House of Commons - Foreign and Commonwealth Office Annual Report 2008-09

Foreign and Commonwealth Office Annual Report 2008-09 - Foreign Affairs Committee Contents

6 Objectives, performance and role

Post-2007 framework and performance

288. Since the start of the 2008-09 financial year the FCO has been operating under a new Strategic Framework. The Framework comprises three elements, which generate eight Departmental Strategic Objectives (DSOs) agreed with the Treasury for the CSR 07 period. The Framework is:

a flexible global network serving the whole of the British Government (DSO 1);
three essential services, namely: supporting the British economy (DSO 2), supporting British nationals abroad (DSO 3) and supporting managed migration for Britain (DSO 4), and
four policy goals, namely: countering terrorism and weapons proliferation and their causes (DSO 5), preventing and resolving conflict (DSO 6), promoting a low-carbon, high-growth global economy (DSO 7) and developing effective international institutions, above all the UN and EU (DSO 8).

In addition to its eight DSOs, the FCO is the lead Department for one of the cross-government Public Service Agreements (PSAs), namely PSA 30 on "Global Conflict", for which the target is to "reduce the impact of conflict through enhanced UK and international efforts". The FCO is a "delivery partner" for four further PSAs, on migration, terrorism, climate change and poverty reduction.[529] In its publications and correspondence with us, the FCO has provided detailed accounts of the extensive management, assessment and reporting arrangements which are associated with its PSA and DSO targets.[530]

289. We discussed the FCO's new Strategic Framework in detail in our Report on the Department's 2007-08 Annual Report.[531] We welcomed the Department's decision to reduce the number of its priorities, in line with a previous recommendation of ours,[532] and that the fact that there was greater alignment between the Department's DSOs and PSAs under CSR 07 than there had been in the previous spending round period.[533] In January 2009, Sir Peter Ricketts told us that he thought that the new framework was "bedding in well".[534] In the 2009 FCO Staff Survey, 80% of respondents said that they had a clear understanding of the objectives of the FCO/their Post.

290. We conclude that, two years after it came into operation, the FCO's new Strategic Framework appears to have become well established internally and across Whitehall as a means of giving greater focus and clarity to the Department's activities.

291. The FCO assesses its own performance against PSA and DSO targets in its Annual Report and Autumn Performance Report (APR) each year. Each target has a set of indicators, agreed with the Treasury. According to Treasury guidance, the Department is supposed to assess itself as showing "strong progress" when over half the relevant indicators improve, and "some progress" when fewer than half do so. We have previously recommended that the FCO should include a summary assessment of progress on each indicator when reporting its performance, to make it easier to track changes in its overall performance assessments over time.[535] We are pleased that the FCO introduced this in its 2009 Autumn Performance Report. Table 1 on the next page summarises the FCO's self-assessments against its PSA and DSO targets, as reported in its 2008 APR, 2008-09 Annual Report and 2009 APR.

292. When appropriate, we take account of the FCO's framework of priorities and objectives in our other Reports and inquiries. We shall not repeat here our past comments on the Department's performance in relation to specific issues and regions.[536] Having discussed the FCO's first DSO, relating to the global network of Posts, in paragraphs 59-97, we restrict ourselves to some comments on general developments regarding the Department's three "service" objectives.

293. Looking at the FCO's performance overall, as summarised in the table, what is striking is that the Department consistently scores better on its "global network" and "service" objectives than on its policy goals.

294. We have consistently questioned whether it is appropriate for the FCO to have a set of performance targets assessed in terms of detailed and sometimes quantified indicators.[537] Our concerns have been threefold: the difficulty of measuring performance in the foreign policy field; the fact that the FCO can at most be only partly responsible for many of the relevant outcomes, given that by definition other states are involved; and the staff and management time taken up in fulfilling the relevant assessment and reporting requirements.

Table 1: FCO performance against CSR 07 PSA and DSO targets, 2008-09

2008 APR 2008-09 Annual Report 2009 APR

Targets

PSAs PSA 30: Global conflict Some (1/4) Some (2/4) Some (2/4)

DSOs

Global network DSO 1: Maintain global network Strong (4/5) Strong (4/5) Strong (5/5)

Services DSO 2: Support British economy Strong (5/5) Strong (3/5) Strong (3/5)

DSO 3: Support British nationals abroad Strong (4/4) Strong (4/4) Strong (4/4)

DSO 4: Support managed migration Strong (5/5) Strong (5/5) Some (5/5)

Policy DSO 5: Counter terrorism and weapons proliferation Terrorism: Strong (5/5)
Proliferation: Some (2/3) Terrorism: Strong (5/5)
Proliferation: Some (2/3) Terrorism: Some (5/5)
Proliferation: Some (2/3)

DSO 6: Prevent and resolve conflict Some (2/5) Some (4/5) Some (4/5)

DSO 7: Promote low-carbon, high-growth global economy Some (2/5) Some (5/5) Some (5/5)

DSO 8: Promote effective international institutions Some (2/4) Some (2/4) Some (4/4)

The table reports the FCO's self-assessments of "strong" or "some" progress towards the targets concerned, with the number of indicators for each target (in brackets) on which there has been improvement.

