Letter to the Second Clerk of the Committee
from the Head, Parliamentary Relations Team, Foreign and Commonwealth
Office
Thank you for your letter of 18 August raising
questions on the FCO 2007-08 Departmental Report and the 2008-09
Main Estimate. Your questions are answered in order, with your
original questions shown in italics:
STRATEGIC PRIORITIES/DSOS
1. The FCO's Departmental Report for 2007-08
shows that the new strategic framework consists of three core
elements and that "these [core elements] are the basis on
which the FCO—like all government departments receives its
funding from the taxpayer, and against which its performance is
judged" (p.16). How will the FCO objectively measure its
performance against these three core elements? Will these core
elements have targets and indicators against which progress could
be measured?
Answer:
FCO performance during the CSR07 period will
be measured against the eight agreed Departmental Strategic Objectives
(DSOs) which make up the three core elements. Each of the eight
DSOs is underpinned by a set of outcomes. The outcomes are in
turn underpinned by a set of key indicators/measurements. Performance
against the eight DSOs will be based on an assessment of the outcomes
as measured by the key indicators. See below on what will be published
in the Departmental Report.
2. In the 2007-08 Departmental Report, it
is stated (p 85) that "each of our DSO owners produced a
`DSO plan' to identify the key outputs that they expect to deliver
during the next three years." Are these plans publicly available?
Could you provide the committee with summary of the key outputs
for each DSO?
Answer:
Our DSO plans are internal management documents
and have not been made publicly available. However, the DSOs and
outcomes that underpin them, are on the FCO website and will be
included in future Departmental and Autumn Performance Reports,
so that the public is aware of the targets the FCO is working
toward during the CSR period.
The DSOs and outcomes can be found at:
http://www.fco.gov.uk/resources/en/pdf/pdf1/CSR-07
3. The Departmental Report also states that
"each of these outputs [in the DSO plan] is in turn supported
by a series of achievable outcomes, and by delivering these outcomes
we will be able to measure our performance during the reporting
period" (p.85). Could you provide the committee with details
of these "achievable outcomes" including how they are
to be measured and the timescale over which they are to be achieved?
Answer:
The Technical Note mentioned in question 2,
provides a full list of the DSOs, outcomes, and target indicators
that make up our CSR07 Performance measurement framework. The
outcomes span the entirety of the CSR period. Progress against
each DSO will be reported in the Autumn Performance Report and
Departmental Report along with information about the data used
to measure each outcome.
4. The eight constituent parts of the three
core elements represent the new DSOs and replace the existing
framework of ten priorities. Given the emphasis on achieving outcomes,
why was it felt that one of the new priorities should be input-based:
"a flexible global network of staff and offices servicing
the whole of the British Government"?
Answer:
The FCO's Strategic Framework will ensure that
the FCO delivers more effectively for HMG and the UK as a whole.
While our policy and public service goals reflect our assessment
of where the FCO can add the greatest value on the issues that
are most important to the UK and British people, DSO 1 ("A
flexible global network serving the whole of the British Government")
makes it clear that we deliver for the Government as a whole.
This recognises that our network of Embassies is an asset for
the FCO, for Government and for the UK. The network needs to be
flexible because UK priorities, and the world, will continue to
change. So the network needs to be able to adapt its footprint
in response.
Our Ambassadors and Posts abroad will continue
to work not just to deliver the new FCO policy goals and services,
but all of the Government's international priorities. Our Posts
will operate as a base for all Whitehall departments on which
they can put their own people and resources to deliver their own
priorities in the countries concerned. Our business plan for DSO
1 measures how the network is delivering on behalf of the rest
of Government, not least through a stakeholder survey of Whitehall
partners. The first survey, conducted in the first quarter of
this financial year, revealed that our Whitehall partners thought
that we provided a good service that generally met or exceeded
their needs. We believe this represents an outcome, of benefit
to HMG as a whole.
5. Of the 10 strategic priorities, three appear
not to be reflected in the new DSOs; these are SP2 (reducing harm
to the UK from international crime), SP7 (promoting sustainable
development and poverty reduction) and SP10 (ensuring the security
and good governance of the UK's overseas territories). How is
the department's work in these areas reflected in the DSOs and
why was it felt these areas were not significant enough to warrant
their own DSO?
Answer:
In order to sharpen our strategic focus and
put more resources into our new policy goals, there was a need
to reduce some of the work that was seen as lower priority for
the FCO because other government departments were better placed
to develop the UK's international strategy on these issues, to
lead Whitehall co-ordination on them, and to provide the resource
and expertise needed abroad to deliver them.
We have reduced the provision of FCO resources
at home and abroad for some areas of work that appeared in the
old Strategic Priorities. That doesn't mean we will end all work
on these issues. The new strategic framework makes explicit (for
the first time) that the job of our overseas network of posts
is to work for the Government as a whole (DSO 1). Our posts overseas
will continue to operate as a platform for the rest of Government,
on which they can put their own people and resources to deliver
their own priorities. Our Ambassadors will continue to offer advice
on how best to achieve their objectives in-country and will continue
to lobby on their behalf to achieve HMG's international objectives.
