Global Security: Non-Proliferation - Foreign Affairs Committee Contents

Submission from the Parliamentary Unit, Department of Energy and Climate Change



  The UK is the fourth largest contributor to the IAEA regular budget, a sum of €15.2 million and US$3.75 million for FY 2009 (6.64%). Relative contributions of each member are derived from the UN's Regular Budget scale, as adopted by the General Assembly. The UK is also one of the largest contributors to IAEA voluntary funds—notably the Technical Cooperation Fund (US$5.1 million in 2008) and the Nuclear Security Fund (£2 million so far since 2007).

  The implications of the current weakness in Sterling in relation to these commitments.

  Clearly the extent of the fall in the value of Sterling—over 30% since the budget was set—presents difficulties, as the UK has a legal commitment for regular budget contributions. Any unavoidable and significant overspend can undermine priority setting and the financial planning process, and can affect the UK's potential to pay voluntary contributions, both now and in following years. There is, however, some limited scope to mitigate currency rate effects through changes in the timing of payments. As a matter of priority the Department is exploring, with others, ways to handle similar problems in future. But any specific financial measure, including hedging, would need to be balanced against the cost and other implications.

  The Government's position in relation to the suggestion that the IAEA's budget should be increased dramatically, as set out in the Report by the independent Commission appointed by the IAEA Director-General entitled "Reinforcing the Global Nuclear Order for Peace and Prosperity, the Role of the IAEA to 2020 and beyond", published in May 2008.

  As a committed Board member, the UK seeks to ensure that the Agency has the necessary resources to do its job effectively. The Department is currently looking closely at future Agency funding, in preparation for Budget Committee discussions commencing in mid February. Several issues need to be considered. While the grounds for more resources—for example to support a greater number of IAEA inspections of nuclear facilities in future—are clear, the "2020 Report" itself acknowledged that the IAEA should prioritise those areas where it can make the most difference and explore efficiency gains using up to date management and communications. Timing is also key, to ensure that funding is available when it is needed, and that rebates are minimised, since they represent an opportunity cost. Not least the UK makes a major contribution-in-kind to the Agency's work through the engagement of UK experts and provides a support programme on safeguards, including the training of inspectors—activities that will continue to be strengthened and developed to support future IAEA work.

27 February 2009

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