Source: FCO, Autumn Performance Report, December 2008; FCO, Departmental Report and Resource Accounts 1 April 2008-31 March 2009, Volume 2, HC 460-II; FCO, Autumn Performance Report, December 2009

295. As regards the difficulty of measuring foreign policy performance, on the basis of a review conducted in 2008-09 the National Audit Office (NAO) found that the data being used to assess performance on PSA 30 were "fit for purpose" in the case of only one indicator, whereas for the other three the data were "broadly appropriate but in need of strengthening". (Even so, the FCO was one of the better-performing of the eight Departments reviewed.)[538] One of the major difficulties, affecting even the "fit for purpose" data, was the timelag between the end of the reporting period and the availability of the independent external data that the FCO uses to assess its performance on conflict reduction.[539] The FCO has implemented the main NAO recommendations regarding its PSA data, including the introduction of an external "challenge panel" for the Department's own assessments of progress on one of the indicators.[540] Nevertheless, in the context of our previous concerns, we were not heartened to hear from Sir Peter Ricketts that the FCO planned to look at ways to make its internal end-year reviews of its PSA and DSO performance "even more focussed on metrics".[541]

296. As regards the difficulty of attributing international outcomes to FCO action, the Department has acknowledged this, and has pointed out that the PSA Delivery Agreement with the Treasury does likewise.[542] However, the FCO has indicated consistently that it accepts a need to measure its performance and to be accountable for the public resources it uses.[543]

297. In its 2008-09 Annual Report and again in its 2009 APR, the FCO deviated from the Treasury guidance as regards the relationship between the number of indicators showing improvement and the overall self-assessment for the relevant target. According to the Treasury guidance, in the 2008-09 Annual Report the FCO should have assessed its progress as "strong" on weapons proliferation, conflict prevention and resolution and the promotion of a low-carbon, high-growth global economy, because it reported improvement on more than half of the relevant indicators in each case. However, in each case the Department said that it did not feel that the overall "strong" performance assessment for the relevant policy target was warranted.[544] The FCO made the same judgement in its 2009 APR with respect to migration, counter-terrorism, weapons proliferation, conflict prevention and resolution, the promotion of a low-carbon, high-growth global economy and the development of effective international institutions.[545]

298. We note that, contrary to what would have been warranted by the Treasury guidance on the use of performance indicators, the FCO felt unable to give itself a "strong" performance rating on several key policy objectives in 2009, including weapons proliferation, conflict prevention and the promotion of a low-carbon, high-growth global economy. We reiterate our conclusion that the Government's current system for performance measurement is inappropriate for the FCO. We further conclude that, at least as regards policy objectives, the current elaborate performance reporting system absorbs large amounts of FCO staff time that might be better spent on other matters, without necessarily generating significant new information.

UK Trade and Investment (UKTI)

299. UK Trade and Investment (UKTI) is owned jointly by the FCO and the Department for Business, Innovation and Skills, and is the main vehicle through which the FCO seeks to deliver its DSO 2, to support the British economy. It has 2,400 staff, of whom 1,300 are overseas, in 98 countries, based primarily in FCO Posts.[546] UKTI is operating under a five-year strategy, Prosperity in a Changing World, launched in July 2006.

300. Sir Andrew Cahn, UKTI's Chief Executive, wrote in the organisation's 2008-09 Annual Report that its results for the year were the best it had ever achieved. UKTI stated that it helped companies achieve an estimated £3.6 billion in extra profit, a rise of 12.5% on 2007-08, and that the number of companies it had assisted had risen by 30% to 20,700. It increased its income from chargeable services to over £4.5 million, up by 26%, and was involved in 600 inward investment projects. Among examples of recent initiatives cited by UKTI and the FCO are the launch of programmes aimed at assisting delivery of the economic benefits of the London 2012 Olympics; and the creation of the Business Ambassadors network, comprising 17 unpaid business and academic figures appointed by the Prime Minister to promote UK trade and investment opportunities, especially for small businesses.[547]