ON SPECIFIC
AREAS THAT
DON'T
FEATURE IN
THE NEW
STRATEGIC FRAMEWORK
Overseas Territories (OTs)
We remain committed to fulfilling our obligations
and partnership with the Territories. As the PUS told Overseas
Territories leaders at the Overseas Territories Consultative Council
meeting in London in December 2007, although there is no specific
mention of the Overseas Territories in the new strategic framework,
this in no way diminishes the importance we attach to the Overseas
Territories. He emphasised that there would be no change in our
approach or level of commitment to the Territories. The Overseas
Territories remain a core responsibility for the FCO and we intend
to keep the resources allocated to this important work both in
London and in post broadly constant.
Drugs and crime
The FCO carries out valuable international work
to tackle drugs and crime, eg in Afghanistan, Colombia, and the
Caribbean. We will continue to do this. But we have discussed
with our Whitehall partners how international drugs and crime
work is best co-ordinated in London, and have reduced our programme
spend on drugs and crime as we align those funds to our new priority
policy goals.
Sustainable development
Sustainable development is an important concept
and much of the work in the new policy goals will contribute to
the Government's overall sustainable goals eg on climate change
and conflict prevention. DEFRA now leads on this area of work.
PSA TARGETS
6. Please can you provide an explanation as
to why the ratings of the following targets have changed since
the time of the Autumn Performance Report:
|
| Change in rating from the Autumn Performance Report
|
|
PSA 1 WMD
D. Threat reduction schemes
| Amber to green |
PSA 2 Terrorism
A. Awareness of terrorist threat
| Amber to green |
PSA 2 Terrorism
B. Preventative action
| Amber to green |
PSA 2 Terrorism
E. Reduction in Vulnerability
| Amber to green |
PSA 2 Terrorism
F. Capacity to deal with consequences
| Amber to green |
PSA 3 Conflict prevention
A4. Iraq? |
Red to amber |
PSA 3 Conflict prevention
A8. Sierra Leone?
| Amber to green |
PSA 4 Effective EU
I. Stronger relationship with Russia
| Red to amber |
PSA 7 Islamic countries
B1 political pluralism
| Red to amber |
PSA 7 Islamic countries
B6 Removal of barriers to investment
| Red to amber |
PSA 8 Sustainable development
A Access to information?
| Amber to green |
PSA 8 Sustainable development
B Natural resource management?
| Amber to green |
PSA 8 Sustainable development
C Tackling illegal logging
| Amber to green |
PSA 8 sustainable development
D Environment charters in OTs
| Amber to green |
Answer:
PSA 1 WMD, Indicator D (Threat reduction schemes)—Amber to Green
| |
|
The change of rating from amber to green was based on the
resolution of operational issues which had previously been impeding
the implementation of our programme portfolio in full; for example
all of the projects relating to the Shchuch'ye site had been placed
under contract by the end February. Beyond this, following the
release of the Autumn Performance report, the nuclear programme
received a positive report from the NAO and at the end of the
financial year, expenditure was on budget. Prior to the release
of the Department Report, agreement was achieved, in principle,
amongst global partnership members to the geographical expansion
of the Partnership.
PSA 2 Terrorism, Indicator A (Awareness of Terrorist threat)—Amber
to Green
During the period under review we were proactive in using
multilateral institutions to inform international partners about
UK perspective of the threat. In particular, we made significant
efforts to focus attention on the long-term threat from radicalisation.
This led to a better understanding amongst our partners about
the nature of the threat, and greater willingness to look at practical
ways of working together to counter it. To this end we worked
closely with the EU's Counter Terrorism (COTER) group, the UN
Security Council and General Assembly, and within the G8's Roma
Lyon Group. We also maintained an extensive programme of CT-focused
bilateral contacts (at all levels) with key partners, including
the US, France and Canada. This resulted in a better shared understanding
of the threat (eg in the FATA region of Pakistan) and better co-ordination
of our efforts.
PSA 2 Terrorism, Indicator B (Preventative action)—Amber
to Green
We continued to make progress on this indicator during the
period of review, including: ongoing communications with OGDs/Stakeholders
on roles and responsibilities, including capability—improving
activity. Therefore, it was felt that a final rating of "green—met
(ongoing)" was justified.
PSA 2 Terrorism, Indicator E (Reduction in vulnerability)—Amber
to Green and PSA 2 Terrorism, Indicator F (Capacity to deal with
consequences)—Amber to Green
We continued to make progress on these indicators during
the period under review, through: providing timely and credible
travel advice on the terrorist threat overseas; improving our
own crisis response mechanisms and capabilities; and supporting
an extensive capacity building programme in priority countries
(eg helping to improve aviation security and crisis management
capabilities of host governments). This work is very much ongoing,
and we continue this year to intensify our efforts in these areas.
