Examination of Witnesses (Questions 160
- 179)
WEDNESDAY 29 OCTOBER 2008
SIR PETER
RICKETTS KCMG, JAMES
BEVAN AND
KEITH LUCK
Q160 Mr. Horam: Is that a lot?
Sir Peter Ricketts: It is much
improved, because in the previous spending round period, we had
two completely different sets of things; we had our strategic
priorities—the 10 that the Chairman referred to—and
a set of PSAs, which were different. We were therefore obliged
to report to the Committee and the public on two separate sets
of priorities, which was completely confused, and confusing for
staff. The benefit this time is that we have one set of departmental
strategic objectives—the eight—one of which is conflict.
It matches the public service agreement for which we have responsibility—the
PSA on conflict. Therefore, the two align, and my staff working
on conflict know that they are working for a departmental strategic
objective that is also part of a cross-Government public service
agreement. That is a real gain. We are not doing two sets of work
and we are not reporting against two sets of targets and priorities—just
one set.
I chaired the delivery board for the PSA
on conflict. The benefit is that it brings in the Department for
International Development and the Ministry of Defence, as well
as ourselves. The Departments meet regularly, and having the three
working together is working well. Having a single common set of
priorities, not two competing or conflicting ones, has been a
real gain. I think that the organisation now sees the value of
the departmental strategic objectives, and we are improving our
business planning to support them.
Q161 Mr. Horam: I am just concerned,
as Mr. Purchase is, about the number of senior staff and the amount
of time consumed by all these management-type structures. How
far does all this structure really help the Foreign Office to
make the right calls on big foreign policy issues?
Sir Peter Ricketts: The departmental
strategic objectives are not really bureaucratic structure, they
are policy priorities for the organisation. I think that it helps
staff across the FCO to know that these are the top policy priorities
that Ministers have set for the Department to focus on. Rather
than staff feeling that they could do anything in the international
area any day of the week, they have targeting. The priorities
do not consume a lot of senior time in terms of management, they
are really a guide to the organisation on how to prioritise its
effort. On the public service agreement, we have tried to keep
the process side of it as limited and light as we can. We have
gained, because it is driving joint working between the three
Departments. If we can use it to do joint things with the three
Departments, it will be worth it.
Q162 Mr. Horam: But, again, is
the PSA-type structure the right one for a rather unique Department
such as the Foreign and Commonwealth Office? For example, in the
2007 National Audit Office report, many of your PSAs were criticised
as being not fit for purpose. In the case of the then PSA, "Engaging
with the Islamic World", the NAO found that it was "virtually
impossible to capture and assess reliable and accurate data".
The problem is that you are trying to fit a unique set of departmental
objectives, which frankly do not seem right for purpose, into
this broad Government structure.
Sir Peter Ricketts: I absolutely
understand your point; it is really difficult to measure performance
against policy objectives. That is absolutely right, and it does
not apply just to the FCO, as there are other Departments that
struggle to measure their impact on their policy objectives. I
do not think that that exempts us from the discipline of trying
to show that we are using taxpayers' money for clear outcomes
and benefits.
Q163 Mr. Horam: But there is a
cost with all this, in terms of management and senior staff time,
and in terms of trying to make things that it is difficult to
make work in your Department, work.
Sir Peter Ricketts: I would not
exaggerate the amount of time; we try to keep the processes as
light as we can. It is a good discipline, even when you have policy
objectives such as reducing conflict or preventing terrorism,
to find ways of measuring objectives. If you cannot measure them
it is very difficult to claim that you need more resources for
doing x, y or z. The discipline of finding indicators to show
that you are having some effect in the world, in exchange for
the public money that you are spending, is not a bad one.
Q164 Mr. Horam: Would it not be
much better if the Treasury handed you the money and relied on
your experience and judgment over many years?
Sir Peter Ricketts: How could
I object to that?
Mr. Purchase: At the very least, you
could tell the Government that.
Q165 Mr. Heathcoat-Amory: My question
is about your departmental strategic objective to "promote
a low carbon, high growth global economy". That is obviously
highly desirable, but there is a possible conflict. At the minute
there is no growth, and the struggle in the world is to create
growth of any sort. If you accelerate—as one of your objectives
has it—the shift towards low carbon, you are adding costs.