301. In April 2009, the National Audit Office (NAO) published a report on UKTI which was a mixed assessment. The NAO said that UKTI was making good progress against its targets, had focused resources on the areas it believed offered the greatest opportunities, and had made significant efforts to establish feedback and measurement systems. However, the report also concluded that UKTI needed improved information on the costs of its services, greater clarity on its charging policy, clearer communication about its role and services, and improved measurement of its proven impact. The NAO pointed out that there were significant caveats to UKTI's "headline" figure, namely that the £3.6 billion in extra profit which it helps to generate is equivalent to £16 for every £1 spent on trade support.[548]

302. UKTI has reoriented its activities somewhat to take account of the recession. For example, it has introduced a new programme to try to help UK companies capitalise on other states' fiscal stimulus packages, launched new support for manufacturing firms seeking to access new overseas opportunities, and redeployed resources towards areas with higher rates of proven potential.[549] However, the FCO's Autumn Performance Report stated that "given the challenging global economic climate it will need a concerted effort from the whole network to achieve all of [UKTI's] targets".[550]

303. We recommend that in its response to this Report the FCO should provide updated information on UKTI's responses to the global recession and the April 2009 National Audit Office report on the organisation, including information on the results which UKTI is achieving for UK businesses. We further recommend that the FCO should provide information on any plans to improve the measurement of UKTI's impact.

304. The 2008-09 year was the first in which UKTI was responsible for defence exports promotion. From the start of the financial year, the former Defence Export Services Organisation—which had been under the MOD—was replaced by the Defence and Security Organisation, under UKTI. The FCO told us last year that the change would give the defence industry "access to the full network of UKTI services".[551] For 2008-09, UKTI continued to measure the impact of the Defence and Security Organisation in terms of the UK's share of the global defence export market. The FCO told us that the UK took 20% of the market, worth over £4 billion, making it the second-largest defence exporter after the US.[552] For 2009-10 onwards, UKTI plans in addition to measure the impact of services provided by the Defence and Security Organisation through its Performance Impact and Monitoring Survey (PIMS), the same instrument that it uses to try to measure its own trade support impact. The FCO told us that the first results for the Defence and Security Organisation from PIMS would be available at the end of 2009, with quarterly updates available thereafter.[553]

305. We recommend that in its response to this Report, the FCO should provide the initial information available from UKTI's Performance Impact and Monitoring Survey (PIMS) as to the effectiveness of the Defence and Security Organisation in assisting UK defence exports, compared to that of its predecessor, the Defence Export Services Organisation; and should assess the strength of the data which is provided through PIMS. We further recommend that the FCO should assess whether the handover of responsibility for UK defence exports promotion to UKTI, a body for which the FCO has joint responsibility, has given rise to any potential conflicts of interest or negative consequences for the Department's policy work.

Consular services

306. "Supporting British nationals abroad" is the third of the FCO's Departmental Strategic Objectives for 2008-11. The FCO's Consular Services are currently operating under a three-year strategy which comes to an end in 2010. In the "Stakeholder Survey" of public attitudes which the FCO commissioned in 2008, "assisting Britons abroad" was by far the most-frequently mentioned item when respondents were asked to name the FCO's responsibilities; and, as we noted in paragraph 279, among those with favourable views of the FCO such assistance was the most-frequently mentioned factor underlying their opinion.

307. According to the Consular Services Annual Report for 2008-09, during that year the Services dealt with nearly 2.1 million consular assistance inquiries and provided assistance abroad in nearly 35,000 cases, including over 3,100 hospitalisations, over 5,500 deaths and nearly 7,000 detentions. Consular Services issued over 372,000 passports overseas, including nearly 11,000 emergency or temporary ones, and deployed Rapid Deployment Teams to eleven crisis situations, including the earthquake in China, the conflict between Russia and Georgia and the terrorist attacks in Mumbai.[554] Consular work accounts for some of the FCO's most high-profile activities, such as the "Know Before You Go" travel campaign, and the work of the Forced Marriage Unit, which the Department runs jointly with the Home Office and which we heard about during our visit to Pakistan in 2009. The football World Cup in South Africa will be the most prominent one-off challenge for Consular Services in 2010.