Revised indicators for the year ahead will make it easier to measure
progress on our Protect and Prepare efforts overseas.
PSA 3 Conflict Prevention, Indicator A4 (Iraq)—Red to Amber
As stated in the Departmental Report, there have been key
advances in Iraq which warranted a re-assessment of the rating
and the change to Amber. The key changes underpinning this decision
are set out below.
The security environment in Iraq has, and is, continuing
to improve. As a consequence of several factors/actions, including
the US "surge" tactic, security has improved across
the country. Increased capacity within Iraq's own security forces
and their clear capability to instil and maintain good order has
also contributed to the positive developments in security.
In March 2008, the Iraqi Security Forces began Operation
Charge of the Knights to clear Basra City of criminal elements
to improve the security situation for the people of Basra. By
bringing security to Basra, Iraq's second largest city will have
a chance to prosper and realise its enormous economic potential.
More generally, it showed that the Iraqi government was prepared
to take responsibility for security, and that its own security
forces had the capability to deliver it, and did more than almost
anything else to establish the authority of Prime Minister Maliki's
government.
Political reconciliation is key to Iraq's development as
a secure and stable country. There has been an overall improvement
in the political atmosphere reflected by the passage of important
legislation such as the Amnesty and De'Baathification Laws, which
lay the foundation for greater Sunni reintegration in Iraqi politics.
Since the passage of these laws, the Sunni political bloc Tawafuq
has also announced its return to Government. The Provincial Powers
Law moved Iraq closer to a new round of provincial elections,
so important in providing a new opportunity to those who have
now turned away from violence. Important now that the elections
law is passed soon, in order to allow these elections to take
place later this year. However, substantial challenges remain.
The successes against al-Qaida—Iraq in al-Anbar and
other provinces clearly demonstrates that ordinary Iraqis have
no interest in extremist ideologies espoused by al-Qaida and other
extremists, and the recent transfer of responsibility for security
in Anbar to Provincial Iraqi control, though after the publication
of the Departmental report, confirms this welcome trend.
PSA 3 Conflict Prevention, Indicator A8 (Sierra Leone)—Amber
to Green
The final assessment against the target indicators at the
end of review period 1 April 2007 to 31 March 2008 was green for
the following reasons:
Presidential and parliamentary elections in August and September
2007 resulted in a democratic and peaceful transition of power
from an incumbent government to an opposition party. The close
co-operation between the National Electoral Commission, Office
of National Security and Central Intelligence and Security Unit
was vital in ensuring that the elections were free and fair. The
Republic of Sierra Leone Armed Forces Military Aid to the Civil
Power (MACP) task in support of the Sierra Leone Police was evidence
of the growing maturity of the security sector.
The government remained stable for the rest of the review
period. There were no militia operating in the country. Ongoing
UK support helped improve civilian oversight of the security sector
through a National Security Council chaired by the President and
further improve the effectiveness and sustainability of the security
services. The National Electoral Commission also turned its focus
to preparations for local elections in July 2008.
At the time of the 2007 Autumn Performance Report we judged
it was too early to make a final assessment of the performance
of the new government and that an amber (on course) rating was
more appropriate.
HMG continues to provide support and assistance to further
increase the effectiveness, accountability and sustainability
of the security sector. Progress in Sierra Leone has also been
reflected in the changing UN presence in country. The UN Integrated
Office in Sierra Leone (UNIOSIL) will draw down on 30 September
and will be replaced by a smaller political office, the UN Integrated
Peacebuilding Office in Sierra Leone (UNIPSIL) on 1 October.
PSA 4 Effective EU, Indicator I (Stronger relationship with Russia)—Red
to Amber
The indicator specifically judged us on whether joint activity
had led to improved security in third countries. It was therefore
appropriate to cite the intensive co-operation with Russia over
Iran which was not necessarily guaranteed, particularly in the
run up to a UNSCR. Also, despite the failure in that period to
launch PCA successor talks, the EU extended links (by holding
eg a first ever Culture Ministerial), while maintaining a principled
approach (using that meeting to complain to Russia about its threats
against the British Council). We therefore felt, at the time the
Departmental Report was drafted, that significant progress had
been made since the Autumn Performance Report to warrant an "amber"
rating.
PSA 7 Islamic Countries, Indicator B1 (Political pluralism)—Red
to Amber PSA 7 Islamic Countries, Indicator B6 (Removal of barriers
to investment)—Red to Amber
For Indicator B1 and B6, the reason for these two indicators
turning red to amber was that at the Autumn Performance Report,
they were deemed to be borderline between red and amber and it
was felt by the end of the year, the inclusion of some new initiatives
not present at the six-month assessment was enough to tip them
into the amber category, thus justifying the final rating. These
initiatives included a project to develop and strengthen an apolitical
women councillors' network in Pakistan in B1 and "Regional
Centres for Entrepreneurship" in Morocco and Bahrain for
B6.