It is an expensive undertaking. You have to have power stations
that have carbon capture and so on, so you are putting up costs,
energy prices and everything else. That is not a terribly obvious
way of creating high growth. How do you handle those trade-offs?
You said that you have a scientist in your Department, but do
you have an economist as well, who can advise you on what comes
first?
Sir Peter Ricketts: We certainly
have economists as well. We reflect the Government policy that
the urgent requirements to stimulate growth should not be at the
expense of our very important climate change objectives. We need
to reconcile within the Government policy, and therefore with
what the FCO does internationally, the two driving forces of climate
change, and therefore lower carbon, and doing everything we can
to promote the British economy in these difficult times. Those
are twin policy priorities and both are important. For example,
there are things that you can do to stimulate growth globally,
which will help low-carbon developments, and there are things
that could pull against that, in the opposite direction. The policy
objective tries to capture the fact that we are trying to do both
those things. It was written before the full force of the economic
downturn hit us, but it is still relevant. The FCO has to be relevant
to the Government's efforts to do everything possible to help
the British economy through these difficult times, but we must
not lose sight of our climate change objectives.
Q166 Mr. Heathcoat-Amory: My point
is that you have an outcome, on which you will be judged, of accelerating
the shift in investment toward low carbon. That takes a lot of
money—Government money—and in a recession, particularly
a global one, it tends to hit growth. I think that you have a
built-in contradiction and someone has to resolve that. I find
it puzzling that you have an outcome that you can tick, but which
may be at the expense of your overall aim of high growth. Is the
Foreign Office the best place to do that? It seems odd, given
that we now have a Department with "Climate Change"
in its title, that you somehow have those aims as well. Instead
of simplifying Government policy, it creates a muddle, both between
Departments and about aims within your Department.
Sir Peter Ricketts: Our role in
the area of low carbon or climate change is, essentially, to be
the international arm of the Government—to be out and about
in the world convincing and persuading other Governments, Parliaments
and press of HMG-wide policy. We are not setting HMG policy on
climate change—as you rightly say, that is now with the
Department of Energy and Climate Change—but we have a high
priority, which the Foreign Secretary is keen to see us implement,
to go out and sell that policy, and to campaign on its behalf.
I absolutely understand that, as a result
of the developments of the past two months, the Government as
a whole have got to recognise the twin priorities of promoting
growth and keeping a focus on low carbon and climate change for
the longer term. We have got to represent that, and deliver that
message internationally. We cannot reconcile that within the FCO's
own priority, but the way that this was drafted captures, in an
interesting way, the need to reconcile those two priorities within
Government-wide policy.
Q167 Mr. Heathcoat-Amory: Good
luck, but I do not find that this simplifies policy at all, because
a switch to low carbon can make poor people even poorer. That
is pretty obvious—if you do not allow them to generate electricity
in the cheapest way possible, I do not think that you would meet
your other aim, which is to reduce poverty in poorer countries.
I find that an unresolved conflict, which you have taken on and
made more prominent here. I think that the policy making has to
be somewhere else, then you, as you said, should try and sell
it. However, I find that it is a muddle here. I am not clear which
the lead Department is. Is it the new Department of Energy and
Climate Change? Will that Department drive the policy and try
to work out what comes first?
Sir Peter Ricketts: In Whitehall,
we have the Department of Energy and Climate Change, the Treasury,
which is deeply involved in trying to promote growth in the economy,
the Department for Business, Enterprise and Regulatory Reform—Lord
Mandelson's Department—and ourselves. We are not just an
implementing arm; we can also come forward with ideas and assistance
in policy making. Resolving these tensions, between our climate
change policy, our policy to stimulate growth in the British economy
and our development obligations in the world, is extremely complex,
I absolutely agree. However, having resolved those tensions, it
is then up to the FCO to go out and sell them internationally.
Therefore, in terms of directing our people and prioritising their
time towards this set of issues—which are very important
to the Government—is still a very relevant policy priority
for us.