308. In January 2010, during the Spanish Presidency of the EU Council, we visited Madrid and Lisbon, which form part of the group of Iberian FCO Posts which are operating as a network on consular issues. During our visit, we heard that the Iberia consular region accounts for around 30% of the FCO's global consular assistance cases.[555] Spain has the heaviest consular workload anywhere in the FCO network, with nearly 2,300 arrests and detentions, 1,800 deaths and 7,500 lost, stolen and recovered passports there in 2008-09. Our visit to Madrid brought home to us the particular challenges being faced by the FCO's consular operations in Spain as a consequence of the country's large (up to 1 million) and overwhelmingly elderly resident British population—among whom, we were told by Consular Regional Director Iberia Michael John Holloway, "there is an increasing expectation [...] that the British Government will help" when they face financial difficulties or problems in accessing social services and healthcare.[556] Mr Holloway told us that the FCO was working with the Department of Work and Pensions and Department of Health to provide "joined-up" services to the British community in Spain, and we heard how Age Concern and the Royal British Legion have staff integrated into relevant British Consulates. We also heard during our visit of plans for a regional consular Contact Centre, to which consular telephone and email contacts would be channelled from throughout Iberia. It is hoped that the Centre will take on back office functions and that the arrangement will enable "better sifting of calls, escalations, signposting to partners, and improving customer insights through trend analysis", as well as allowing Consulates to focus on frontline casework and outreach programmes. Mr Holloway told us that in a number of respects the Contact Centre and the Iberia region generally were acting as pilots for the future of FCO consular services.[557]

309. Among other innovations in the FCO's consular work in 2008-09, the year saw the deployment completed of a new online registration database for Britons abroad, LOCATE, aimed at improving the information available to the FCO on Britons abroad, with a particular view to its utility in possible consular crises.[558] April 2009 saw the launch of a unified global out-of-hours telephone service for those contacting overseas Posts for consular assistance. Rather than being put through to a local duty officer, who might not have had consular training, out-of-hours callers are now advised by a voicemail message to speak to the global response centre in London, which they can reach via a local number. Over 100 Posts were included when the service was launched, and others are being added over time.[559]

310. It has long been planned that the FCO's overseas passport-processing operation would be merged into the Home Office's Identity and Passport Service (IPS). Implementation of the change began in April 2009, with the signing of a Memorandum of Understanding between the two Departments.[560] It is planned that the printing of passport books will be repatriated to the UK in October 2010, and that the merger will be fully implemented by April 2011. Under the new arrangements, the IPS will have responsibility for the issuing of all UK passports, with the FCO acting as a service provider and delivery platform for the IPS for passports being issued overseas. The FCO will retain responsibility for the issuing of emergency travel documents.[561] The FCO is reforming its own passport-related operations—including via the introduction of a new IT system—to make them compatible with IPS systems.[562] The shift to IPS responsibility for passports will coincide with the introduction of finger scans and—for some first-time applicants—interviews as part of the passport application process.

311. The FCO told us that, as part of the merger process with IPS, it had begun to "streamline the consular passport network".[563] It is introducing a "hub-and-spoke" model, whereby passport applications received at several Posts are transferred to a single "hub" Post for processing, and then returned. "Hubbing" has been implemented or is planned in parts of Africa, Australasia, Central and South America, Asia, Europe, the Middle East/Gulf and the US;[564] in 2008-2010 we have visited, and received briefing on consular operations in, several of the Posts that are now operating as hubs (Paris, Madrid and Washington). We have also visited several smaller posts, including Lisbon, Valetta and Nicosia, which may be affected adversely by the "hubbing" process.

312. The FCO told us that it anticipates "substantial long-term savings as a result of rationalisation, as well as improved customer service and greater consistency across the network".[565] However, we have consistently expressed concern about the potential risks which may arise from the changes to the level of service received by British passport applicants—and, inasmuch as FCO Posts will continue to be dealing with applicants at the frontline, also to the FCO's reputation. In doing so, we have largely been reflecting concerns also being raised by FCO management.[566]

313. We recognise the importance of the FCO's consular work to the Department's public profile and the challenges that are arising from changing patterns of British travel and residence abroad. We therefore commend the improvements that the FCO is making to its consular services. We conclude that the FCO is handing responsibility for overseas passport issuance to the Home Office's Identity and Passport Service at a time when it may become slower and more difficult to receive a British passport—owing to the introduction of stricter requirements for first applicants and the rationalisation of passport processing in fewer centres—and that the process therefore raises some reputational risks for the Department which will require careful management with the Home Office and the provision of clear explanation to the public. We urge our successor Committee in the new Parliament to maintain a close interest in the FCO's consular work. We further recommend that, as it develops its new consular strategy for 2010-13, the FCO should provide updated information in its response to this Report and subsequently to our successor Committee.

Migration services and UK Border Agency (UKBA)

314. "Supporting managed migration" is the fourth of the FCO's Departmental Strategic Objectives for 2008-11. The FCO is also a delivery partner for PSA 3, on migration, on which the Home Office is the lead Department. Although the numbers of respondents involved were small, the view that the FCO operates poor immigration controls was one of the main factors behind unfavourable opinions of the Department reported in the 2008 "Stakeholder Survey".