PSA 8 Sustainable Development, Indicator A (Access to information)—Amber
to Green
As acknowledged in the Departmental Report, Sustainable Development
is not at an end state in itself but a continuing process of behaviour
change—in that sense we will never "achieve" sustainable
development. However, in the Departmental Report we did not claim
to have "solved" problems such as Access to Information
in Environmental Matters or Illegal Logging. These issues will
take decades to resolve, if ever, and the UK cannot do it on its
own. What the indicators do show is that the FCO made progress
towards departmental objectives under those subject headings.
The FCO contribution to Environmental Democracy has been
through an organisation called the Partnership for Principle 10
(of the Rio Declaration). The FCO had been part of the Advisory
Board of PP10 since the beginning (the only "developed"
country to do so). The FCO had set itself target indicators based
around recruiting a number of other countries to join the Partnership.
We also wanted the organisation to be more representative and
to become self-sustaining. We achieved the objective of recruiting
more, diverse member countries. We also assisted with the transition
of the Secretariat from Washington-based WRI to organisations
based in Latin America. We met our internal targets and thus,
the indicator was rated as green—ongoing.
PSA 8 Sustainable Development, Indicator B (Natural resource management)—Amber
to Green
The FCO's objectives here had been based around helping DEFRA
to set up the Sustainable Development Dialogues with the Gleneagles
+5 countries. This we achieved through Posts and our small team
within the FCO. The SDDs exist and are, to a greater or lesser
extent, modestly successful and the baton has been passed fully
to DEFRA. We listed examples of specifics to show how progress
towards meeting our objectives had been made—the Travel
Foundation, for example, continues to function (thus we judged
the objectives to be green on-going).
PSA 8 Sustainable Development, Indicator C (Tackling illegal logging)—Amber
to Green
The FCO achieved what it has set out to do which was to support
DfID on the Voluntary Partnership Agreements negotiations. This
we did through our overseas network. Progress on the VPAs has
been good (if a little slow) and continues (hence green—ongoing).
We also list other deliverables such as the UK-China Sustainable
Forestry Working Group which we helped set up and support.
PSA 8 Sustainable Development, Indicator D (Environmental charters
in OTs)—Amber to Green
We moved the indicator to green—met/on going, as the
Overseas Territories Environment Programme (OTEP), an FCO and
DFID funded programme, held another successful bidding round in
February which resulted in 11 new projects being approved for
the Overseas Territories. The projects included the eradication
of rodents on Gough and Henderson Islands; support to implement
environmental legislation on Montserrat; an invasive species action
plan for Bermuda; an education project in the British Virgin Islands;
and plant conservation on Ascension Island. A clear increase in
the implementation of environmental charters had been achieved
during the SR04 period, and the OTEP will continue to support
the Overseas Territories to safeguard their environment.
7. The assessments under the sub-targets for PSA9a (entry
clearance) were based on provisional figures. Have they now been
finalised? If not, when will they be finalised? If they have been
finalised, has the assessment of any of the indicators changed
from that shown in the Departmental Report?
Answer:
The figures provided in the assessments under the sub-targets
for PSA9a remain provisional and will not be finalised until early
2009. Collecting and processing the annual statistics inevitably
takes time. The final figures will appear in the 2009 Departmental
Report.
SHARED SERVICES
8. The 2007-08 FCO Departmental Report states: "By
April 2011, the programme aims to put in place shared service
centres to cover the UK, Europe, Asia/Pacific and Americas with
an initial focus on finance and procurement processes, a number
of regional facilities management contracts and procurement optimisation
to achieve better value for money through regional and global
deals" (p.108). Where will the shared services centres be
located? How many staff numbers will be cut as a result of shared
services?
Answer to Questions 8, 9 and 11:
See after Q 11
9. In your response to our questions on the 2006-07 Departmental
Report last year, you estimated that "that by the end of
CSR07 the individual projects in the Shared Services Programme
could potentially reduce the FCO's baseline spend on corporate
services by a net total of approximately £22 million"
(letter of 13 June 2007, Response 12iv). The FCO's Value for Money
Delivery Agreement indicates that shared services will generate
efficiency savings of £16 million. Does this mean that you
have revised the figure of £22 million down to £16 million?
Please could you provide a breakdown of the £16 million,
showing what components will make it up?
Answer to Questions 8, 9 and 11:
See after Q 11
CO-LOCATION
WITH DFID
10. In your response to our questions on the 2006-07 Departmental
Report last year you stated "The 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" (letter of 13
June 2007, Response 12ii). In your response to our questions on
the Autumn Performance Report you stated that under current planning
assumptions, the following offices of Abuja, Bridgetown, Dhaka,
Harare, Jerusalem, Kampala, New Delhi, and Pretoria will become
co-located by the end of the CSR07 period and that proposals for
co-locating in Beijing are being considered (Letter of 3 April
2008—Response 15). What progress have you made in co-locating
these offices? What efficiency savings will this generate?