Q168 Chairman: May I just clarify
whether you have carried out a mid-year review of your departmental
strategic objectives?
Sir Peter Ricketts: We have.
Q169 Chairman: And of your country
business plans?
Sir Peter Ricketts: The board
has spent a long day holding to account each of our director-level
owners of the various departmental strategic objectives. Each
of the eight directors who are accountable for working on these
different strategic objectives appeared before the board, on the
basis of some preparatory work, and we scrutinised what they were
doing, to see whether we were comfortable with the progress that
they were making, where the obstacles were and what we could do
to help them. They received some returns from embassies, to show
what the individual embassies were doing under their country business
plans. The business planning process culminated in a day-long
accountability session in front of the board, which was extremely
useful.
Q170 Chairman: Are you able to
share that information with our Committee?
Sir Peter Ricketts: What information,
Mr. Chairman?
Chairman: The outcome of the plans of
the mid-year review.
Sir Peter Ricketts: I can certainly
write to you, to tell you the issues that we covered.[2]
Q171 Chairman: And the conclusions
you came to?
Sir Peter Ricketts: And the conclusions
we came to.
Chairman: That would be helpful, thank
you.
Q172 Sandra Osborne: As part of
your strategic review, you came to the conclusion that your staffing
distribution worldwide did not reflect adequately the new priorities
of the FCO. You decided to increase policy staff in Asia, the
Middle East, Russia and parts of Africa, but to reduce staff in
certain European bilateral posts. How is the transfer of staff
to your priority areas progressing?
Sir Peter Ricketts: Perhaps I
could ask Mr. Bevan, who has been leading on that, to respond.
James Bevan: Thank you. You describe
it exactly right. The big story is the decision to reduce the
number of diplomatic staff we had, primarily in Europe, and move
them to rising new economies such as China and India and to "arc
of crisis" countries such as Pakistan and Afghanistan. We
took that decision in the context of discussion with the Foreign
Secretary of new strategic objectives, and it is designed to help
us deliver it better. As for the question of how we are doing,
we said we would achieve all this by March next year. The latest
figures show that we have almost done the entire shift that we
wanted to achieve, so that we have either already moved the people,
or we have moved the job and are about to fill it. So we are on
course to complete it. It does not mean a hollowing-out of our
network. We remain committed to global reach and in the context
of this exercise we are not closing any of our embassies.
Q173 Sandra Osborne: You have previously
said that to the Committee, but you have a planned reduction of
400 FCO staff over the next five years. How is that consistent
with the aim of continuing to maintain your global network?
James Bevan: The overall figure
you quote of 400 over the next five years is right. It is taken
from a strategic work force plan that looked at our needs over
the next five years. On the basis of our business needs and the
pressure that all Departments are under to reduce overall staffing
levels, we think we will need about 400 fewer staff in five years'
time. We expect to get there through natural wastage. We do not
think at the moment that we need to make people redundant. I do
not think it presents a contradiction with what we are trying
to do, but it does present a challenge. The way to square the
circle is to ensure that we get more out of less: less money and
fewer people. That requires us to look continually for new ways
in which we can operate more effectively as the overall numbers
in the department reduce slightly.
Q174 Sandra Osborne: May I ask you
about the service level agreements that you have negotiated with
other Government Departments? I understand that there are outstanding
issues with the Met police in relation to that. Could you tell
me what the problem is?
Sir Peter Ricketts: Perhaps I
could ask Mr. Luck to respond, as he has been leading on the service
level agreements.
Keith Luck: I have indeed. We
last met the Metropolitan police on 8 October. Unlike other Government
Departments, the Metropolitan police is a stand-alone, separate
legal entity and has treated the service level agreements as a
contractual arrangement. There are just four items which still
sit with its legal department to obtain advice on. At the meeting
on 8 October we received very positive feedback that it is working
through those four issues and should be in a position to sign
and resolve the service level agreement with us imminently.