315. The year 2008-09 was the first in which the agency responsible for UK visas fell wholly under the Home Office. As of 1 April 2008, the former UKvisas, which had been a joint Home Office-FCO agency, was merged into the new UK Border Agency (UKBA), which is an agency of the Home Office alone. UKBA continues to use FCO Posts overseas, with the FCO charging it accordingly under a set of Service Level Agreements; and it was agreed under a January 2008 Memorandum of Understanding (MoU) between the two Departments that FCO staff would continue to fill at least 40% of jobs in UKBA's International Group. The FCO has provided the head of UKBA International Group from the outset, and around 250 FCO staff moved out of the main FCO building into UKBA offices over summer 2009. The FCO's Migration Directorate is the Department's main channel for co-operation with UKBA and the body responsible for delivery of the FCO's DSO 4; the Migration Directorate itself includes staff from UKBA and DFID, as well as the FCO.

316. The 2008 FCO-Home Office MoU recognised that the FCO had a continuing policy interest in migration issues. We have similarly asserted our right to continue to scrutinise the FCO's work in relation to UKBA.[567]

317. The FCO has emphasised the degree to which there is co-operation between itself and UKBA on inward migration.[568] For example, it told us that its "geographical directorates and the overseas network of Posts are consulted on major policy/operational developments within [UKBA] which may have an impact overseas".[569] James Bevan, the FCO's Director General Change and Delivery, described the relationship to us as a "very effective partnership". He nevertheless acknowledged that "there are [...] sometimes different perspectives".[570] We have encountered several instances in which the UK's visa policies and practices have become significant irritants in bilateral relations, such as problems with the visa operation in Pakistan, or the need to travel to another country in order to provide biometric data in the Western Balkans. In his evidence to the Public Accounts Committee in October 2009, Sir Peter Ricketts acknowledged that the "hubbing and spoking" of the UK's visa operations was causing some disruption and said that the process was "really an effort by UKBA to drive down the cost of the operation", especially because income from visa fees had fallen as a result of the recession.[571]

318. We conclude that the FCO should convey a clear message to the Home Office and the UK Border Agency that immigration policies and practices have significant implications for the UK's foreign relations, as well as for domestic security, economic and community policies.

319. In recent years, discussion of the FCO's co-operation with other government departments has tended to focus on its links with the MOD and DFID, owing to the overwhelming importance of the conflicts in Iraq and Afghanistan. The Cabinet Office's Capability Review of the FCO in early 2009 found that the FCO's relationships with these two Departments had "improved noticeably".[572] We note that in two of the other most high-profile areas in which the FCO is engaged, namely visas and overseas passport issuance, the Home Office now has the lead responsibility; and that a third such area, the Forced Marriages Unit, is also a joint FCO-Home Office operation. The FCO also told us that in the next spending round it and the Home Office would bid jointly for a pooled programme budget for capacity building against organised crime.[573] In paragraphs 47-48 we discussed possible co-operation between the Home Office and the FCO in relation to overseas civilian post-conflict missions.

320. The FCO's 2009 Survey of Whitehall Partners indicated that organisations which focused on domestic issues were less satisfied with the FCO than those focusing on international issues; and that partners working on issues of crime and security, in particular, felt marginalised by the FCO. In its response to the Cabinet Office's 2009 Capability Review, the FCO mentioned economic departments, such as the Treasury and the then Department for Business, Enterprise and Regulatory Reform, as those with which the Permanent Under-Secretary would be aiming to achieve levels of co-operation similar to those seen with DFID and the MOD.[574]

321. We recommend that our successor Committee in the next Parliament should pay particular attention to the growing importance of the FCO's relationship with the Home Office, in areas of key importance to the UK public and the FCO's reputation and policy objectives.

Overseas Territories

322. In contrast to the FCO's previous set of Strategic Priorities, its post-2007 Strategic Framework does not refer to the UK's 14 Overseas Territories (OTs), for which the FCO exercises the UK's continuing responsibility. In our discussion of the new framework in our last Report, we welcomed the assurance that the FCO had given us, that the omission of the OTs from the Framework "in no way diminish[ed] the importance" attached to them by the Department, which regarded them as a "core responsibility" and remained "committed to fulfilling [its] obligations" towards them.[575] We also reiterated the conclusion which we had reached in our major Report on the Overseas Territories in 2008, namely that the Government "must take its oversight responsibility for the Overseas Territories more seriously".[576] We had expressed concerns that Governors were sometimes not being appointed at a sufficiently senior level, or with sufficient OTs experience or training or support from the FCO; and that staff dealing with the OTs in London might also not be of sufficient seniority.[577]