Answer:
Of the posts identified, we and DfID are currently co-located
in Kampala and we will both move into our new Embassy building
in Harare in early 2009. We are working with DfID on plans for
co-locating in Dhaka, New Delhi, and Jerusalem. Plans for co-locating
in Abuja, Beijing, Bridgetown and Pretoria are in hand but at
a less advanced stage.
Our plan to increase the proportion of co-located offices
with DfID is one strand of a larger programme of change involving
Whitehall partners. The savings generated by co-locating with
Whitehall partners are often dependant on the size and extent
of the facilities shared. In cases where DfID can occupy space
in an FCO building that would otherwise be underused, the primary
saving to HMG is the rent that DfID might otherwise have paid,
which may not be easily quantifiable. Other typical savings are
generated around shared facilities (eg meeting and reception facilities),
maintenance (equipment and costs), and staff (security guards).
In addition to the potential for financial savings, decisions
to co-locate are often driven by other factors such as providing
a common platform for HMG or spare capacity in our network.
11. The 2007-08 FCO Departmental Report states that the
FCO has set up a UK process centre at Hanslope Park which has
resulted in reduced staff numbers and invoices being paid more
quickly (p.82). How many staff numbers have been cut?
Answer to Questions 8, 9 and 11:
The Committee will be aware that following an OGC Gateway
0 Review of the Programme in April 2008 which gave the programme
a red rating the FCO Board asked Andrew Lloyd, the incoming Programme
Director, to look carefully at how the FCO should deliver improvement
in its corporate services.
The Board had a detailed discussion of this issue at its
September meeting. The Permanent Under-Secretary, Peter Ricketts,
will be writing shortly to the Chairman with the Board's conclusions.
INTERNATIONAL SUBSCRIPTIONS
12. In the Government's Response to the Committee's Report
on the 2006-07 Departmental Report (CM 7302), you stated "The
FCO's CSR Settlement recognised the growing burden of international
organisation subscriptions and adjusted the balance of the existing
cost-sharing agreement with the Treasury so that in future the
FCO budget will only be required to meet 40% of costs above the
£102,000,000 baseline set in SR2002. However, the Chief Secretary
to the Treasury did not agree to an increase in this baseline".
(para 5) Is the arrangement between you and the Treasury on international
subscriptions satisfactory or do you forsee having to curtail
activities due to cost pressures arising from higher international
subscription charges?
Answer:
The increased contribution from the Treasury to expenditure
on international subscriptions above the £102 million baseline
should enable the FCO to meet commitments this financial year.
However, the position for FYs 09/10 and 10/11 is less certain.
We are currently forecasting additional pressures of around £3
million in each of these FYs, and a likely increase in the UN
Regular Budget and other international subscriptions will push
this figure higher. That being the case, we will have to curtail
activities in other programmes in order to meet these non-discretionary
costs.
13. In your response to our questions on the Spring Supplementary
Estimate, you informed us that claims arising from the normal
operation the Overseas Pricing Mechanism (OPM) and the International
Subscriptions Cost Sharing Agreement (both in RFR1) were exempt
from being paid back until the time of the 2007 CSR. You stated
that the 2007 CSR "abolished the OPM and removed the recoup
exemption from the cost sharing agreement" (letter of 16
May 2008, Response 4). What has replaced the OPM? Will the FCO
now have to pay back Reserve Claims that arise from having to
comply with the International Subscriptions Cost Sharing Agreements?
Answer:
The OPM has been replaced by an internally managed mechanism.
We have signed forward currency contracts with the Bank of England
to mitigate the risks of exposure to currency fluctuations. We
monitor the impact of exchange rates on our Posts' budgets and
adjust their Sterling allocations accordingly. This is funded
from a contingency that we set aside during the Resource Allocation
Round.
EYF entitlements will be adjusted for Reserve Claims that
arise from compliance with the International Subscriptions Cost
Sharing Agreements.
CIVILIAN COSTS
OF CRISIS
MANAGEMENT IN
IRAQ AND
AFGHANISTAN
14. In the Government's response to the Committee's Report
on the FCO Annual Report 2006-07 (CM 7302), you stated that the
Stabilisation Aid Fund will be established to cover activity alongside
military activity in "hot conflict zones" but that you
"remain concerned that these proposals do not fully solve
the problem of resourcing civilian deployments alongside the military,
as there is no new money for activity which does not qualify as
overseas Development assistance" and that "there should
be access to the Reserve for the additional costs of civilian
deployments"(para 10). What arrangements are there with the
Treasury for access to the Reserve for the additional costs of
civilian deployments? How could these arrangements be improved
from the FCO perspective?
Answer:
As foreshadowed in our response to the Committee's Report
on the FCO Annual Report 2006-07, the Government announced in
the CSR White Paper the reform of the tridepartmental arrangements
for coordinating and funding conflict prevention and stabilisation
activity, including the creation of the new Stabilisation Aid
Fund (SAF), which came into operation in April 2008 to fund civil
conflict stabilisation activities in volatile or hostile areas
where the security situation does not yet permit the roll-out
of programmes such as the Pools have traditionally funded. The
SAF, which focuses currently on Iraq and Afghanistan, will make
available some £269 million over the three year CSR period.
