme is constrained due to lack of accommodation and resource. The intention is to process all purchase orders for UK departments, and also orders for overseas posts that are placed on UK suppliers.


  The Committee will be aware of the outcome of the recent OGC Gateway 0 Review of the overall programme. We are currently working through the implications of that review and how best to take forward the shared services agenda in the FCO. The Programme's new Director, Andrew Lloyd, took up his new role on 19 June. One of Andrew's early priorities will be to present his initial impressions to the FCO Board and agree a strategy going forward.

  Meanwhile work continues apace on negotiating a Facilities Management (FM) contract for the UK Home Estate and 14 posts in North West Europe. We have now received completed tender bids from two of the market leaders. Evaluation is now complete and we believe that we are well placed to let a contract that provides increased efficiency and value for money in delivering FM services going forward. The OGC have just completed a Gateway 3 review of this procurement and have given us the green light to move towards contract signature. The OGC Review Team considered the overall project management and communication of the Facilities Management Project to be examples of good practice. Mobilisation is scheduled to begin in September with completion of go-live by mid 2009.



    —  Five Star Finance programme set up in July 2007 with Finance Director as Programme Manager.

    —  National Audit Office supplied definitions of the effectiveness of finance functions, ranging from one star (worst) to five stars (best).

    —  Objective of programme is to take FCO financial management from two star performance rating (2007) to five star rating by mid-2009 and gain recognition as a Whitehall leader.

    —  Milestones—to reach 3.5* by July, 4* by October, 5 star by June 2009. Published on FCONet and progress reflected every month.

Organisational Structures

    —  New Finance Directorate structure introduced 1 April 2008 based on internal and consultancy studies.

    —  Streamlined number of Resource Management Units (RMUs) to eight, amalgamating where possible to share resources and centralise some processes in the UK Processing Centre. RMUs act as links between the corporate centre and our Posts and UK units.

    —  Budgets of the finance function have been reduced to reach our targets from the CSR07 settlement.

Management Information and IT Systems

    —  The monthly Board reports are being improved—both speed and quality.

    —  We are overhauling our management information requirements and reports.

    —  Work underway to take on the new Oracle budgeting tool from 2009-10.

    —  We have bought the CIPFA financial management model to help benchmark and improve our performance. In use at other Whitehall departments. Action plan by end of September 2008.

    —  The Board has approved 10 specific measures to improve our financial management in 2008-09.

Controls and Risk

    —  We are shortening the cycles for the implementation of internal audit recommendations.

    —  We are intensifying the use of `self audit' packages and ensuring that controls required by the NAO are being applied, thus enabling faster year-end external audit.

    —  Standardising and streamlining the delegated authority processes, relying on built-in IT controls with better training and guidance.

    Skilled staff are key to improving financial management in the FCO. We therefore have a substantial programme to raise the skills of our staff.

Professionalising the finance community

    —  By end of 2008, all SMS and 60% of Band D staff in Finance Directorate will be professionally qualified. In the last 18 months, a qualified DG Finance and Finance Director have been recruited.

    —  10 B3 trainees to new FCO Accountancy Training Scheme have been recruited through external recruitment with five Partners Across Government (led by DWP). Trainees start in September.

    —  Three Fast Stream Finance Option trainees studying for their accountancy exams in Colombo, Tel Aviv and Warsaw, using local facilities and remote learning.

    —  For other staff we are defining financial skills standards, and developing a new training programme and testing to deliver those standards.

    —  Working with Partners Across Government to facilitate interchange between departments and open up Whitehall-wide careers for finance specialists.

Raising financial management standards in the wider FCO

    —  Have had a major push on getting all SMS and band D staff to complete the Professional Skills for Government e-learning and two-day course. 75% of the target bands are expected to have completed the course by the end of September.

    —  Developing training for budget managers, DGs and Directors.

Finance Direct

    —  From April 2008 provides help to our network with any finance query.

    —  In first two months of operation volume of calls increased (compared to calls to old service in same period last year) by 63%, and call resolution time went down by 37% to 3.51 days with no increase in staff numbers.

    —  Service enables us to track finance issues that are causing problems in the network, and to respond to those issues.

    —  Finance Direct also monitor posts' performance on Prism through the Prism Performance Indicators and provide targeted support to the posts that need it most.

20 June 2008

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Prepared 8 February 2009