323. Since publication of our Overseas Territories Report, there has been a series of developments which suggest to us that there continue to be deficiencies in the FCO's oversight of OTs matters:

In December 2008, acting under the Habitats Directive, the European Commission included as a Site of Community Interest an area proposed by Spain which covers a share of British Gibraltar Territorial Waters. The Government of Gibraltar is taking a legal case against the Commission seeking annulment of the listing. The UK Government has secured the right to intervene in support of the Government of Gibraltar's case, but missed the deadline to take a case itself. The UK Government is considering launching a case against a subsequent Commission Decision which re-listed the disputed Spanish site; the deadline for lodging such a challenge would be 5 March 2010.[578]
In June 2009, the Government of Bermuda negotiated with the US the transfer to Bermuda of four Uighur detainees from Guantanamo Bay. In doing so, it acted outside its competence and without the knowledge of the FCO.[579]
The Ascension Island Government faces possible insolvency as a result of a dispute with the Ministry of Defence over the payment of property tax which, as of early February 2010, the FCO had been unable to resolve.[580]

324. The most notable development since publication of our 2008 Overseas Territories Report was the suspension of the Constitution and re-imposition of direct rule in the Turks and Caicos Islands (TCI) in August 2009, owing to a "high probability of systemic corruption".[581] The move was in line with the recommendation of a Commission of Inquiry, the establishment of which had been the central recommendation of our 2008 Report with respect to the Islands.[582] The final findings of the Commission of Inquiry were essentially unchanged from those contained in its Interim Report of March 2009, and we note that, since the end of that month, and as of February 2010, the FCO has included the Overseas Territories as a strategic risk on its Top Risks Register.[583] The FCO has sent a team of staff to support the Governor while he rules TCI directly and seeks to implement institutional and other reforms aimed at preventing a recurrence of the problems.[584] However, Islanders have expressed to us a number of concerns about the way in which the Governor and his staff—and behind them, the FCO—are managing direct rule. We were especially dismayed to hear from Special Prosecutor Helen Garlick in January 2010—not from the FCO—that she had been unable to start meaningful work, owing to a lack of assured funding from the FCO. Given the delay, there are fears that those suspected of corruption in TCI might in the meantime be concealing or destroying evidence, and that the Special Prosecutor might be unable to make significant progress with her work before the planned restoration of devolved government in July 2011. We were sufficiently alarmed to decide to produce a short Report to register our concerns before the dissolution of this Parliament. Our Report will be published shortly.

325. In addition to the ongoing submissions which we are receiving from TCI, since publication of our 2008 Report we have continued to receive a large amount of correspondence in connection with the OTs. Many of those who contact us have serious concerns about standards of governance and other issues in other Overseas Territories. From time to time we have transmitted particular concerns from the OTs to the FCO. Our experience suggests that in so doing we have been fulfilling a role for which there is a genuine demand. In our 2008 Report, we expressed the hope that our successor Committee would wish to take seriously its obligation to scrutinise the FCO's work in relation to the OTs.[585]

326. We conclude that, although the Overseas Territories do not have large populations or take up a large proportion of the FCO budget, they present particular challenges and responsibilities to the FCO concerning their governance. Notwithstanding the Overseas Territories' inclusion on the FCO's Top Risks Register in 2009, we remain unconvinced that the Department is exercising its responsibilities for them with sufficient diligence. We recommend that, in light of the problems which have arisen in connection with a number of the Territories, in its response to this Report the FCO should set out any plans it has to review or strengthen its handling of Overseas Territories matters.

327. We recommend that our successor Committee in the next Parliament should consider making the close scrutiny of the FCO's handling of its responsibilities for the Overseas Territories an ongoing part of its work.

The FCO's policy role

328. The intensified financial pressure facing the FCO has helped to prompt renewed discussion of the Department's overall purpose and function. This ongoing debate has been reflected in our inquiries periodically during the 2005-10 Parliament, for example when we took evidence from Lord Ashdown and former Ambassador Sir Ivor Roberts as part of our inquiry into the FCO's Annual Report two years ago.[586] The development of the FCO's new Strategic Framework under the present Foreign Secretary after 2007 was itself a response to a perceived need to rethink the Department's role.[587] In its March 2009 Capability Review of the Department, the Cabinet Office said that the FCO "needs to continue to think radically about its place in a changing world".[588]