Alongside this the Government merged the Global and Africa Conflict
Prevention Pools into the single Conflict Prevention Pool (CPP)
to reduce bureaucracy, focus effort on where it can deliver best
returns and ensure that the new single Pool remains an effective
instrument for long term conflict prevention.
The new CSR arrangements have provided a more robust framework
that has strengthened the Government's ability to deliver an integrated
response to preventing, managing and resolving conflict. Public
Service Agreement on preventing and resolving conflict (PSA 30),
for which the FCO has the lead, sets out the Government's objectives
for this area for the CSR period and with our Whitehall partners
we are working to ensure that our policy and resourcing priorities
support the delivery of the PSA.
FIVE STAR
FINANCE
15. The 2008 Departmental Report states that the FCO is
on course to achieve four stars in Finance by autumn 2008 (p.104).
Are you still on course to achieve this?
Answer:
We had an intermediate milestone of three and a half stars
to check on progress between three and four stars. We reached
three and a half stars at the end of August 2008. An important
step was to lay our 2007-08 accounts before Parliament by the
end of June, which was achieved ahead of all other main Whitehall
Departments. We have reviewed our programme of milestones for
four to five stars and identified additional requirements for
the four star definition. In particular, we have reviewed the
purchasing and payment processes and identified opportunities
to share the UK best practice across the network. This may delay
the achievement of four stars until February 2009. We are currently
completing the CIPFA FM review to validate the achievement of
3.5 stars.
EXTERNAL CONSULTANTS
16. In the Government response to the Report on the FCO
Annual Report 2006-07,you stated that "the FCO operates a
devolved system for the contracting of management consultants
and no central record is yet maintained of the exact areas in
which it is currently being assisted by outside expertise"
and "to address this issue, the FCO's Corporate Procurement
Group is in the process of creating a central database that will
contain complete and accurate information on engaged consultants"
(para 23). Has the FCO now completed this central database of
engaged consultants?
Answer:
The process of creating the central database has not been
completed yet due to resource constraints. We have now allocated
a member of staff for this task. The FCO recognises this as a
top priority task both in terms of clearly identifying its consultancy
spend and in meeting its obligations around financial reporting.
The task is also key to the FCO delivering its targets under the
OGCs Consultancy Value Programme in which the FCO is participating.
The work is now programmed to be fully completed by 31 December
2008 although the initial paper based (as opposed to IT system
based) database should be available by the middle of November
2008.
THE STRATEGIC
PROGRAMME FUND
(FORMER GLOBAL
OPPORTUNITIES FUND)
17. Are you intending to contribute more funds to the renamed
Strategic Programme Fund? How are you going to meet your aim of
making the projects within the Fund more ambitious and focused
on the FCO's new policy priorities?
Answer:
Funding for the Countering Terrorism and Radicalisation SPF
will increase from £35.3 million in 08/09 to £56.0 million
in 10/11. Funding for the Low Carbon/High Growth Global Economy
SPF will increase from £13.7 million in 08/09 to £24.7
million in 10/11.
Programme teams are encouraging posts to work up large, high
impact, multi-year projects and to ensure that project work is
fully integrated into the Country Business Planning process, to
ensure the right focus in each country. Other initiatives include
strengthening evaluation procedures to identify where follow-up
projects might consolidate the change we are looking to promote
and encouraging posts to develop their own thematic strategies.
UKTI
18. How much does the UKTI want to increase its revenue
by over the 2007 CSR period?
Answer:
UKTI's plans are to raise revenue as agreed with Treasury
over the CSR07 settlement period as follows:
19. The UKTI target related to research and development
activity in UK is to help at least 1,000 businesses increase their
R&D activity in the UK. Why is the target focussed at raising
the number of businesses that invest in R&D rather than raising
the overall level of R&D?
Answer:
The target in question, which is part of UKTI's agreed SR2007
performance management framework, is:
"Target 3: Increase the quality of R&D activity in
the UK through business internationalisation
Annually, over the 2008-09 spending review period, at least
1,000 businesses increase their R&D activity in the UK as
a result of UKTI support, including at least 70 foreign direct
investment (FDI) R&D projects."
This target was informed by the increasing body of research
evidence which identifies links between business internationalisation,
innovation and investment in R&D, as well as productivity.
Recent research strengthens the evidence underpinning the economic
rationale for UKTI objectives and targets, which was set out in
DTI Economics Paper No 18: International Trade and Investment—the
Economic Rationale for Government Support, published in 2006,
alongside the UKTI strategy "Prosperity in a Changing World".
UKTI's independently conducted business surveys also provide
evidence that UKTI's trade and investment services can help to
increase the level of R&D activity carried out in the UK by
its customers, both in terms of time and expenditure.