Sir Peter Ricketts: May I add
one point? This drive to have service level agreements with each
Government Department is very important for the FCO in our aspiration
to be the platform that other Government Departments use when
they are working abroad. When they send their staff to work on
their priorities around the world we want them to be based on
our embassy platforms. For that reason, we need to have a charging
structure that is as transparent, predictable and good-value as
possible throughout Government Departments. We do not want a situation
to develop whereby different Departments open their own offices
not linked to the embassy around town in different capital cities.
The service level agreements are important, because they provide
a basis for other Departments to use our embassies as their platform.
We have now completed them with all Government Departments who
work with us, which is important. We hope to sort out the Met
police very shortly, then we will have got our relationship with
other Departments on to a much better, more systematic basis than
we have ever had.
Q175 Sandra Osborne: Could you clarify
the situation with DFID? There has been ongoing progress with
sharing accommodation and so on with DFID. I understand it is
concerned about additional costs that may come to it through the
service level agreements. What would these additional costs be
and what progress has been made in resolving that issue?
Sir Peter Ricketts: We have resolved
it, and have indeed signed the service level agreement with the
Department for International Development. Minouche Shafik, the
Permanent Secretary, and I are very committed to DFID and the
FCO working more closely than we have at times in the past. We
have more joint working now with DFID moving its offices to our
embassy compounds in more places, and we have now agreed the service
level agreement so that it is clear to both sides—and accepted—what
costs are charged, and I think that that is good.
Q176 Chairman: On that point,
we do not have a resident ambassador or high commissioner in more
than a quarter of the countries in the United Nations, yet there
will be a DFID presence in some of those countries. Is consideration
being given to the use of DFID facilities for FCO functions?
Sir Peter Ricketts: I am trying
to think of countries where that is the case. There are probably
very few.
Andrew Mackinlay: Kyrgyzstan.
Q177 Chairman: My colleague said
Kyrgyzstan. Perhaps there are some in southern Africa.
Sir Peter Ricketts: Yes. We will
always have an ambassador accredited to the country—
Chairman: But based in Pretoria, not
in Swaziland—
Sir Peter Ricketts: But where
there is a DFID office and therefore an HMG person on the ground,
of course, we should be prepared to use them. DFID does not have
the training or the facilities, for example, to do consular work
or respond to consular emergencies, so we would usually have to
mount that from the embassy that is accredited and covers that
country. Where we have an HMG representative on the ground and
there are things that they can do on behalf of all Government
Departments, I am sure that they would do that.
Q178 Chairman: I know that you
sent a written answer to Sir John Stanley recently about the number
of countries where we do not have diplomatic ambassadors or high
commissioners resident, but perhaps you can send us a note on
where you are aware of a DFID presence and the level of co-operation
that exists.
Sir Peter Ricketts: Of course.
Generally, the level of co-operation with DFID is now very good,
so I do not anticipate difficulties on that point. I shall, of
course, let you have a note.[3]
Q179 Ms Stuart: Is there not a
problem with DFID and the Foreign Office working together? It
is the tail wagging the dog in terms of money because, roughly
speaking, DFID's budget is £4.9 billion and the Foreign Office's
budget is £1.9 billion. DFID spends almost three times as
much as the Foreign Office, yet DFID has a strict, tight statutory
duty to perform in that it cannot spend any money unless it also
relieves poverty. That is a rather bizarre situation given that,
in some countries, the Foreign Office would like to do something
to support refugees, but it does not have the money, and DFID
will not do it because that would not relieve poverty. Do you
foresee policy problems in that co-location and sort of relationship?
Sir Peter Ricketts: It is improving
all the time between the FCO and DFID. I see the relationship
as complementary. Yes, DFID has more money than we have. It makes
extremely large programme spending in a number of countries to
relieve poverty, as you said, but it does not do a lot of what
we do. It does not do capacity building governance work as we
do; it does not do conflict work; it does not do counter-terrorism;
it does not do a range of conflict prevention work and it does
not do consular work. We are doing different things, but we do
them much better if we do them out of the same building or out
of the same embassy and in a complementary way. When we have DFID
staff and FCO staff with economic skills in a country, we have
an economic team in the embassy that can work on different aspects
of policy. There is lots of scope for complementary working, and
DFID is now very open to that.
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