329. The FCO's traditional role has been seen as that of being the Government's pre-eminent foreign policy-making body, with privileged access to information and contacts abroad. That role is now argued by some to be under challenge from three developments:[589]

i. The spread of new forms of global communication, which allow other parts of Government to acquire information about overseas developments and do business with foreign partners without having to rely on the FCO, thereby arguably undermining the traditional role of Ambassadors and overseas Posts as sources of information and channels of communication. The ease of international travel is also seen as contributing to the trend, facilitating the increase in international meetings between non-FCO personnel, and especially international summitry.

ii. Partly as a consequence of (i) above, the increasing tendency for other parts of Government to establish their own direct relationships with other states and to pursue work with or in them, arguably undermining the FCO's monopoly of foreign policy-making. It is frequently argued that the Prime Minister in particular has taken over important elements of foreign policy, leaving the FCO marginalised. This argument may receive a further boost from some of the evidence presented to the Chilcott Inquiry into the war in Iraq.[590] Other institutions which are claimed to have siphoned some degree of responsibility for the formation of foreign policy from the FCO include DFID, the intelligence and security agencies and the Department of Energy and Climate Change (DECC).[591]

iii. Developments inside the FCO, which are often seen to involve an ever-greater stress on the provision of services to the public and the introduction, largely at the behest of the Treasury, of management practices—such as the system of performance targets and reporting considered above—which divert time and resources from traditional political reporting, analysis and policy-making.

330. Some dispute whether these trends are all as new as might be thought. For example, Sir Peter Ricketts argued that "the Prime Minister has had a leading role in foreign policy for generations".[592] The perception that the foreign ministry is losing its traditional role is also far from unique to the UK: in a chapter entitled "The Foreign Ministry: Relic or Renaissance?" in his 2009 book Guerrilla Diplomacy, the Canadian diplomat and author Daryl Copeland describes foreign ministries as facing a "cascade of adversity".[593] Particular questions are seen as being raised about the role of foreign ministries within the EU, given the range and intensity of contacts among its Member States, and the plans which we discussed in paragraphs 92-97 for the development of the European External Action Service with respect to third countries.[594] One way in which the UK's structuring of its foreign relations activities differs from that of most comparable states is in the role played by DFID: among the 30 Member States of the Organisation for Economic Co-operation and Development, only one other—Germany—has a separate fully-fledged ministry for international development, with all the others maintaining agencies or departments that in one way or another fall under the overall authority of the foreign ministry.[595]

331. Since we published our last Report, several distinguished former ministers and diplomats have expressed anxiety about the direction in which the FCO is heading. In February 2009 former Foreign Secretary Lord Hurd told the House of Lords of:

a malaise becoming increasingly apparent in [the FCO's] working. [...] the Foreign Office in London [...] is ceasing to be a storehouse of knowledge providing valued advice to Ministers and is increasingly an office of management, management of a steadily shrinking overseas service. [...] [It] may be reverting, despite the talent deployed there, to an age of super-clerks, rather than policy advisors who have time to think and to bring weight to bear through their advice to Ministers. [...] the Foreign Office in London has been hollowed out.[596]

Sir Peter Marshall, former British Ambassador to the UN in Geneva, questioned in a submission to us in September 2009 whether the FCO's post-2007 Strategic Framework:

implie[d] a relatively greater emphasis on the executive function of the Diplomatic Service, as compared with its advisory function [...] and whether there is in consequence a possible loss of FCO Departmental clout.[597]

In November 2009, Sir Christopher Meyer, former British Ambassador to Washington, wrote that the FCO "has, according to numerous witnesses, fallen again on hard times, surrendering swathes of responsibility for foreign policy to other players in the Whitehall community", which he said was marked by "the activism abroad of the Prime Minister's office and the autonomy and funding given to the Department for International Development, which, with a budget at least three times that of the Foreign Office, pursues its own agenda abroad". Sir Christopher reported the fears of one diplomat that the FCO "will just end up a Ministry for Consular Affairs, rescuing distressed travellers and tourists".[598]

332. In January 2010, Lord Malloch-Brown, FCO Minister of State until July 2009, wrote that:

the real crisis for the Foreign Office is whether it will be allowed to lead in its embassies and Whitehall, or will it be reduced to landlord and events organiser for other parts of Government. Abroad, diplomats are usually outnumbered by trade, immigration and development officials with their own priorities. In Whitehall, impatient Prime Ministers often elbow the Foreign Office aside to run foreign policy. Whether from sofa or bunker, Prime Ministers have over-ruled the Foreign Office to play to the news cycle.[599]