By helping more innovative and R&D active companies to
internationalise, and attracting R&D intensive companies to
the UK, UKTI also contributes to the Government target of increasing
UK R&D investment as a proportion of national income from
1.9% (2004 level) to 2.5% over a 10-year period by 2014.
MANAGED MIGRATION
20. What is the FCO's role in the Returns and Re-integration
Fund?
Answer:
The FCO coordinates and manages the Returns and Reintegration
Fund in partnership with UKBorders Agency, Ministry of Justice
and the Department for International Development. The Returns
Fund's main aim is to work together with overseas governments
to increase the numbers of foreign national prisoners and failed
asylum seekers who are removed from the UK to their countries
of origin. It delivers projects in countries which face challenges
in accepting back and reintegrating their nationals, drawing on
its network of posts around the world. The Returns Fund provides
rehabilitation and reintegration assistance which aims to ensure
people's return is a successful one and it also helps to speed
up the process of removal in the UK. In addition it delivers projects
in-country which help to tackle illegal immigration to the UK.
FINANCE
21. (p.121, Table 5) Why has the resource budget for FCO
programme declined by 12.0% from £167 million in 2007-08
to £147 million in 2008-09?
Answer:
The FCO spending profile on strategic and bi-lateral programmes
reflects the CSR 2007 Settlement. The FCO Programme budget reflects
the allocative efficiencies mentioned in the answer to Q27 below.
MAIN ESTIMATES
22. The Main Estimates Memorandum states that the management
of the Global Conflict Prevention programme has transferred to
DFID from 1 April 2008, except for those elements that have been
incorporated into the new Stabilisation Aid Fund, which has been
placed in the MoD baseline (para 5). Given that the FCO is the
lead Department on CSR 2007 PSA 30 (Reduce the impact of conflict
through enhanced UK and international efforts) why has management
of the Global Conflict Prevention programme transferred to DFID?
What impact has this had on FCO staff and administration? What
role does the FCO play in the Stabilisation Aid Fund?
Answer:
The Conflict Prevention Pool (CPP), established on the 1
April 2008, was formed from a merger of the Global Conflict Prevention
Pool (GCPP) and Africa Conflict Prevention Pool (ACPP). A separate
Stabilisation Aid Fund (SAF) was established to support stabilisation
and reconstruction activity in `hot' conflict zones. The SAF took
on responsibility for all Iraq and Afghanistan activity funded
by the Pools.
The CPP sits on DfID's financial baseline and SAF on MoD's,
however, they are subject to joint management and decision making
by FCO, DfID and MoD. Funding is transferred from HMT to DfID
and from DfID to the respective departments during the Winter
and Spring supplementaries. The FCO participates in all relevant
decision-making forums, including the Cabinet level Committee
responsible for determining CPP and SAF allocations and approving
programme strategies—NSID (OD).
Each CPP programme (of which there are eight) has a Senior
Responsible Owner (SRO) at Director level, six of which are in
the FCO. The SROs are accountable to NSID (OD) for the overall
management and delivery of CPP strategies. We are extending the
Regional Conflict Advisory (RCA) network in line with the CSR
settlement. All RCAs will be tri-departmental resources but will
be seconded to the FCO for the duration of that role.
The SAF currently focuses on Iraq and Afghanistan. Each country
programme has a Programme Board which comprises the Senior Responsible
Owner and their counterpart from the other two departments. The
Senior Responsible Owners for the programmes are at present the
Head of Iraq Group in the FCO and the Ambassador in Kabul. Senior
Responsible Owners are supported by Programme teams and a Programme
Office at the British Embassy Kabul which include FCO staff.
The above changes have had no significant impact on the FCO
staffing levels or administration costs.
23. The Main Estimates Memorandum notes that the Treasury
has agreed an initial amount of £200 million applied to the
Main Estimate for peace support and that the Chief Secretary to
the Treasury has not yet agreed the total amount for which parliamentary
approval should be sought for peacekeeping expenditure in 2008-09.
What will the £200 million be used for? What additional amount
is the FCO requesting from the Treasury in 2008-09?
— The £200 million will be a Reserve Claim.
The Treasury's Consolidated Budgeting Guidance indicates that
when Reserve Claims are made, any future under-spends would be
used to pay back Reserve Claims, rather than being rolled forward
as is normal practice to next year's budget through the End-Year
Flexibility (EYF) mechanism: (HM Treasury, Consolidated Budgeting
Guidance, para 15.4) Is the Treasury expecting the Department
to use any future under-spends to pay back its Reserve Claim for
peace support? If so, what impact will this have on other projects
or programmes of the Department, which could potentially under-spend,
given that they can not roll-forward under-spends in the normal
way through EYF?
Answer:
The total Peacekeeping Budget for 08/09 will be £374
million.
Of the £200 million transferred at Main Estimates, roughly
82% will be used to meet the UK's share of assessed (obligatory)
costs for UN, EU and OSCE peacekeeping operations. The balance
will be spent on the secondments of UK military, policing and
civilian personnel to a range of international peacekeeping operations.