333. Sir Peter Ricketts rejected Lord Hurd's view of the FCO when we put it to him. Sir Peter told us that he saw "every day the FCO at the heart of policy-making on a whole range of difficult, important, fast-moving and complex issues, and leading Whitehall work on it". Sir Peter suggested that the advent of enhanced international communications meant that "the Ambassador's capacity to be part of policy-making is greater than it was", as he or she participated via secure video link in policy discussions in London. "The reality", said Sir Peter, "is that the FCO in London, working with our Ambassadors, is still a real storehouse of knowledge and experience of abroad".[600]

334. As regards DFID's role in relation to the FCO, the Foreign Secretary told us that "DFID does not run an alternative foreign policy". He drew our attention to the way in which DFID, for example in its 2009 White Paper, was increasingly linking its core task of poverty reduction to traditional FCO areas of work such as conflict prevention, good governance and trade.[601] The Foreign Secretary also said that "by definition, DFID is not in every country in the world" and that "therefore, by definition, it is not universal" in the way that the FCO is, via its global network of Posts.[602]

335. In 2008-09, the FCO re-established its Strategy Unit, on the basis of its existing Policy Planning Staff, and brought the Unit together with the FCO Research Analysts in a single Directorate for Strategy, Policy Planning and Analysis. Sir Peter Ricketts told us that the change was part of the effort to make sure that the FCO had "enough intellectual capacity at the centre of the organisation to be sure that [it is] covering all the major issues".[603] The Cabinet Office's Capability Review of the FCO in March 2009 stated that "the re-establishment of the Strategy Unit [...] shows a clear intention to foster and value the strategic use of evidence throughout the Department", and that the re-creation of the Unit "should improve the FCO's long-term capability".[604] In his evidence in December 2009, Sir Peter said that it was too early to assess the impact of the change.

336. Daryl Copeland has written that "the clear trend has been to make the foreign ministry more like any other government department. But in almost every respect, foreign ministries are not like other government departments".[605]

337. We conclude that, with regard to funding arrangements and performance management, the Treasury has too often treated the FCO as "just another Department", when it is clear from international experience that foreign ministries are not like other departments. We further conclude that it is incongruous that the position of the only government department with a global reach is threatened with erosion at a time when globalisation is acknowledged as the key phenomenon of our times. We conclude that there continues to be a vital need for the FCO to have sufficient resources to enable it to carry out its traditional functions, of the interpretation of developments overseas and the formulation of policy.

338. We recommend that the new Government should carry out a comprehensive foreign policy-led review of the structures, functions and priorities of the FCO, MOD and DFID.

529 HC Deb, 23 January 2008, col 52-3WS; FCO, Departmental Report 1 April 2007-31 March 2008, Cm 7398, pp 15-16, 84-85; FCO, Departmental Report and Resource Accounts 1 April 2008-31 March 2009, Volume 2, HC 460-II, pp 43-45 Back

530 For example, Ev 46 Back

531 Foreign Affairs Committee, Second Report of Session 2008-09, Foreign and Commonwealth Office Annual Report 2007-08, HC 195, paras 9-40 Back

532 Foreign Affairs Committee, Foreign and Commonwealth Office Annual Report 2007-08, paras 11 Back

533 Foreign Affairs Committee, Foreign and Commonwealth Office Annual Report 2007-08, para 56 Back

534 Ev 25 Back

535 Foreign Affairs Committee, Second Report of Session 2008-09, Foreign and Commonwealth Office Annual Report 2007-08, HC 195, para 43; Ev 69-70 Back

536 For a summary of the Committee's recent work, see Foreign Affairs Committee, First Report of Session 2009-10, The Work of the Committee in 2008-09, HC 87. Back

537 Foreign Affairs Committee, First Report of Session 2007-08, Foreign and Commonwealth Office Annual Report 2006-07, HC 50, paras 64-69; Foreign Affairs Committee, Second Report of Session 2008-09, Foreign and Commonwealth Office Annual Report 2007-08, HC 195, paras 45-48 Back

538 NAO, Measuring Up: How good are the Government's data systems for monitoring performance against Public Service Agreements?, HC (2008-09) 465, 21 October 2009, p 14 Back

539 NAO, Measuring Up: How good are the Government's data systems for monitoring performance against Public Service Agreements? PSA 30: 'Reduce the impact of conflict through enhanced UK and international efforts': A review of the data systems underpinning the Public Service Agreement led by the Foreign and Commonwealth Office under the Comprehensive Spending Review 2007, June 2009, at http://www.nao.org.uk/publications/0809/measuring_up_psa_validation1/findings_by_psa.aspx Back

540 Ev 70; FCO, Departmental Report and Resource Accounts 1 April 2008-31 March 2009, Volume 2, HC 460-II, pp 46-47 Back