FCO's non-Peacekeeping End Year Flexibility (EYF) has not
been reduced to pay back the Peacekeeping Reserve claim.
24. The Main Estimates Memorandum states that "final
administration cost outturn was £15.8 million higher than
provision forecast after apportionment of visa and consular overheads
to other current was taken into account". Why were visa and
consular overheads higher than expected? What measures are the
FCO taking to ensure that administration costs are maintained
within the budget?
Answer:
At the end of the 2006-07 financial year an exercise was
undertaken to remove the net administration costs of consular
and visa services from the FCO's administration budget in-line
with their reclassification by the Treasury as programme costs.
The £15.8 million revision represents a decrease in the remaining
administration costs underspend rather than an increase in consular
and visa costs.
25. The Main Estimates Memorandum gives the End Year Flexibility
carried forward into 2008-09 as £104.78 million (table in
para 14). However the Public Expenditure Outturn paper (Vm7419)
gives the FCO EYF as £171.9 million (p14). Why are the figures
different?
Answer:
The Balance of accumulated End Year Flexibility given in
the Main Estimate Memorandum was an early estimate that was revised
upwards for the Public Expenditure Outturn White Paper to take
account of near-final 2007-08 outturn figures.
EFFICIENCY TARGETS
26. In your response to our written questions on the APR
and CSR 07 Value for Money Delivery Agreement (VfMDA), you provided
us with a table of all the current FCO VfM projects. Of the 17
projects listed, only five were included in the VfMDA. Why were
so few projects included in the VfMDA?
Answer:
The CSR07 VfM DA sets out at the start of the programme,
a clear summary of the major reforms, changes and initiatives
that the FCO intend to undertake over the CSR period to deliver
vfm savings. The five projects listed are high priority for the
FCO and will deliver the bulk of the savings that will contribute
toward delivering vfm savings of at least £144 million by
end of March 2011. Whilst it was proportionate and in line with
HM Treasury guidance to focus on the more substantial initiatives,
we are additionally taking forward a range of smaller programmes
to ensure that VFM is maximised.
The FCO will report fully on all gains achieved to date in
the Autumn Performance Report later this year.
27. The response also includes a note on "allocative
efficiencies" stating that these "are efficiencies obtained
by prioritising work in order to achieve maximum impact of our
resources". In what areas of the FCO's work would these "allocative
efficiencies" feature? Could you provide us with a real-world
example of an allocative efficiency and explain how it would be
"cash releasing", as well as how these efficiencies
are "cash releasing" in general?
Answer:
The significant shifts in resources flowing from the new
FCO Strategic Framework generated allocative efficiencies in areas
such as Chevening Scholarships, Public Diplomacy, Bilateral, Drugs
and International Crime and Sustainable Development.
Allocative efficiencies in CSR07 are generated from moving
resources from lower priority areas allowing savings to be released
and invested in higher priority areas. During 2007 Resources Allocation
Round (RAR) budget were adjusted accordingly to release "cash"
from these areas to be used in priority areas as outlined in the
Strategic Framework. For example investment in the Chevening Scholarships
programme was reduced in order to release resource for policies
identified in the new Strategic Framework as high priorities,
such as Counter terrorism and promoting a low carbon, high growth,
global economy, enabling the FCO as a department to operate more
effectively at a lower cost to the taxpayer.
For example, allocative efficiencies for Chevening Scholarships
are calculated as follows:
|
| Baseline
| Counterfactual Baseline
|
| 2007-08
| 2008-09 | 2009-10
| 2010-11 |
|
| Baseline Spend | £36.1m
| £37.07m | £38.08m
| £39.10m |
| Post vfm initiative spend (RAR budget) |
| £27.91m
| £25.60m | £25.60m
|
| Efficiency Gains | | £9.16m
| £12.48m | £13.5m
|
|
28. In the VfMDA you set out how benefits will be measured
against a counterfactual baseline using the Treasury GDP deflator
on 2007-08 spend. How will benefits be measured for "allocative
efficiencies" when the efficiency will be achieved through
achieving maximum impact rather than reducing expenditure?
Answer:
The same principle will be applied to calculate allocative
efficiencies ie savings are calculated from a counterfactual baseline
using the Treasury GDP deflator (example above—Q.27).
THEFT OF
PASSPORTS AND
VISA VIGNETTES
29. Further to your letter of 1 August 2008, the Committee
would like to receive copies of the most recent reviews carried
out by the FCO into the arrangements with 3MSPSL. If these reviews
did not include a security threat assessment, the Committee would
like to know when the last such assessment was carried out, and
by whom, and to receive a copy of this assessment. In particular
the Committee would like to know whether the FCO was advised at
any time previously that armoured vans should be used for this
transport operation.
Answer:
The Permanent Under-secretary, Peter Ricketts, is writing
separately to the Committee about this issue.
30 November 2008
| 
